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LOAN AND SECURITY AGREEMENT
Dated as of December 30, 1998
among
US LEC CORP.,
as Guarantor and Borrower Representative,
CERTAIN OPERATING SUBSIDIARIES OF US LEC CORP.,
as Borrowers,
THE LENDERS PARTY HERETO,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender,
and
FIRST UNION NATIONAL BANK,
as Syndication Agent and Lender
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................1
1.1 Certain Definitions................................................1
1.2 Accounting Principles; Subsidiaries...............................18
1.3 UCC Terms.........................................................19
1.4 General Construction; Captions....................................19
1.5 References to Documents and Laws..................................19
ARTICLE II LOANS...........................................................20
2.1 Facility A........................................................20
2.2 Facility B........................................................20
2.3 Notes.............................................................20
2.4 Letters of Credit.................................................21
2.5 Reliance on Notices; Appointment of Borrower Representative.......21
2.6 Procedures for Borrowing..........................................21
2.7 Facility B Loan Amortization......................................22
2.8 Reduction of Facility A Commitment................................22
2.9 Maturity..........................................................22
2.10 Prepayments; Commitment Reductions...............................22
2.11 Interest and Applicable Margins..................................24
2.12 Payments.........................................................26
2.13 Application and Allocation of Payments...........................27
2.14 Loan Account and Accounting......................................27
2.15 Indemnity........................................................28
2.16 Access...........................................................29
2.17 Taxes............................................................30
2.18 Capital Adequacy; Increased Costs; Illegality....................30
2.19 Use of Proceeds..................................................32
2.20 Fees.............................................................32
2.21 Expenses.........................................................33
ARTICLE III ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF
ADMINISTRATIVE AGENT........................................................33
3.1 Assignment and Participations.....................................33
3.2 Appointment of Administrative Agent...............................35
3.3 Administrative Agent's Reliance, Etc..............................36
3.4 GECC and Affiliates...............................................37
3.5 Lender Credit Decision............................................37
3.6 Indemnification...................................................37
3.7 Successor Administrative Agent....................................38
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3.8 Set Off and Sharing of Payments...................................39
3.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert...........................................................39
3.10 Syndication Agent................................................41
ARTICLE IV COLLATERAL AND SECURITY AGREEMENT...............................42
4.1 Grant of Security Interest........................................42
4.2 Regulatory Authorizations.........................................43
4.3 Priority of Security Interests....................................43
4.4 Pledge Agreements.................................................44
4.5 Further Documentation; Pledge of Instruments......................44
4.6 Accounts, Etc.....................................................45
4.7 Further Identification of Collateral..............................45
4.8 Remedies..........................................................45
4.9 Standard of Care..................................................45
4.10 Advances to Protect Collateral...................................45
4.11 License to Use...................................................46
4.12 Benefit of Lenders...............................................46
4.13 Release of Collateral............................................46
ARTICLE V REPRESENTATIONS AND WARRANTIES...................................46
5.1 Organization and Qualification....................................46
5.2 Authority and Authorization.......................................47
5.3 Execution and Binding Effect......................................47
5.4 Governmental Authorizations.......................................47
5.5 Regulatory Authorizations.........................................47
5.6 Agreements and Other Documents....................................48
5.7 Absence of Conflicts..............................................48
5.8 No Restrictions...................................................48
5.9 Government Contracts..............................................48
5.10 Financial Statements; Business Plan..............................49
5.11 Financial Accounting Practices...................................49
5.12 Deposit and Disbursement Accounts................................49
5.13 Insurance........................................................49
5.14 Accurate and Complete Disclosure.................................50
5.15 No Event of Default; Compliance with Material Agreements.........50
5.16 Labor Matters....................................................50
5.17 Litigation.......................................................50
5.18 Rights to Property...............................................51
5.19 Year 2000 Problem................................................51
5.20 Taxes............................................................51
5.21 No Material Adverse Change.......................................51
5.22 Solvency.........................................................52
5.23 No Regulatory Event..............................................52
5.24 Trade Relations..................................................52
5.25 No Brokerage Fees................................................52
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5.26 Margin Stock; Regulation U.......................................52
5.27 Investment Company; Public Utility Holding Company...............52
5.28 Personal Holding Company; Subchapter S...........................53
5.29 Securities Act, Etc..............................................53
5.30 ERISA............................................................53
5.31 Intellectual Property............................................53
5.32 Environmental Warranties.........................................53
5.33 Security Interests...............................................53
5.34 Place of Business................................................54
5.35 Location of Collateral...........................................54
5.36 Validity of Contracts and Accounts...............................54
5.37 No Defaults Under Contracts or Accounts..........................54
5.38 Subsidiaries.....................................................55
5.39 Assumed Names....................................................55
5.40 Pledge Agreements; Registration of Pledge........................55
5.41 Transactions with Affiliates.....................................55
ARTICLE VI CONDITIONS TO FIRST BORROWING DATE..............................55
6.1 Closing Certificates..............................................56
6.2 Opinions of Counsel...............................................56
6.3 Closing Documents.................................................56
6.4 No Material Adverse Change........................................58
ARTICLE VII CONDITIONS OF LENDING..........................................58
7.1 Conditions to Each Borrowing Date.................................58
7.2 Affirmation of Representations and Warranties.....................59
7.3 Deadline for Funding Conditions...................................59
ARTICLE VIII AFFIRMATIVE COVENANTS.........................................59
8.2 Other Notices.....................................................61
8.3 Notice of Pension-Related Events..................................62
8.4 Inspection Rights.................................................62
8.5 Preservation of Corporate Existence and Qualification.............62
8.6 Continuation of Business..........................................62
8.7 Insurance.........................................................63
8.8 Payment of Taxes, Charges, Claims and Current Liabilities.........64
8.9 Financial Accounting Practices....................................65
8.10 Compliance with Laws.............................................65
8.11 Use of Proceeds..................................................66
8.12 Government Authorizations; Regulatory Authorizations, Etc........66
8.13 Contracts and Franchises.........................................66
8.14 Site Leases and Consents.........................................66
8.15 Financial Covenants..............................................66
8.16 Patent, Trademark and Copyright Collateral.......................66
8.17 Sites............................................................67
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8.18 Certain Notices..................................................68
8.19 Management Team..................................................68
8.20 Enforcement of Contracts.........................................68
8.21 Legal Fee Reserve................................................68
8.22 Subordinated Loans...............................................68
8.23 Future Subsidiaries..............................................68
8.24 Liens on After-Acquired Property.................................69
8.25 Year 2000 Compliance.............................................69
8.26 Post-Closing Items...............................................69
8.27 Further Assurances...............................................70
ARTICLE IX NEGATIVE COVENANTS..............................................70
9.1 Indebtedness......................................................70
9.2 Restrictions on Liens and Sale of Collateral......................70
9.3 Limitation on Contingent Obligations..............................71
9.4 Prohibition of Mergers, Acquisitions, Name, Office or Business
Changes, Etc......................................................71
9.5 Limitation on Equity Payments.....................................72
9.6 Prohibition on Sale or Issuance of Stock..........................72
9.7 Limitation on Investments, Advances and Loans.....................72
9.8 Capital Expenditures..............................................72
9.9 Limitation on Leases..............................................73
9.10 Transactions with Affiliates.....................................73
9.11 Extension of Accounts............................................73
9.12 Assumed Names....................................................73
9.13 Subsidiaries.....................................................74
ARTICLE X EVENTS OF DEFAULT AND REMEDIES...................................74
10.1 Events of Default................................................74
10.2 Remedies.........................................................77
10.3 Waivers by Loan Parties..........................................78
10.4 Exercise of Rights...............................................78
10.5 Rights of Secured Party..........................................78
10.6 Additional Remedies..............................................79
10.7 Application of Proceeds..........................................80
10.8 Discontinuance of Proceedings....................................80
10.9 Power of Attorney................................................81
ARTICLE XI JOINT AND SEVERAL OBLIGATIONS; GUARANTY.........................83
11.1 Guaranty.........................................................83
11.2 Waivers by Loan Parties..........................................84
11.3 Benefit of Guaranty..............................................84
11.4 Subordination of Subrogation, Etc................................84
11.5 Election of Remedies.............................................85
11.6 Limitation.......................................................85
11.8 Liability Cumulative.............................................86
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ARTICLE XII GENERAL CONDITIONS/MISCELLANEOUS...............................87
12.1 Amendments, Modifications and Waivers............................87
12.2 Advances Not Implied Waivers.....................................87
12.3 Business Day.....................................................88
12.4 Records..........................................................88
12.5 Notices..........................................................88
12.6 FCC and PUC Approval.............................................89
12.7 Lenders Sole Beneficiary.........................................89
12.8 Lender's Review of Information...................................89
12.9 No Joint Venture.................................................90
12.10 Severability....................................................90
12.11 Rights Cumulative...............................................90
12.12 Duration; Survival..............................................90
12.13 Governing Law...................................................90
12.14 Counterparts....................................................90
12.15 Successors and Assigns..........................................91
12.17 Jurisdiction and Venue..........................................93
12.18 Jury Waiver.....................................................93
12.19 Limitation on Liability.........................................93
12.20 Schedules, Exhibits and Annexes.................................94
12.21 Agreement to Govern.............................................94
12.22 Entire Agreement................................................94
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ANNEXES TO LOAN AND SECURITY AGREEMENT
Annex I Letters of Credit
Annex II Initial Commitments; Addresses of Lenders
Annex III Closing Checklist
SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule 1 Borrower Information and Certain Defined Terms
Schedule 2.7 Facility B Loan Amortization Schedule
Schedule 2.8 Scheduled Reductions of Facility A Commitment
Schedule 2.11 Applicable Margins
Schedule 2.20 Commitment Fees
Schedule 3.9 Wire Instructions
Schedule 5.4 Required Consents
Schedule 5.5 Regulatory Authorizations
Schedule 5.6 Agreements and Other Documents
Schedule 5.8 Restrictions on Indebtedness
Schedule 5.9 Government Contracts
Schedule 5.10 Financial Statements
Schedule 5.12 Deposit and Disbursement Accounts
Schedule 5.13 Existing Insurance
Schedule 5.16 Labor Matters
Schedule 5.17 Litigation
Schedule 5.18 Site and Site Leases; Real Property; Equipment Location
Schedule 5.31 Intellectual Property
Schedule 5.33 Security Interests-Recordings and Filings
Schedule 5.34 Place of Business
Schedule 5.35 Location of Collateral
Schedule 5.39 Assumed Names
Schedule 5.41 Transactions with Affiliates
Schedule 7.1 Post-Closing Items
Schedule 8.7 Required Insurance
Schedule 8.15 Financial Covenants
Schedule 9.1 Permitted Debt
Schedule 9.2 Liens
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A-1 Form of Facility A Note
Exhibit A-2 Form of Facility B Note
Exhibit B Form of Borrowing Certificate
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Opinion of Counsel to Loan Parties
Exhibit E Form of Opinion of Regulatory Counsel to Loan Parties
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Exhibit F Form of Holdings Pledge Agreement
Exhibit G Form of Landlord Consent
Exhibit H Form of Assignment Agreement
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of December 30,
1998, by and among the entity or entities described on Schedule 1 (individually
a "Borrower" and collectively, "Borrowers"); US LEC CORP., a Delaware
corporation ("Holdings"), as Guarantor and Borrower Representative; GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GECC"), as Lender and as administrative agent for Lenders (in that
latter capacity, "Administrative Agent"); FIRST UNION NATIONAL BANK as Lender
and as syndication agent (in that latter capacity, "Syndication Agent"); and the
other Lenders party hereto from time to time.
B A C K G R O U N D:
1. Borrowers are engaged or propose to engage in the telecommunications
business as described on Schedule 1 and have requested Lenders to extend credit
to Borrowers in connection therewith to implement the Business Plan.
2. Lenders are willing to extend such credit to Borrowers upon the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS.
Certain terms are defined on Schedule 1. In addition to other words and
terms defined in the preamble hereof or elsewhere in this Agreement, or on the
Schedules, the following words and terms shall have the following meanings
unless the context otherwise clearly requires:
"Accounts": as defined in Section 4.1(a).
"Adjusted Total Debt": for Loan Parties taken as a whole, Total Debt minus
consolidated Cash balances.
"Advance": any Facility A Advance or Facility B Advance, as the context
may require.
"Affected Lender": as defined in Section 2.18(d).
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"Affiliate": with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, five percent (5%) or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of individuals, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude, in the case of any Loan Party, Administrative Agent and each Lender.
"Applicable Base Margin": the per annum interest rate margin from time to
time in effect and payable in addition to the Base Rate applicable to the Base
Rate Loans, as determined by reference to Schedule 2.11.
"Applicable L/C Margin": the per annum fee, from time to time in effect,
payable with respect to outstanding Letter of Credit Obligations as determined
by reference to Schedule 2.11.
"Applicable LIBOR Margin": the per annum interest rate from time to time
in effect and payable in addition to the LIBOR Rate applicable to LIBOR Loans,
as determined by reference to Schedule 2.11.
"Applicable Margins": the Applicable L/C Margin, the Applicable Base
Margin, and the Applicable LIBOR Margin, collectively.
"Asset Disposition": means any sale or other disposition, or series of
sales or other dispositions (including by merger or consolidation, and whether
by operation of law or otherwise), made on or after the date hereof by any Loan
Party or any of its Subsidiaries to any Person of (i) all or substantially all
of the outstanding Stock of any of its Subsidiaries, (ii) all or substantially
all of its assets or the assets of any division of any Borrower or any of its
Subsidiaries or (iii) any other asset or assets which, when taken together with
all sales or other dispositions of assets not covered by the foregoing clauses
(i) and (ii), yield proceeds or involve assets having a fair market value in
excess of $100,000 in any twelve-month period.
"Assignment Agreement": as defined in Section 3.1(a).
"Base Rate": for any day, a floating rate equal to the higher of (i) the
rate publicly quoted from time to time by The Wall Street Journal as the "base
rate on corporate loans at large U.S. money center commercial banks" (or, if The
Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Board of Governors of the
Federal Reserve System in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus fifty (50) basis points per
annum. Each change in any interest rate provided for in this Agreement based
upon the Base Rate shall take effect at the time of such change in the Base
Rate.
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"Base Rate Loan": a Loan or portion thereof bearing interest by reference
to the Base Rate.
"Borrower Representative": US LEC Corp. in its capacity as representative
and agent of Borrowers.
"Borrowers": as defined in Schedule 1 and any other subsidiary of Holdings
that becomes a Borrower as herein provided.
"Borrowing Certificate": a certificate substantially in the form of
Exhibit B.
"Borrowing Date": any Business Day on which an Advance is made or a Letter
of Credit Obligation is incurred.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York or Charlotte, North Carolina are
authorized or required by law to close.
"Business Plan": Loan Parties' business plan, including pro forma
projections, as described in, and attached to, Schedule 5.10, as updated upon
the request of Administrative Agent at the direction of Requisite Lenders or as
required herein; provided, however, that each such update shall be acceptable to
Requisite Lenders, which acceptance shall not be unreasonably withheld.
"Capital Expenditures": for any period, (a) the additions to property,
plant and equipment and other capital expenditures (including all systems and
development expenditures related to the build-out of the Networks) of Loan
Parties that are (or would be) set forth in a consolidated statement of cash
flows of Loan Parties for such period prepared in accordance with GAAP;
provided, however, that no consideration paid for or expenditure related to the
acquisition of any license and no capitalized interest shall be treated as a
Capital Expenditure nor shall expenditures of proceeds of insurance settlements,
condemnation awards and other like settlements in respect of lost, destroyed,
damaged or condemned property, plant or equipment, to the extent that such
expenditures are made to repair or replace such property or to acquire other
property, plant and equipment useful in the business within twelve (12) months
of receipt of such proceeds, be deemed Capital Expenditures and (b) Capital
Lease Obligations incurred by Loan Parties during such period.
"Capital Lease": with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.
"Capital Lease Obligation": with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
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"Cash": at any time, the cash, cash equivalents or marketable investment
grade securities held by any Loan Party free of any claims or encumbrances other
than those created by the Loan Documents.
"Cash Flow": during any fiscal period of Loan Parties, the sum of (i) net
income (or loss) (which may be a positive or negative number) for such period,
plus (ii) all non-cash items deducted in determining such net income (or loss),
minus (iii) all non-cash items added in determining such net income (or loss)
during such period.
"Cash Interest Coverage Ratio": EBITDA for any period of four (4)
consecutive Fiscal Quarters divided by Interest Expense (excluding any portion
thereof not paid in cash) for such period.
"Change of Board": an occurrence whereupon, at any time, fewer than
one-half of the directors comprising the board of directors of Holdings shall
include members of a group consisting of any of the current chief executive
officer, the president, any current or future Class B directors, any existing
Board members and replacement or additional directors nominated or supported by
one-half or more of the members of the foregoing group.
"Change of Control": an occurrence whereupon both of the following exist:
(i) the failure of the Permitted Holders, in the aggregate, to own or control,
directly or indirectly, stock of Holdings representing either 25% or more of the
voting capital stock of Holdings or more than any other Person or group, within
the meaning of Regulation 13D under the Securities Exchange Act of 1934 and (ii)
a Change of Board shall occur.
"Charges": all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
income or gross receipts of any Loan Party, (d) any Loan Party's ownership or
use of any properties or other assets, or (e) any other aspect of any Loan
Party's business.
"Closing Checklist": the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex III.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in Section 4.1.
"Commitment Fees": as defined in Section 2.20(a).
"Commitments": the Facility A Commitment and the Facility B Commitment,
collectively. The initial Commitments of Lenders are set forth on Annex II.
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"Commitment Termination Date": the Facility A Commitment Termination Date
or the Facility B Commitment Termination Date, as the context may require.
"Communications Law": any and all of (i) the Telecommunications Act of
1996, the Communications Act of 1934, any similar or successor federal statute
to either and the rules and regulations of the FCC thereunder; and (ii) any
state law governing the provision of telecommunications services and the rules
and regulations of the PUC, all as the same may be in effect from time to time.
"Contingent Obligation": as to any Person, any obligation of such Person
guaranteeing, directly or indirectly, any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof.
"Contracts": as defined in Section 4.1(b).
"Current Assets": with respect to any Person, all current assets of such
Person as of any date of determination calculated in accordance with GAAP, but
excluding Indebtedness due from Affiliates.
"Current Liabilities": with respect to any Person, all liabilities which
should, in accordance with GAAP, be classified as current liabilities, and in
any event shall include all Indebtedness payable on demand or within one year
from any date of determination without any option on the part of the obligor to
extend or renew beyond such year, all accruals for federal or other taxes based
on or measured by income and payable within such year, and the current portion
of long-term debt required to be paid within one year, but excluding, in the
case of Borrowers, the aggregate outstanding principal balances of the Loans.
"Default": any of the conditions or occurrences specified in Section 10.1,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition has been satisfied.
"Default Rate": as defined in Section 2.11(d).
"EBITDA": for any period, the sum of consolidated net income (excluding
extraordinary gains and losses and any income and related expenses derived from
sources which are disputing amounts payable to any Loan Party with respect to
reciprocal compensation related to internet
5
service providers and related facility charges), depreciation, amortization,
Interest Expense and tax expense for Loan Parties.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.
"Environmental Laws": all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and in each case as amended or supplemented from time to
time, and any applicable judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent decree, order
or judgment, imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural
resources (including ambient air, surface water, groundwater, wetlands, land
surface or subsurface strata, wildlife, aquatic species and vegetation).
Environmental Laws include the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. ▇▇.▇▇. 9601 et seq.)
("CERCLA"); the Hazardous Materials Transportation Authorization Act of 1994 (49
U.S.C. ▇▇.▇▇. 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. ▇▇.▇▇. 136 et seq.); the Solid Waste Disposal Act (42 U.S.C.
▇▇.▇▇. 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. ▇▇.▇▇. 2601 et
seq.); the Clean Air Act (42 U.S.C. ▇▇.▇▇. 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. ▇▇.▇▇. 1251 et seq.); the Occupational Safety
and Health Act (29 U.S.C. ▇▇.▇▇. 651 et seq.); and the Safe Drinking Water Act
(42 U.S.C. ▇▇.▇▇. 300(f) et seq.); each as from time to time amended, and any
and all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities": with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits": all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment": as defined in Section 4.1(c).
"Equity Payment": any distribution of earnings or capital, or any
redemption or other payment in respect of stock, membership interests,
partnership interests or other equity interests, including options and warrants,
either directly or indirectly, whether in cash or property or in obligations of
any Loan Party.
6
"Event of Default": any of the events specified in Section 10.1; provided,
however, that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, under Section 10.1 or otherwise, has been
satisfied.
"Excess Cash Flow": without duplication, with respect to any Fiscal Year
of Loan Parties, consolidated net income plus (a) depreciation, amortization and
Interest Expense to the extent deducted in determining consolidated net income,
plus decreases or minus increases (as the case may be) (b) in Working Capital,
minus (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense) and scheduled principal payments paid
or payable in respect of Indebtedness permitted hereunder to be incurred, plus
or minus (as the case may be), (d) extraordinary gains or losses which are cash
items not included in the calculation of net income, minus (e) Capital
Expenditures for such Fiscal Year permitted hereunder, plus (f) taxes deducted
in determining consolidated net income to the extent not paid for in cash. For
purposes of this definition, "Working Capital" means Current Assets (exclusive
of Cash) less Current Liabilities.
"Facility A Advance": any advance made pursuant to Section 2.1.
"Facility A Commitment": (a) as to any Lender, the aggregate commitment of
such Lender to make its Pro Rata Share of Facility A Advances and/or incur
Letter of Credit Obligations hereunder or in the most recent Assignment
Agreement executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Facility A Advances and/or incur Letter of
Credit Obligations, which aggregate commitment shall be Seven Million Five
Hundred Thousand Dollars ($7,500,000) on the date hereof, as such amount may be
adjusted, if at all, from time to time in accordance with this Agreement.
"Facility A Commitment Termination Date": the earliest of (a) the sixth
anniversary of the date hereof, (b) the date of termination of Lenders'
obligations to make Advances and/or incur Letter of Credit Obligations or permit
existing Loans to remain outstanding pursuant to Section 10.2(b), and (c) the
date of indefeasible prepayment in full by Borrowers of the Facility A Loans and
the cancellation and return (or stand-by guarantee) of all Letters of Credit or
the cash collateralization of all Letter of Credit Obligations pursuant to Annex
I and the permanent reduction of the Facility A Commitment to zero dollars ($0).
"Facility A Loan": at any time, the sum of (i) the aggregate amount of
Facility A Advances outstanding to Borrowers plus (ii) the aggregate outstanding
balance of all Letter of Credit Obligations incurred on behalf of Borrowers.
Unless the context otherwise requires, references to the outstanding principal
balance of the Facility A Loan shall include the outstanding balance of Letter
of Credit Obligations.
"Facility A Note": as defined in Section 2.3(a).
"Facility B Advance": any Advance made pursuant to Section 2.2.
7
"Facility B Commitment": (a) as to any Lender, the aggregate commitment of
such Lender to make its Pro Rata Share of the Facility B Advances hereunder or
in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make the Facility B
Advances, which aggregate commitment shall be Forty-Two Million Five Hundred
Thousand Dollars ($42,500,000) on the date hereof, as such amount may be
adjusted, if at all, from time to time in accordance with this Agreement.
"Facility B Commitment Termination Date": the earliest of (a) the first
anniversary of the Closing Date, (b) the date of termination of Lenders'
obligations to make the Facility B Advances or permit the Facility B Loan to
remain outstanding pursuant to Section 10.2(b) and (c) the date of permanent
cancellation or reduction of the Facility B Commitment to zero dollars ($0).
"Facility B Loan": at any time, the aggregate amount of Facility B
Advances outstanding to Borrowers.
"Facility B Loan Maturity Date": the earlier of (a) the eighth anniversary
of the date hereof and (b) the date of termination of Lenders' obligations to
permit the Facility B Loan to remain outstanding pursuant to Section 10.2(b).
"Facility B Note": as defined in Section 2.3(b).
"FCC": the Federal Communications Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.
"Federal Funds Rate": shall mean, for any day, a floating rate equal to
the weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Administrative Agent.
"Fees": any and all fees payable to Administrative Agent or any Lender
pursuant to this Agreement or any of the other Loan Documents.
"Financial Statements": the consolidated income statements, statements of
cash flows and balance sheets of Loan Parties delivered in accordance with this
Agreement.
"First Borrowing Date": the first date on which any Loan is extended or
any Letter of Credit Obligations is incurred by Lenders hereunder.
"Fiscal Quarter": any of the quarterly accounting periods of Loan Parties
ending on March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year": any of the annual accounting periods of Loan Parties ending
on December 31 of each year.
"Fixed Charges": the sum, for any period, of (i) Total Debt Service, (ii)
Capital Expenditures and (iii) cash taxes.
8
"Fixed Charges Coverage Ratio": EBITDA for any period of four (4)
consecutive Fiscal Quarters divided by Fixed Charges for such period.
"GAAP": subject to Section 1.2, 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
the Loan Parties' independent certified public accountants concur), applied both
to classification of items and amounts.
"General Intangibles": as defined in Section 4.1(d).
"Governmental Actions": actions by any Governmental Authority.
"Governmental Authority": the federal government, any state or political
subdivision thereof, any city or municipal entity, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties": collectively, the Holdings Guaranty and any other guaranty
executed by any Guarantor in favor of Secured Parties in respect of the
Obligations.
"Guarantors": Holdings and any existing or future Subsidiary of Holdings
which is not a Borrower and which executes a guaranty or other similar agreement
in favor of Secured Parties in respect of the Obligations.
"Hazardous Material": any substance, material or waste which is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance which is (a) defined as a "solid
waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls ("PCBs")
or any radioactive substance.
"Holdings": as defined in the recitals to this Agreement.
"Holdings Guaranty": the Guaranty of Holdings, pursuant to Article 11.
"Holdings Pledge Agreement": the Pledge Agreement executed by Holdings
pursuant to which all of the Stock of all corporate Borrowers (or at least 99%
in the case of US LEC of Virginia, L.L.C.) and 100% of the Stock of US LEC of
Georgia Inc. is pledged to Administrative Agent on behalf of Secured Parties,
substantially in the form of Exhibit F.
"Indebtedness": as to any Person, at a particular time, (a) indebtedness
for borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which such Person otherwise assures a
creditor against loss, (b) obligations under leases which shall have been or
9
should be, in accordance with GAAP, recorded as Capital Leases in respect of
which obligations such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person assures a
creditor against loss, (c) obligations of such Person to purchase or repurchase
accounts receivable, chattel paper or other payment rights sold or assigned by
such Person, (d) indebtedness or obligations of such Person under or with
respect to letters of credit, notes, bonds or other debt instruments (other than
letters of credit that are cash collateralized) and (e) all obligations of such
Person under any interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising from
fluctuations in interest rates, in each case whether contingent or matured.
"Interest Expense": for any period, the aggregate amount of interest,
hedging costs and fees (excluding closing fees) paid or payable during such
period by the Loan Parties in respect of Total Debt.
"Interest Payment Date": (a) as to any Base Rate Loan, the last Business
Day of each Fiscal Quarter to occur while such Loan is outstanding, (b) as to
any LIBOR Loan, the last day of the applicable LIBOR Period; provided, however,
that in the case of any LIBOR Period greater than three (3) months in duration,
interest shall be payable at three-month intervals and on the last day of such
LIBOR Period; and provided, further, that, in addition to the foregoing, each of
(x) the date upon which all of the Commitments have been terminated and the
Loans have been paid in full and (y) the Commitment Termination Date shall be
deemed to be an "Interest Payment Date" with respect to any interest which is
then accrued under this Agreement.
"Inventory": as defined in Section 4.1(e).
"Landlord Consent": a consent substantially in the form of Exhibit G or in
other form acceptable to Requisite Lenders executed by the owner/landlord,
sublessor and/or licensor (including carriers) of any real property where any of
the Collateral is or is to be located.
"Law": any law (including common law), constitution, statute, regulation,
rule, ordinance, order, injunction, writ, decree or award of any governmental
body or court of competent jurisdiction or of any arbitrator (including but not
limited to ERISA, the Code, the UCC, any applicable tax law, product safety law,
occupational safety or health law, Communications Law, Environmental Law and/or
securities laws).
"L/C Sublimit": as defined in Annex I.
"Lenders": GECC, First Union National Bank and, if either such Lender
shall decide to assign all or any portion of the Obligations, such term shall
include such assignee and any subsequent assignee of such assignee.
"Letter of Credit Obligations": all outstanding obligations incurred by
Administrative Agent or Lenders at the request of Borrower Representative,
whether direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance of a reimbursement agreement or guaranty by
Administrative Agent or purchase by Lenders of a participation as set forth in
Annex I
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with respect to any Letter of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount which may be payable by
Administrative Agent or Lenders thereupon or pursuant thereto.
"Letters of Credit": commercial or standby letters of credit issued for
the account of any Borrower by any L/C Issuer for which Administrative Agent and
Lenders have incurred Letter of Credit Obligations.
"LIBOR Business Day": a Business Day on which banks in the city of London
are generally open for interbank or foreign exchange transactions.
"LIBOR Loan": a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.
"LIBOR Period": with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day selected by Borrower Representative pursuant to this
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower Representative's irrevocable notice to Administrative Agent as set
forth in Section 2.11(e); provided, however, that the foregoing provision
relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period pertaining to a LIBOR Loan that begins on the
last LIBOR Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month;
(c) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period
for such Loan; and
(d) Borrower Representative shall select LIBOR Periods so that there
shall be no more than six (6) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate": for each LIBOR Period, a rate of interest determined by
Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on the second full LIBOR Business Day next preceding
the first day of each LIBOR Period
11
(unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other governmental
authority having jurisdiction with respect thereto, as now and from time
to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) which are
required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Administrative
Agent and Borrower Representative.
"Lien": any mortgage, pledge, hypothecation, lien (statutory or other),
judgment lien, security interest, security agreement, charge or other
encumbrance, or other security arrangement of any nature whatsoever, including,
without limitation, any installment contract, conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security and the filing of any financing statement under the UCC or comparable
law of any jurisdiction.
"Loan Documents": this Agreement, the Notes, the Security Documents, the
Guaranties, all other filings and all other agreements, instruments, documents
and certificates identified in the Closing Checklist executed and delivered to,
or in favor of, Administrative Agent and/or Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, filings
and all other written matter whether heretofore, now or hereafter executed by or
on behalf of any Loan Party, or any employee of any Loan Party, and delivered to
Administrative Agent or any Lender in connection with this Agreement or the
transactions contemplated hereby. Any reference in this Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to such Agreement as the same may be in
effect at any and all times such reference becomes operative.
"Loan Parties": the Borrowers, Holdings and each other Guarantor.
"Loans": the Facility A Loan and the Facility B Loan.
"Loss of Key Management": an occurrence whereupon, at any time, either one
of the Permitted Holders shall cease to be an officer or director of Holdings
and Holdings fails to designate within thirty (30) days therefrom a replacement
as an officer or director in his stead or provide a plan to designate such
replacement which is reasonably acceptable to Requisite Lenders.
"Markets": as defined in Schedule 1.
12
"Material Adverse Effect" or "Material Adverse Change": a material adverse
effect on or material adverse change in (i) a material portion of the
Collateral, (ii) the business, financial or other condition, prospects or
projections of Holdings and its Subsidiaries taken as a whole from that
reflected in the Business Plan, (iii) the ability of any Loan Party to perform
its obligations under this Agreement, the Notes, the other Loan Documents or the
System Agreements or (iv) Administrative Agent's or Lenders' ability to enforce
the rights and remedies granted under this Agreement or the other Loan
Documents, in all cases whether attributable to a single circumstance or event
or an aggregation of circumstances or events.
"Maximum Lawful Rate": as defined in Section 2.11(f).
"Network": a fiber optic transmission and communications system operated
by a Loan Party, including all Equipment related thereto.
"Non-Funding Lender": as defined in Section 3.9(a)(ii).
"Notes": the Facility A Notes and the Facility B Notes, collectively.
"Notice of Conversion/Continuation": as defined in Section 2.11(e).
"Obligations": all loans, advances, debts, liabilities and obligations for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by any Loan Party to Administrative Agent
or any Lender, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under this Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
which accrues after the commencement of any case or proceeding in bankruptcy
after the insolvency of, or for the reorganization of, any Loan Party, whether
or not allowed in such proceeding), Letter of Credit Obligations, Fees,
expenses, attorneys' fees and any other sum chargeable to any Loan Party under
this Agreement or any of the other Loan Documents.
"Organizational Documents": with respect to a corporation, the articles of
incorporation and by-laws of such corporation; with respect to a partnership,
the certificate of partnership (or limited partnership, as applicable) and
partnership agreement, together with the analogous documents for any corporate
or partnership general partner; and in any case, any other document governing
the formation and conduct of business by such entity.
"Other Lender": as defined in Section 3.9(d).
"PBGC": the Pension Benefit Guaranty Corporation established under Title
IV of ERISA or any other governmental agency, department or instrumentality
succeeding to its functions.
13
"Permits": all consents, licenses, notices, approvals, authorizations,
filings, orders, registrations, and permits required by any Governmental
Authority for the construction and operation of a Network (excluding Regulatory
Authorizations), issued or obtained as and when required in accordance with all
Requirements of Law.
"Permitted Debt": (i) the Obligations, (ii) existing Indebtedness
(including existing letters of credit not to exceed $1,500,000 and their
subsequent renewal) specified on Schedule 9.1 and any refinancings thereof on
terms that in the aggregate are not less favorable to Loan Parties, (iii)
Indebtedness incurred for the purposes specified on Schedule 9.1 up to an
aggregate of $1,750,000 and any refinancings thereof on terms that in the
aggregate are not less favorable to Loan Parties, (iv) Permitted Subordinated
Debt, (v) inter-company Indebtedness between Loan Parties and (vi) interest rate
protection agreements in connection with Indebtedness permitted hereunder.
"Permitted Encumbrances": the Liens permitted under Section 9.2.
"Permitted Holders": the present chief executive officer of Holdings and
the present president of Holdings.
"Permitted Subordinated Debt": Indebtedness in an amount not greater than
$150,000,000 that (i) does not require any payment of principal until twelve
(12) months after the Facility B Loan Maturity Date, (ii) is issued on market
terms prevailing at the time and (iii) is subordinated on terms reasonably
acceptable to Requisite Lenders to the Indebtedness created hereunder or
pursuant to any other Loan Document.
"Person": any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
"Plan": any employee pension benefit plan to which Section 4021 of ERISA
applies and (i) which is maintained for employees of any Loan Party or (ii) to
which any Loan Party made, or was required to make, contributions at any time
within the preceding five (5) years.
"Pledge Agreement(s)": the Holdings Pledge Agreement and any other pledge
agreement executed by any Loan Party pledging any stock or membership or
ownership interests to Administrative Agent on behalf of Secured Parties.
"Proceeds": as defined in Section 4.1(f).
"Projections": the Loan Parties' forecasted consolidated (a) balance
sheets; (b) profit and loss statements (which also were provided on a
consolidating basis); and (c) cash flow statements, all prepared on a Subsidiary
by Subsidiary basis, together with appropriate supporting details and a
statement of underlying assumptions.
14
"Pro Rata Share": (a) with respect to all matters relating to any Lender,
the percentage obtained by dividing (i) the Commitment of such Lender by (ii)
the aggregate Commitments of all Lenders and (b) with respect to all Loans on
and after the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Loans held by that Lender
by (ii) the outstanding principal balance of the Loans held by all Lenders.
"PUC": the public utilities commission for the state or any other
jurisdiction in which all or any portion of a Network is located, or any
successor agency, and any successor, in whole or in part, to its functions or
jurisdictions, and any other Persons specified on Schedule 1.
"Quarterly Revenues": for any Fiscal Quarter, revenues for such quarter
(other than revenues derived from sources which are disputing amounts payable to
any Loan Party with respect to reciprocal compensation related to internet
service providers and related facility charges) that are received from any third
party entity which is not an Affiliate of any Loan Party or the principal
shareholders of such Loan Party.
"Regulatory Authorizations": all approvals, authorizations, licenses,
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter made by, to or in respect of any telecommunications Governmental
Authority, including any certificates of public convenience and all grants,
approvals, licenses, filings and registrations from or to the FCC or PUC or
under any Communications Law necessary in order to enable any Loan Party to
provide telecommunications service of the type provided or proposed to be
provided by such Loan Party and any authorizations specified on Schedule 1.
"Regulatory Event": any of the following events: (i) any Lender becomes
subject to regulation as a "carrier," a "telephone company," a "common carrier,"
a "public utility" or otherwise under any applicable law or governmental
regulation, federal, state or local, solely as a result of the transactions
contemplated by this Agreement and the other Loan Documents, or (ii) any Loan
Party becomes subject to regulation by any Governmental Authority in any way
that is materially different from the regulation existing at the date hereof and
that could reasonably be expected to have a Material Adverse Effect, or (iii)
the FCC or any PUC issues an order revoking, denying or refusing to renew, or
recommending the revocation, denial or non-renewal of, any Regulatory
Authorization that could reasonably be expected to have a Material Adverse
Effect.
"Release": any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
"Replacement Lender": as defined in Section 2.18(d).
"Reportable Event": (i) a reportable event described in Section 4043 of
ERISA and regulations thereunder, (ii) a withdrawal by a substantial employer
from a Plan to which more than one employer contributes, as referred to in
Section 4063(b) of ERISA, or (iii) a cessation of
15
operations at a facility causing more than twenty percent (20%) of Plan
participants to be separated from employment, as referred to in Section 4062(f)
of ERISA.
"Required Consents": the Governmental Authority approvals or consents of
other Persons required with respect to each Loan Party's execution, delivery and
performance of this Agreement and the other Loan Documents, as defined in
Schedule 5.4.
"Requirement of Law": as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or transactions or to
which such Person or any of its property or transactions is subject, including
all applicable common law and equitable principles, all provisions of all
applicable state and federal constitutions, statutes, rules, regulations and
orders of governmental bodies, all Permits or Regulatory Authorizations issued
to Borrower, all Communications Laws and all Environmental Laws.
"Requisite Lenders": (a) Lenders having more than sixty-six and two-thirds
percent (66-2/3%) of the Commitments of all Lenders or (b) if the Commitments
have been terminated, more than sixty-six and two-thirds percent (66-2/3%) of
the aggregate outstanding amount of all Loans; provided, however, that at such
time as there are five (5) or more Lenders, such percentage shall be reduced to
fifty percent (50%).
"Responsible Officer": of a Person, the chief executive officer, the
president, the general counsel, the chief financial officer or the director of
treasury operations of such Person.
"Secured Parties": Administrative Agent and Lenders.
"Security Documents": this Agreement, the Pledge Agreements, the Landlord
Consents, all financing statements, and any other documents granting,
evidencing, or perfecting any security interest or Lien with respect to or
securing any of the Obligations.
"Senior Debt": all Indebtedness, guarantees and liabilities secured by
liens on property of Loan Parties, other than Permitted Subordinated Debt.
"Senior Debt to Total Capitalization": Senior Debt, at any date, divided
by Total Capitalization at the same date.
"Senior Leverage Ratio": for any period, Senior Debt as of any date
divided by the product of (i) EBITDA for the two (2) most recent Fiscal Quarters
ending on or prior to such date multiplied by (ii) two (2).
"Site Leases": collectively, all leases, subleases, tower leases,
co-location agreements, license agreements, easements, use agreements,
privileges, access agreements, right-of-way agreements and all other agreements
relating to the use by any Loan Party of any Site.
16
"Site(s)": any site where Equipment with a cost of more than $100,000 is
located.
"Software" and "Software Licenses": any software now or hereafter owned
by, or licensed to, any Loan Party or with respect to which such Loan Party has
or may have license or use rights.
"Solvent": with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person 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; (c) 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; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation, guarantees and pension plan liabilities) at any time shall be
computed as the amount which, in light of all the facts and circumstances
existing at the time, represents the amount which can be reasonably be expected
to become an actual or matured liability.
"Stage 1": the period of time from the date hereof until a date when
Borrower Representative submits Financial Statements and compliance certificates
pursuant to Section 8.1 reflecting positive EBITDA for the previous four (4)
consecutive Fiscal Quarters.
"Stage 2": the period immediately following the end of Stage 1.
"Stock": 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 Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended).
"Subsidiary": with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock, whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner.
17
"System Agreements": any and all agreements and documents executed by or
delivered by or to any Loan Party at any time in connection with any Network or
its acquisition, construction or operation, including all management and
maintenance agreements, agreements for storage or warehousing of Collateral,
Site Leases and interconnection agreements.
"Taxes": taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on or measured by
the net income of Administrative Agent or a Lender by the jurisdiction under
which Administrative Agent or any Lender is organized or from which it makes the
Advances or any political subdivision of either thereof.
"Termination Date": the date on which the Loans have been indefeasibly
repaid in full and all other amounts then due and payable under this Agreement
or any of the other Loan Documents have been indefeasibly paid in full and
Letter of Credit Obligations have been cash collateralized, canceled or backed
by stand-by letters of credit in accordance with Annex I, and no Borrower shall
have any further right to borrow any monies under this Agreement.
"Total Capitalization": for Loan Parties taken as a whole, Adjusted Total
Debt plus paid-in-capital (including preferred stock but excluding additional
equity issued as pay-in-kind dividends on issued and outstanding equity
securities) and excluding any accumulated deficits resulting from operations.
"Total Debt": all Indebtedness, guarantees and liabilities secured by
liens on property of Loan Parties.
"Total Debt to Property and Equipment": Total Debt, at any date, divided
by property and equipment, net, as reflected on Financial Statements as of the
same date.
"Total Debt to Total Capitalization": Total Debt, at any date, divided by
Total Capitalization as of the same date.
"Total Debt Service": the sum, for any period, of: (i) mandatory principal
payments on Total Debt and (ii) Interest Expense (excluding any portion thereof
not paid in cash).
"Total Leverage Ratio": for any period, Total Debt as of any date divided
by the product of (i) EBITDA for the two (2) most recent Fiscal Quarters ending
on or prior to such date multiplied by (ii) two (2).
"UCC": the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York or the Uniform Commercial Code of another
jurisdiction, to the extent it may be required to apply to any item or items of
Collateral.
1.2 ACCOUNTING PRINCIPLES; SUBSIDIARIES.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this
18
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), consistently applied, and all
accounting or financial terms shall have the meanings ascribed to such terms by
GAAP. If at any time a Loan Party has any Subsidiaries, all accounting and
financial terms herein shall be deemed to include references to consolidated and
consolidating principles, and covenants, representations and agreements with
respect to a Loan Party and its properties and activities shall be deemed to
refer to such Loan Party and its consolidated Subsidiaries collectively. For
purposes of Section 8.15, GAAP shall be determined on the basis of such
principles in effect on the date of the most recent annual audited Financial
Statements provided hereunder (or if prior to delivery of the first such annual
audited Financial Statements hereunder, then on a basis consistent with the
annual audited Financial Statements referenced in Section 5.10); provided,
however, that if due to a change in application of GAAP or the rules promulgated
with respect thereto, (i) Borrower Representative shall object to determination
of compliance with the financial covenants in Section 8.15 on such basis or (ii)
Administrative Agent or Requisite Lenders shall object to determination of
compliance therewith on such basis within thirty (30) days after delivery of
such Financial Statements, then such calculations shall be made on a basis
consistent with the most recent Financial Statements delivered as to which no
such objection shall have been made.
1.3 UCC TERMS.
Except as otherwise provided or amplified (but not limited) herein, terms
used in this Agreement that are defined in the UCC shall have the same meanings
herein.
1.4 GENERAL CONSTRUCTION; CAPTIONS.
All definitions and other terms used in this Agreement shall be equally
applicable to the singular and plural forms thereof, and all references to any
gender shall include all other genders. The words "hereof," "hereto," "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular Article, Section,
subsection or clause in this Agreement. References herein to an Exhibit,
Schedule, Article, Section, subsection or clause refer to the appropriate
Exhibit, Schedule, Article, Section, subsection or clause in this Agreement
unless otherwise specified. The word "including" shall have the meaning
represented by the phrase "including, without limitation." The captions and
table of contents in this Agreement and the other Loan Documents are for
convenience only, and in no way limit or amplify the provisions hereof.
1.5 REFERENCES TO DOCUMENTS AND LAWS.
All defined terms and references in this Agreement or the other Loan
Documents with respect to any agreements, notes, instruments, certificates or
other documents shall be deemed to refer to such documents and to any
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements of and to such documents. All references to Laws
shall include any amendments thereof and any successor statutes and regulations.
19
ARTICLE II
LOANS
2.1 FACILITY A.
Subject to the terms and conditions hereof, each Lender agrees to make
available from time to time until the Facility A Commitment Termination Date its
Pro Rata Share of all Facility A Advances. The Pro Rata Share of any Lender of
the Facility A Loan shall not at any time exceed such Lender's Facility A
Commitment. The obligations of each Lender hereunder shall be several and not
joint. Until the Facility A Commitment Termination Date, Borrowers may from time
to time borrow, repay and reborrow under this Section 2.1.
2.2 FACILITY B.
Subject to the terms and conditions hereof, each Lender agrees to make
available from time to time until the Facility B Commitment Termination Date its
Pro Rata Share of all Facility B Advances. The Pro Rata Share of any Lender of
the Facility B Loan shall not at any time exceed such Lender's Facility B
Commitment. The obligations of each Lender hereunder shall be several and not
joint. Until the Facility B Commitment Termination Date, Borrowers may from time
to time borrow, repay and reborrow under this Section 2.2. After the Facility B
Commitment Termination Date, amounts repaid or prepaid may not be reborrowed
under this Section 2.2.
2.3 NOTES.
(a) Borrowers shall execute and deliver to each Lender a note to
evidence the Facility A Commitment of that Lender. Each note shall be in the
principal amount of the Facility A Commitment of the applicable Lender, dated
the First Borrowing Date, and substantially in the form of Exhibit A-1 (each a
"Facility A Note" and, collectively, the "Facility A Notes"). Each Facility A
Note shall represent the obligation of each Borrower to pay the amount of each
Lender's Facility A Commitment or, if less, the applicable Lender's Pro Rata
Share of the aggregate unpaid principal amount of all Facility A Advances to
such Borrower together with interest thereon as prescribed in Section 2.11.
(b) Borrowers shall execute and deliver to each Lender a note to
evidence the Facility B Commitment of that Lender. Each note shall be in the
principal amount of the Facility B Commitment of the applicable Lender, dated
the First Borrowing Date, and substantially in the form of Exhibit A-2 (each a
"Facility B Note" and, collectively, the "Facility B Notes"). Each Facility B
Note shall represent the obligation of each Borrower to pay the amount of each
Lender's Facility B Commitment or, if less, the applicable Lender's Pro Rata
Share of the aggregate unpaid principal amount of all Facility B Advances to
such Borrower together with interest thereon as prescribed in Section 2.11.
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2.4 LETTERS OF CREDIT.
Subject to and in accordance with the terms and conditions contained
herein and in Annex I, Borrower Representative shall have the right to request,
and Lenders agree to incur, or purchase participations in, Letter of Credit
Obligations for the account of Borrowers.
2.5 RELIANCE ON NOTICES; APPOINTMENT OF BORROWER REPRESENTATIVE.
Administrative Agent and each Lender shall be entitled to rely upon, and
shall be fully protected in relying upon, any Borrowing Certificate, Notice of
Conversion/Continuation or similar notice believed by Administrative Agent or
such Lender to be genuine. Administrative Agent and each Lender may assume that
each Person executing and delivering such a notice was duly authorized, unless
the responsible individual acting thereon for Administrative Agent or such
Lender has actual knowledge to the contrary. Each Borrower hereby designates
Holdings as its representative and agent on its behalf for the purposes of
issuing Borrowing Certificates and Notices of Conversion/Continuation, giving
instructions with respect to the disbursement of the proceeds of the Loans,
selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan Documents
(Holdings, in that capacity, being "Borrower Representative"). Holdings hereby
accepts such appointment. Administrative Agent and each Lender may regard any
notice or other communication pursuant to any Loan Document from Borrower
Representative as a notice or communication from all Borrowers, and may give any
notice or communication required or permitted to be given to any Borrower or
Borrowers hereunder to Borrower Representative on behalf of such Borrower or
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
2.6 PROCEDURES FOR BORROWING.
(a) Borrowing Certificates. To request a Facility A Advance or a
Facility B Advance hereunder, Borrower Representative shall send to
Administrative Agent a completed Borrowing Certificate at least three (3)
Business Days prior to the requested Borrowing Date for LIBOR Loans and one (1)
Business Day prior to the requested Borrowing Date for Base Rate Loans (or such
shorter period for the First Borrowing Date as agreed to by Lenders). Each
Borrowing Certificate shall specify therein (i) the requested Borrowing Date,
(ii) the aggregate amount of such Advance, (iii) the amount thereof, if any,
requested to be LIBOR Loans and (iv) the initial LIBOR Period or Periods for any
such LIBOR Loans. The Loans shall be made as Base Rate Loans unless (subject to
Section 2.18) the Borrowing Certificate specifies that all or a portion thereof
shall be LIBOR Loans. All LIBOR Loans shall comply with Section 2.11(e).
Each Borrowing Certificate shall be irrevocable and binding on
Borrowers. In the case of any requested Advance which the related Borrowing
Certificate specifies is to be comprised
21
of LIBOR Loans, Borrowers shall, jointly and severally, indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Borrowing Certificate
for such requested Advance the applicable conditions set forth in Article 7,
including any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund any LIBOR Loan to be made by such Lender as part
of such requested Advance when such LIBOR Loan, as a result of such failure, is
not made on such date.
(b) Lender's Obligation. The failure of any Lender to make the
Advance to be made by it as part of any Loan shall not relieve any other Lender
of its obligation, if any, hereunder to make its Advance on such Borrowing Date,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the Borrowing Date.
(c) Advances. Each Advance (other than the last Advance) shall be in
an aggregate principal amount of not less than $1,000,000 and integral multiples
of $100,000 in excess thereof. No amount may be borrowed hereunder on or after
the Commitment Termination Date applicable to the proposed Advance.
2.7 FACILITY B LOAN AMORTIZATION.
The Facility B Loan shall be amortized according to Schedule 2.7.
2.8 REDUCTION OF FACILITY A COMMITMENT.
The Facility A Commitment shall be permanently reduced according to the
reduction schedule set forth on Schedule 2.8 (and the Facility A Commitment of
each Lender shall be reduced by its Pro Rata Share of such reduction).
2.9 MATURITY.
(a) The entire unpaid balance of the aggregate Facility A Loan and
all other non-contingent Obligations shall be immediately due and payable in
full in immediately available funds on the Facility A Commitment Termination
Date, if not sooner paid in full pursuant to Section 2.10.
(b)The entire unpaid balance of the aggregate Facility B Loan and
all other non-contingent Obligations shall be immediately due and payable in
full in immediately available funds on the Facility B Loan Maturity Date, if not
sooner paid in full pursuant to Section 2.10.
2.10 PREPAYMENTS; COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments. (i) Borrowers may, at their option, at
any time and from time to time, in whole or in part, voluntarily prepay all or
part of any Loan upon three (3) Business Days' prior written notice to
Administrative Agent, specifying the date and amount of prepayment, in a minimum
amount of $1,000,000, plus all accrued but unpaid interest thereon and
22
any LIBOR funding breakage costs in accordance with Section 2.15(b). Such notice
shall be irrevocable and the principal amount specified in such notice shall be
due and payable on the date specified together with accrued interest on the
amount prepaid.
(ii) Borrowers may, at their option, at any time, permanently
reduce from time to time or terminate the Facility A Commitment or the Facility
B Commitment; provided, however, that neither the Facility A Commitment nor the
Facility B Commitment shall be reduced to an amount less than the outstanding
principal amount of the Facility A Loan or the Facility B Loan, respectively.
(b) Mandatory Prepayments. (i) Asset Dispositions. In the event of
receipt by any Loan Party of proceeds of any Asset Disposition (including
condemnation proceeds) that are not used within one hundred eighty (180) days of
receipt to acquire property, plant or equipment or a Regulatory Authorization,
Borrowers shall prepay the Loans within such one hundred eighty (180) day period
in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by such Loan Party in connection
therewith (in each case, paid to non-Affiliates), (B) transfer taxes and (C) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith. Any such prepayment shall be applied in accordance with clause (c) of
this Section 2.10.
(ii) Sale or Issuance of Stock. No later than the Business Day
following the receipt by Holdings of any proceeds from a sale or issuance of
Stock by Holdings (other than from the exercise of options granted pursuant to
equity-based compensation arrangements or from the exercise of currently
outstanding warrants), Borrowers shall prepay the Loans in an amount equal to
all such proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. Any such
prepayment shall be applied in accordance with clause (c) of this Section 2.10.
(iii) Excess Cash Flow. Borrowers shall prepay the Loans, in
an amount equal to fifty percent (50%) of Excess Cash Flow for each such Fiscal
Year commencing with the Fiscal Year ended December 31, 2001, which payment
shall be made on the earlier of the date which is ten (10) days after (A) the
date on which Holdings' annual audited Financial Statements for the immediately
preceding Fiscal Year are delivered pursuant to Section 8.1 or (B) the date on
which such annual audited Financial Statements were required to be delivered
pursuant to Section 8.1.
(c) Application of Mandatory Prepayments. Any prepayments made by
Borrowers pursuant to clause (b) of this Section 2.10 above shall be applied as
follows: first, to Fees and reimbursable expenses of Administrative Agent then
due and payable pursuant to any of the Loan Documents; second, to interest then
due and payable on the Facility B Loan; third, to prepay the scheduled
installments of the Facility B Loan in inverse order of maturity until such Loan
shall have been prepaid in full and, for any such prepayments before the
Facility B Commitment Termination Date, the Facility B Commitment shall be
reduced pro tanto; fourth, to interest then due and payable on the Facility A
Advances; fifth, to the principal balance of the
23
Facility A Advances outstanding until the same shall have been paid in full;
sixth to any Letter of Credit Obligations of Borrowers to provide cash
collateral therefor in the manner set forth in Annex I, until all such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
in Annex I.
2.11 INTEREST AND APPLICABLE MARGINS.
(a) Borrowers shall pay interest to Administrative Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) the Base Rate plus the Applicable Base Margin per annum or
(ii) at the election of Borrower Representative and, if permitted herein, the
applicable LIBOR Rate plus the Applicable LIBOR Margin per annum, based on the
aggregate amount of Loans outstanding from time to time.
The Applicable Base Margin and Applicable LIBOR Margin will be 2.50%
and 3.50% per annum, respectively, as of the date hereof. The Applicable Margins
will be adjusted (up or down) prospectively on a quarterly basis as determined
by Loan Parties' consolidated financial performance, commencing with the first
day of the first calendar month that occurs more than five (5) days after the
first day of Stage 2; provided, however, that in the case of LIBOR Loans such
adjustments may not be made before the end of a LIBOR Period. Adjustments in
Applicable Margins will be determined by reference to Schedule 2.11.
All adjustments in the Applicable Margins in Stage 2 will be
implemented quarterly, on a prospective basis, for the period commencing at
least five (5) days after the date of delivery pursuant to Section 8.1 of the
quarterly unaudited or annual audited (as applicable) Financial Statements of
Loan Parties evidencing the need for an adjustment. Concurrently with the
delivery of those Financial Statements, Borrower Representative shall deliver to
Administrative Agent a certificate, signed by its chief financial officer,
setting forth in reasonable detail the basis for the continuance of, or any
change in, the Applicable Margins. Failure to timely deliver such Financial
Statements shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Margins to the highest level
set forth in Schedule 2.11 until the first day of the first calendar month
following the delivery of those Financial Statements demonstrating that such an
increase is not required. If an Event of Default shall have occurred or be
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the first day of the first
calendar month following the date on which such Event of Default is waived or
cured.
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and of
interest shall be made by Administrative Agent on the basis of a three hundred
sixty (360) day year, in each case for the actual number of days occurring in
the period for which such interest and Fees are
24
payable. The Base Rate shall be determined each day based upon the Base Rate as
in effect each day. Each determination by Administrative Agent of an interest
rate and Fees hereunder shall be conclusive, absent manifest error.
(d) As long as an Event of Default shall have occurred and be
continuing under Section 10.1(a), (j) or (k) or as long as any other Event of
Default shall have occurred and be continuing at the election of Requisite
Lenders confirmed by written notice to Borrower Representative, the interest
rates applicable to the Loans and the Letter of Credit Fees shall be increased
by two percent (2%) per annum above the rates of interest or the rate of such
Fees otherwise applicable hereunder ("Default Rate"), and all outstanding
Obligations shall bear interest at the Default Rate applicable to such
Obligations. Interest and Letter of Credit Fees at the Default Rate shall accrue
from the initial date of such Event of Default until that Event of Default is
cured or waived and shall be payable upon demand.
(e) As long as no Default or Event of Default shall have occurred
and be continuing, Borrower Representative shall have the option to (i) request
that any Advances be made as a LIBOR Loan, (ii) convert at any time all or any
part of outstanding Loans from Base Rate Loans to LIBOR Loans, (iii) convert any
LIBOR Loan to a Base Rate Loan, subject to payment of LIBOR funding breakage
costs in accordance with Section 2.15(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iv) continue all or any
portion of any Loan as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the last day of the LIBOR Period of the Loan to be continued. Any Loan to be
made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of such
amount. Any such election must be made by 11:00 a.m. (New York time) on the
third (3rd) Business Day prior to (1) the date of any proposed Advance which is
to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with
respect to any LIBOR Loans to be continued as such or (3) the date on which
Borrower Representative wishes to convert any Base Rate Loan to a LIBOR Loan for
a LIBOR Period designated by Borrower Representative in such election. If no
election is received with respect to a LIBOR Loan by 11:00 a.m. (New York time)
on the third (3rd) Business Day prior to the end of the LIBOR Period with
respect thereto (or if an Event of Default shall have occurred and be
continuing), that LIBOR Loan shall be converted to a Base Rate Loan at the end
of its LIBOR Period. Borrower Representative must make such election by notice
to Administrative Agent in writing, by telecopy or overnight courier. In the
case of any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit C.
(f) Notwithstanding anything to the contrary set forth in this
Section 2.11, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Administrative
Agent, on behalf of Lenders, is equal to the total interest which would have
been
25
received had the interest rate payable hereunder been (but for the operation of
this paragraph) the interest rate payable since the date hereof as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 2.11(a) through (e)
above unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 2.11(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Administrative Agent shall, to
the extent permitted by applicable law, promptly apply such excess in the order
specified in Section 2.13 and thereafter shall refund any excess to Borrowers or
as a court of competent jurisdiction may otherwise order.
2.12 PAYMENTS.
All payments and prepayments to be made in respect of principal, interest
or other amounts due from Borrowers hereunder or under any other Loan Document
shall be payable on or before 1:00 p.m., New York time, on the day when due,
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue. Such
payments shall be made to Administrative Agent at Administrative Agent's office
at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: TFS/US LEC Portfolio
Manager or such other location specified in writing by Administrative Agent, in
immediately available funds, without set off, recoupment, counterclaims or any
other deduction of any nature. Payments received after 1:00 p.m., New York time,
on any Business Day shall be deemed to have been received on the following
Business Day.
26
2.13 APPLICATION AND ALLOCATION OF PAYMENTS.
(a) As long as no Default or Event of Default shall have occurred
and be continuing, (i) payments matching specific scheduled payments then due
shall be applied to those scheduled payments; (ii) voluntary prepayments shall
be applied as determined by Borrower Representative; and (iii) mandatory
prepayments shall be applied as set forth in Section 2.10(c). All payments and
prepayments applied to a particular Loan shall be applied ratably to the portion
thereof held by each Lender as determined by its Pro Rata Share. As to each
other payment, and as to all payments made when an Event of Default shall have
occurred and be continuing or following the Commitment Termination Date, each
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of such Borrower, and each Borrower
hereby irrevocably agrees that Administrative Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Administrative Agent may deem advisable notwithstanding any
previous entry by Administrative Agent in the Loan Account or any other books
and records. In the absence of a specific determination by Requisite Lenders
with respect thereto, payments shall be applied to amounts then due and payable
in the following order: (1) to Fees and Administrative Agent's and Lenders'
expenses reimbursable hereunder; (2) to interest on the Loans, ratably in
proportion to the interest accrued as to each Loan; (3) to principal payments on
the Loans and to provide cash collateral for Letter of Credit Obligations in the
manner described in Annex I, ratably to the aggregate, combined principal
balance of the Loans and outstanding Letter of Credit Obligations; and (4) to
all other Obligations including expenses of Lenders to the extent reimbursable
under Section 2.21.
(b) Administrative Agent is authorized to, and at its sole election
may, charge to the Facility A Loan balance on behalf of each Borrower and cause
to be paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 8.7(a)) and interest and principal, other than principal
of the Facility A Loan, owing by Borrowers under this Agreement or any of the
other Loan Documents if and to the extent Borrowers fail to promptly pay any
such amounts as and when due, even if such charges would cause the balance of
the aggregate Facility A Loan to exceed the Facility A Commitment. At
Administrative Agent's option and to the extent permitted by law, any charges so
made shall constitute part of the Facility A Loan hereunder.
2.14 LOAN ACCOUNT AND ACCOUNTING.
Administrative Agent shall maintain a loan account (the "Loan Account") on
its books to record: all Advances, all payments made by Borrowers, and all other
debits and credits as provided in this Agreement with respect to the Loans or
any other Obligations. All entries in the Loan Account shall be made in
accordance with Administrative Agent's customary accounting practices as in
effect from time to time. The balance in the Loan Account, as recorded on
Administrative Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Administrative Agent and Lenders by Borrowers; provided, however, that any
failure to so record or any error in so recording shall not limit or otherwise
affect any Borrower's duty to pay the Obligations. Administrative Agent shall
render to Borrower Representative a monthly accounting of transactions with
respect to the Loans setting
27
forth the balance of the Loan Account. Unless Borrower Representative notifies
Administrative Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall (absent manifest
error) be deemed final, binding and conclusive upon Borrowers in all respects as
to all matters reflected therein. Only those items expressly objected to in such
notice shall be deemed to be disputed by Borrowers. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of Notes to that Lender and may
rely on the Loan Account as evidence of the amount of Obligations from time to
time owing to it.
2.15 INDEMNITY.
(a) Each Loan Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Administrative Agent, Syndication
Agent, Lenders and their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and representatives
(each, an "Indemnified Person"), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys' fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) which may be instituted or
asserted against or incurred by any such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents and the administration of such credit, and in
connection with or arising out of the transactions contemplated hereunder and
thereunder and any actions or failures to act in connection therewith, including
any and all Environmental Liabilities and legal costs and expenses arising out
of or incurred in connection with disputes between or among any parties to any
of the Loan Documents (collectively, "Indemnified Liabilities"); provided,
however, that no such Loan Party shall be liable for any indemnification to an
Indemnified Person to the extent that any such suit, action, proceeding, claim,
damage, loss, liability or expense results from that Indemnified Person's gross
negligence or willful misconduct or material and knowing breach of its
obligations and this Agreement. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD
PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or is the
result of acceleration, by operation of law or otherwise); (ii) any Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) any Borrower shall default in making any borrowing of,
conversion into or continuation of LIBOR Loans after Borrower Representative has
given notice requesting the same in accordance herewith; or (iv) any Borrower
shall fail to make any prepayment of a LIBOR Loan after Borrower
28
Representative has given a notice thereof in accordance herewith, Borrowers
shall jointly and severally indemnify and hold harmless each Lender from and
against all losses, costs and expenses resulting from or arising from any of the
foregoing. Such indemnification shall include any loss (including loss of
margin) or expense arising from the reemployment of funds obtained by it or from
fees payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit which bears interest at the LIBOR Rate in an amount
equal to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, however, that each Lender may fund each of its
LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this subsection. This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder. As promptly as practicable under
the circumstances, each Lender shall provide Borrower Representative with its
written calculation of all amounts payable pursuant to this Section 2.15, and
such calculation shall be presumed correct (absent manifest error) and shall be
binding on the parties hereto unless Borrower Representative shall object in
writing within thirty (30) Business Days of receipt thereof, specifying the
basis for such objection in detail.
2.16 ACCESS.
Each Loan Party which is a party hereto shall, during normal business
hours, from time to time upon one (1) Business Day's prior notice as frequently
as Administrative Agent determines to be appropriate: (a) provide Administrative
Agent, each initial Lender and any of their officers, employees and agents
access to the properties, facilities, advisors and employees (including
officers) of such Loan Party and to the Collateral, (b) permit Administrative
Agent, each initial Lender and any of their officers, employees and agents, to
inspect, audit and make extracts from such Loan Party's books and records and
(c) permit Administrative Agent, each initial Lender and their officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Equipment, Inventory and other Collateral of such
Loan Party. If a Default or Event of Default shall have occurred and be
continuing or if access is necessary to preserve or protect the Collateral as
determined by Administrative Agent, each such Loan Party shall provide such
access to Administrative Agent and to each Lender at all times and without
advance notice. Furthermore, as long as any Event of Default shall have occurred
and be continuing, each such Loan Party shall provide Administrative Agent and
each Lender with access to their suppliers and customers. Each Loan Party shall
make available to Administrative Agent, each initial Lender and their respective
counsel, as quickly as is possible under the circumstances, originals or copies
of all books and records which Administrative Agent may request. Each Loan Party
shall deliver any document or instrument necessary for Administrative Agent or
each initial Lender, as it may from time to time request, to obtain records from
any service bureau or other Person which maintains records for such Loan Party,
and shall maintain duplicate records or supporting documentation on media,
including computer tapes and discs owned by such Loan Party. Any Lender or its
representatives (other than any Person in the telecommunications business), upon
request by such Lender to Administrative Agent, may accompany Administrative
Agent on any such visit.
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2.17 TAXES.
(a) Any and all payments by Borrowers hereunder (including any
payments made pursuant to Article 11 or under any other Loan Document) shall be
made, in accordance with this Section 2.17, free and clear of and without
deduction for any and all present or future Taxes. If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to Article 11 or under any other
Loan Document), (i) the sum payable shall be increased as much as shall be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.17) Administrative
Agent- or Lenders, as applicable, receive an amount equal to the sum they would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions, and (iii) such Borrower shall pay the full amount deducted to
the relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, Borrower Representative
shall furnish to Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof.
(b) Each Loan Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of demand therefor, pay
Administrative Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 2.17)
paid by Administrative Agent or such Lender, as appropriate, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted.
2.18 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the date hereof, from any central
bank or other Governmental Authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrowers
shall from time to time upon demand by such Lender made within ninety (90) days
of the occurrence thereof (with a copy of such demand to Administrative Agent)
pay to Administrative Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower Representative and to Administrative Agent
shall, absent manifest error, be final, conclusive and binding for all purposes.
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(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the date hereof, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Administrative Agent), pay to Administrative Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of such increased cost,
submitted to Borrower Representative and to Administrative Agent by such Lender,
shall be conclusive and binding on Borrowers for all purposes, absent manifest
error. Each Lender agrees that, as promptly as practicable after it becomes
aware of any circumstances referred to above which would result in any such
increased cost, but in any event within ninety (90) days thereof, the affected
Lender shall, to the extent not inconsistent with such Lender's internal
policies of general application, use reasonable commercial efforts to minimize
costs and expenses incurred by it and payable to it by Borrowers pursuant to
this Section 2.18(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower Representative
through Administrative Agent, (i) the obligation of such Lender to agree to make
or to make or to continue to fund or maintain LIBOR Loans shall terminate and
(ii) Borrowers shall forthwith prepay in full all outstanding LIBOR Loans owing
by such Borrower to such Lender, together with interest accrued thereon, unless
Borrower Representative on behalf of Borrowers, within five (5) Business Days
after the delivery of such notice and demand, converts all such Loans into a
Loan bearing interest based on the Base Rate.
(d) Replacement of Lender in Respect of Increased Costs. Within
fifteen (15) days after receipt by Borrower Representative of written notice and
demand from any Lender (an "Affected Lender") for payment of additional amounts
or increased costs as provided in Section 2.17, 2.18(a) or 2.18(b), Borrower
Representative may, at its option, notify Administrative Agent and such Affected
Lender of its intention to replace the Affected Lender. As long as no Default or
Event of Default shall have occurred and be continuing, Borrower Representative,
with the consent of Administrative Agent, may obtain, at Borrowers' expense, a
replacement Lender ("Replacement Lender") for the Affected Lender, which
Replacement Lender must be satisfactory to Administrative Agent. If Borrowers
obtain a Replacement Lender within ninety (90) days following notice of their
intention to do so, the Affected Lender must sell and assign its Loans and
Commitments to such Replacement Lender for an amount equal to the principal
balance of all Loans held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale; provided, however, that
Borrowers shall have reimbursed such Affected Lender for the additional amounts
or increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment.
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Notwithstanding the foregoing, Borrowers shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of Borrowers' notice of intention to replace such Affected Lender.
Furthermore, if Borrowers give a notice of intention to replace and do not so
replace such Affected Lender within ninety (90) days thereafter, Borrowers'
rights under this Section 2.18(d) shall terminate and Borrowers shall promptly
pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 2.17(a), 2.18(a) and 2.18(b).
2.19 USE OF PROCEEDS.
(a) Borrowers shall utilize the proceeds of the Facility B Loan
solely for the financing of the acquisition, construction or improvement of
telecommunication asset or assets which are an integral part of a Network in a
Market or any assets (not including any leasehold improvements except those
leasehold improvements expended during the initial buildout of each switch site
and related off-site sales office) which are at all times located at a Site or
sales office in a Market; provided, however, that up to Twenty Million Dollars
($20,000,000) may be used for general corporate purposes other than as set forth
in this Section 2.19(a).
(b) Borrowers shall utilize the proceeds of the Facility A Loan for
working capital or general corporate purposes.
2.20 FEES.
(a) Borrower shall pay to Administrative Agent, for the ratable
benefit of Lenders, the fees described on Schedule 2.20 in connection with this
Agreement (the "Commitment Fees").
(b) Borrowers shall pay to GECC, individually, additional Fees, the
amount and dates of payment of which are embodied in a separate agreement
between Holdings and GECC (the "GECC Fee Letter").
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2.21 EXPENSES.
Borrowers shall (a) pay or reimburse Administrative Agent for all of its
reasonable costs, fees, charges and expenses incurred or arising in connection
with the negotiation, review, preparation and execution of this Agreement, the
Loan Documents, any commitment or proposal letter, or any amendment, supplement,
waiver, modification to, or restructuring of this Agreement, the Obligations or
the other Loan Documents, including reasonable legal fees and disbursements,
expenses, document charges and other charges and expenses of Administrative
Agent, (b) pay or reimburse such costs, fees, charges and expenses of each other
Lender party hereto as of the date hereof up to the sum of Ten Thousand Dollars
($10,000), (c) pay or reimburse Administrative Agent for all of their reasonable
costs, fees, charges and expenses incurred in connection with the administration
of the Loans and Administrative Agent and each Lender for the enforcement,
protection or preservation of any rights under or in connection with this
Agreement or any other Loan Documents, including reasonable legal fees and
disbursements, audit fees and charges, and all out-of-pocket expenses, (d) pay,
indemnify and hold Lenders harmless from any and all recording and filing fees
and taxes and any and all liabilities with respect to, or resulting from any
delay by any Loan Party in paying, stamp, excise and other taxes (excluding
income and franchise taxes and Taxes of similar nature), if any, which may be
payable or determined to be payable in connection with the execution and
delivery or recordation or filing of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement and the other Loan Documents.
All of the amounts described in this Section are referred to collectively as the
"Lenders' Expenses," shall be payable upon demand, and shall accrue interest at
the interest rate in effect when such demand is made from five (5) days after
the date of demand until paid in full. All Lenders' Expenses, and interest
thereon, shall be part of the Obligations and shall be secured by the
Collateral. The agreements in this Section 2.21 shall survive repayment of the
Obligations. All Lenders' Expenses that are outstanding on any Borrowing Date
shall be paid before or with such advance. If Borrower Representative has not
paid to Lenders the amount of all Lenders' Expenses billed to Borrowers at least
five (5) Business Days before such Borrowing Date, Lenders shall be authorized
to retain from any Advance on such Borrowing Date the amount of such Lenders'
Expenses that remain unpaid. Borrowers' obligation to pay Lenders' Expenses
shall not be limited by any limitation on the amount of the Commitment that may
be designated as available for such purposes, and any amounts so designated
shall be used to pay Lenders' Expenses accrued at the time of any Advance before
any of Borrowers' legal fees or similar expenses.
ARTICLE III
ASSIGNMENT AND PARTICIPATIONS;
APPOINTMENT OF ADMINISTRATIVE AGENT
3.1 ASSIGNMENT AND PARTICIPATIONS.
(a) The Loan Parties signatory hereto consent to any Lender's
assignment of, and/or sale of participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit
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Obligations and any Commitment or of any portion thereof or interest therein,
including any Lender's rights, title, interests, remedies, powers or duties
thereunder, whether evidenced by a writing or not. Any assignment by a Lender
shall (i) require the consent of Administrative Agent and Borrower
Representative (which, in the case of Borrower Representative, shall not be
unreasonably withheld or delayed); provided, however, that no consent of
Borrower Representative shall be required if an Event of Default shall have
occurred and be continuing and the execution of an assignment agreement (an
"Assignment Agreement") substantially in the form attached hereto as Exhibit H
and otherwise in form and substance satisfactory to, and acknowledged by,
Administrative Agent; (ii) be conditioned on such assignee Lender representing
to the assigning Lender and Administrative Agent that it is making the purchase
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) if a partial assignment, be in an amount at least
equal to $5,000,000, be of the same Pro Rata Share of Facility A Commitment and
Facility B Commitment and, after giving effect to any such partial assignment,
the assigning Lender shall have retained Commitments and Loans in an amount at
least equal to $5,000,000; and (iv) include a payment to Administrative Agent of
an assignment fee of $3,500 by the assigning Lender. The failure of Borrower
Representative to consent to an assignment to a Person that is or is an
Affiliate of a Person that is engaged in the telecommunications industry and is
a competitor of or supplier to any Loan Party shall not be deemed unreasonable.
In the case of an assignment by a Lender under this Section 3.1, the assignee
shall have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment will give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender." In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event any Lender
assigns or otherwise transfers all or any part of the Obligations, any such
Lender shall so notify Borrower Representative and Borrowers shall, upon the
request of Administrative Agent or such Lender, execute a new Note in exchange
for each Note, if any, or portion thereof being assigned. Notwithstanding the
foregoing provisions of this Section 3.1(a), any Lender may at any time pledge
the Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's rights
under this Agreement and the other Loan Documents to another investment fund
managed by the same investment advisor; provided, however, that no such pledge
to a Federal Reserve Bank shall release such Lender from such Lender's
obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in
34
accordance with the terms of this Agreement, the Collateral Documents or the
other Loan Documents). Solely for purposes of Sections 2.15, 2.17, 2.18 and 3.8,
each Borrower acknowledges and agrees that a participation shall give rise to a
direct obligation of Borrowers to the participant and the participant shall be
considered to be a "Lender." Except as set forth in the preceding sentence no
Borrower or Loan Party shall have any obligation or duty to any participant.
Neither Administrative Agent nor any Lender (other than Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 3.1, no Lender
shall, as between any Loan Party and that Lender, or Administrative Agent and
that Lender, be relieved of any of its obligations hereunder as a result of any
sale, assignment, transfer or negotiation of, or granting of participation in,
all or any part of the Loans, the Notes or other Obligations owed to such
Lender.
(d) Each Loan Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this Section 3.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Administrative Agent, the preparation of informational materials
for, and the participation of management in meetings with, potential assignees
or participants. Each Loan Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of such Loan Parties
and its affairs contained in any selling materials provided by it and all other
information provided by it and included in such materials, except that any
Projections delivered by such Loan Party shall only be certified by such Loan
Party as having been prepared by it in compliance with the representations
contained in Section 5.10.
(e) A Lender may furnish any information concerning Loan Parties in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). Each Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in Section 12.16.
(f) So long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 2.18(a),
increased costs under Section 2.18(b), an inability to fund LIBOR Loans under
Section 2.18(c), or withholding taxes in accordance with Section 2.17(a).
3.2 APPOINTMENT OF ADMINISTRATIVE AGENT.
GECC is hereby appointed to act on behalf of all Lenders as Administrative
Agent under this Agreement and the other Loan Documents. The provisions of this
Section 3.2 are solely for the benefit of Administrative Agent and Lenders and
no Loan Party nor any other Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, Administrative Agent
shall act
35
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for any Loan Party or any other Person. Administrative Agent shall have no
duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of Administrative Agent shall
be mechanical and administrative in nature and Administrative Agent shall not
have, or be deemed to have, by reason of this Agreement, any other Loan Document
or otherwise a fiduciary relationship in respect of any Lender. Neither
Administrative Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If Administrative Agent shall request instructions from Requisite Lenders
or all affected Lenders with respect to any act or action (including failure to
act) in connection with this Agreement or any other Loan Document, then
Administrative Agent shall be entitled to refrain from such act or taking such
action unless and until Administrative Agent shall have received instructions
from Requisite Lenders or all affected Lenders, as the case may be, and
Administrative Agent shall not incur liability to any Person by reason of so
refraining. Administrative Agent shall be fully justified in failing or refusing
to take any action hereunder or under any other Loan Document (a) if such action
would, in the opinion of Administrative Agent, be contrary to law or the terms
of this Agreement or any other Loan Document, (b) if such action would, in the
opinion of Administrative Agent, expose Administrative Agent to Environmental
Liabilities or (c) if Administrative Agent shall not first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or refraining
from acting hereunder or under any other Loan Document in accordance with the
instructions of Requisite Lenders or all affected Lenders, as applicable.
3.3 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
Neither Administrative Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Loan Documents, except for damages caused by its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent: (a) may treat the payee of
any Note as the holder thereof until Administrative Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to Administrative Agent; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Loan Party or to
36
inspect the Collateral (including the books and records) of any Loan Party; (e)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
3.4 GECC AND AFFILIATES.
With respect to its Commitments hereunder, GECC shall have the same rights
and powers under this Agreement and the other Loan Documents as any other Lender
and may exercise the same as though it were not Administrative Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
GECC in its individual capacity. GECC and its Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Loan Party,
any of their Affiliates and any Person who may do business with or own
securities of any Loan Party or any such Affiliate, all as if GECC were not
Administrative Agent and without any duty to account therefor to Lenders. GECC
and its Affiliates may accept fees and other consideration from any Loan Party
for services in connection with this Agreement or otherwise without having to
account for the same to Lenders. Each Lender acknowledges the potential conflict
of interest between GECC as a Lender holding disproportionate interests in the
Loans and GECC as Administrative Agent.
3.5 LENDER CREDIT DECISION.
Each Lender acknowledges that it has, independently and without reliance
upon Administrative Agent or any other Lender and based on the Financial
Statements referred to in Section 5.10 and such other documents and information
as it has deemed appropriate, made its own credit and financial analysis of the
Loan Parties and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
3.6 INDEMNIFICATION.
Lenders agree to indemnify Administrative Agent (to the extent
Administrative Agent is not reimbursed by Loan Parties and without limiting the
obligations of Loan Parties hereunder), ratably according to their respective
Pro Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Agent in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by
Administrative Agent in connection therewith; provided, however, that
37
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Administrative Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by Administrative Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Administrative Agent is not reimbursed for such expenses by Loan
Parties.
3.7 SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving not less than thirty
(30) days' prior written notice thereof to Lenders and Borrower Representative.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Requisite Lenders and shall have accepted such
appointment within thirty (30) days after the resigning Administrative Agent's
giving notice of resignation, then the resigning Administrative Agent may, on
behalf of Lenders, appoint a successor Administrative Agent, which shall be a
Lender, if a Lender is willing to accept such appointment, or otherwise shall be
a commercial bank or financial institution or a subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing by the 30th
day after the date such notice of resignation was given by the resigning
Administrative Agent, such resignation shall become effective and the Requisite
Lenders shall thereafter perform all the duties of Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above. Any successor Administrative Agent
appointed by the Requisite Lenders hereunder shall be subject to the approval of
Borrower Representative, such approval not to be unreasonably withheld or
delayed; provided, however, that such approval shall not be required if a
Default or Event of Default shall have occurred and be continuing. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Administrative Agent. Upon the earlier of the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent or the effective date of the resigning Administrative Agent's resignation,
the resigning Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Administrative Agent
shall continue. After any resigning Administrative Agent's resignation
hereunder, the provisions of this Section 3.7 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement and the other Loan Documents.
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3.8 SET OFF AND SHARING OF PAYMENTS.
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 and during
the continuance of any Event of Default, each Lender and each holder of any Note
and each of their respective Affiliates is hereby authorized at any time or from
time to time, without notice to any Loan Party or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all balances held by it at any of its offices for the account of any
Borrower or Guarantor (regardless of whether such balances are then due to such
Borrower or Guarantor) and any other properties or assets at any time held or
owing by that Lender, that holder or that Affiliate to or for the credit or for
the account of any Borrower or Guarantor against and on account of any of the
Obligations which are not paid when due. Any Lender or holder of any Note or any
Affiliate of either exercising a right to set off or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share of the
Obligations shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata Share
of the Obligations as would be necessary to cause such Lender or holder to share
the amount so set off or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares. Each Loan Party agrees, to the
fullest extent permitted by law, that (a) any Lender or holder may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holder so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the set
off amount or payment otherwise received is thereafter recovered from Lender,
holder or Affiliate that has exercised the right of set off, the purchase of
participations by that Lender shall be rescinded and the purchase price restored
without interest.
3.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.
(a) Advances; Payments.
(i) Administrative Agent shall notify Lenders, promptly after
receipt of a Borrowing Certificate and in any event prior to 3:00 p.m. (New York
time) on the date such Borrowing Certificate is received, by telecopy, telephone
or other similar form of transmission. Each Lender shall make the amount of such
Lender's Pro Rata Share of such Advance available to Administrative Agent in
same day funds by wire transfer to Administrative Agent's account as set forth
in Schedule 3.9 not later than 3:00 p.m. (New York time) on the requested
funding date in the case of a Base Rate Loan and not later than 11:00 a.m. (New
York time) on the requested funding date in the case of a LIBOR Loan. After
receipt of such wire transfers (or, in Administrative Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof,
Administrative Agent shall make the requested Advance to Borrower Representative
to the account of Borrower Representative specified on Schedule 3.9. All
payments by each Lender shall be made without set off, counterclaim or deduction
of any kind.
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(ii) All Payments due hereunder and under the Notes shall be
made to Administrative Agent by wire transfer to the account specified on
Schedule 3.9 no later than 1:00 p.m. (New York time) on the date due. Payments
received after such time shall be deemed to have been made on the next Business
Day. On each Business Day that Administrative Agent receives a payment with
respect to the Loans, Administrative Agent will advise each Lender by telephone
or telecopy of the amount of such Lender's Pro Rata Share of principal, interest
and Fees paid for the benefit of Lenders with respect to each applicable Loan.
Provided that such Lender has funded all payments or Advances required to be
made by it and has purchased all participations required to be purchased by it
under this Agreement and the other Loan Documents as of such date,
Administrative Agent will pay to each Lender such Lender's Pro Rata Share of
such payment. To the extent that any Lender (a "Non-Funding Lender") has failed
to fund all such payments and Advances or failed to fund the purchase of all
such participations, Administrative Agent shall be entitled to set off the
funding short-fall against that Non-Funding Lender's Pro Rata Share of all
payments received from Borrowers. Such payments shall be made by wire transfer
to such Lender's account (as specified by such Lender in Schedule 3.9 or the
applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on the
next Business Day following receipt.
(b) Availability of Lender's Pro Rata Share. Administrative Agent
may assume that each Lender will make its Pro Rata Share of each Advance
available to Administrative Agent on each funding date. If such Pro Rata Share
is not, in fact, paid to Administrative Agent by such Lender when due,
Administrative Agent will be entitled to recover such amount on demand from such
Lender without set off, counterclaim or deduction of any kind. If any Lender
fails to pay the amount of its Pro Rata Share forthwith upon Administrative
Agent's demand, Administrative Agent shall promptly notify Borrower
Representative and Borrowers shall immediately repay such amount to
Administrative Agent. Nothing in this Section 3.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Administrative
Agent to advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that
any Loan Party may have against any Lender as a result of any default by such
Lender hereunder. To the extent that Administrative Agent advances funds to
Borrowers on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Administrative Agent shall be entitled to
retain for its account all interest accrued on such Advance until reimbursed by
the applicable Lender.
(c) Return of Payments.
(i) If Administrative Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Administrative Agent from Borrowers and such related payment
is not received by Administrative Agent, then Administrative Agent will be
entitled to recover such amount from such Lender on demand without set off,
counterclaim or deduction of any kind.
(ii) If Administrative Agent determines at any time that any
amount received by Administrative Agent under this Agreement must be returned to
any Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other
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term or condition of this Agreement or any other Loan Document, Administrative
Agent will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Administrative Agent on demand any portion
of such amount that Administrative Agent has distributed to such Lender,
together with interest at such rate, if any, as Administrative Agent is required
to pay to Borrowers or such other Person, without set off, counterclaim or
deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Advance or any payment required by it hereunder shall not relieve any
other Lender (each such other Lender, an "Other Lender") of its obligations to
make such Advance, but neither any Other Lender nor Administrative Agent shall
be responsible for the failure of any Non-Funding Lender to make an Advance or
to purchase a participation required hereunder. Notwithstanding anything set
forth herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" (or be included in the calculation of "Requisite Lenders" hereunder)
for any voting or consent rights under or with respect to any Loan Document.
(e) Dissemination of Information. Administrative Agent will use
reasonable efforts to provide Lenders with any notice of an Event of Default
received by Administrative Agent from, or delivered by Administrative Agent to,
any Loan Party, with notice of any Event of Default of which Administrative
Agent has actually become aware and with notice of any action taken by
Administrative Agent following any Event of Default; provided, however, that
Administrative Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to Administrative Agent's
gross negligence or willful misconduct. Lenders acknowledge that each Loan Party
is required to provide Financial Statements and Collateral Reports to Lenders
hereunder and agrees that Administrative Agent shall have no duty to provide the
same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of set off) without
first obtaining the prior written consent of Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Administrative Agent.
3.10 SYNDICATION AGENT.
The Syndication Agent shall have no duties, responsibilities or
obligations under this Agreement.
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ARTICLE IV
COLLATERAL AND SECURITY AGREEMENT
4.1 GRANT OF SECURITY INTEREST.
To secure the prompt and complete payment, performance and observance of
all of the Obligations (specifically including each Loan Party's Obligations
arising under the provisions of Article 10), each Loan Party hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to
Administrative Agent, for itself and the benefit of Lenders, a continuing Lien
upon all of such Loan Party's right, title and interest in and to the following
kinds and types of property, whether now owned or hereafter acquired or arising,
wherever located, together with all substitutions therefor and all accessions,
replacements and renewals thereof, and in all proceeds and products thereof
(collectively, the "Collateral"):
(a) all existing and future accounts, accounts receivable and rights
to payment and (i) all accounts receivable created by or arising from all sales
or leases of goods or rendition of services by such Loan Party to its customers
or subscribers; (ii) all unpaid seller's rights (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom; (iii) all rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (iv) all reserves and credit balances
arising from any of the foregoing; (v) all guarantees or collateral for any of
the foregoing; and (vi) all insurance policies or rights relating to any of the
foregoing (collectively, "Accounts");
(b) all existing and future instruments, chattel paper, documents of
title, securities, contracts, agreements, licenses, easements, grants and rights
now or hereafter entered into or acquired by such Loan Party, as modified,
replaced or supplemented from time to time, including (i) all capacity usage
agreements and other agreements with carriers, customers or subscribers which
constitute five percent (5%) or more of such Loan Party's revenues, (ii) all
purchase agreements and supply agreements and related warranty rights, (iii) all
operating agreements, (iv) all interconnection agreements, (v) all other System
Agreements and (vi) all insurance policies (collectively, "Contracts");
(c) all equipment, furniture and fixtures, switches, towers,
electronics, transmitting equipment, software, cabling, hardware, devices and
components now or hereafter owned by such Loan Party, and any and all additions,
substitutions and replacements to or of any of the foregoing, together with all
attachments, components, parts, improvements, upgrades and accessions installed
thereon or affixed thereto (collectively, "Equipment");
(d) all general intangibles and intangible property, including
rights under Contracts, rights to payment of any kind, insurance proceeds and
amounts due under insurance policies, deposit accounts, patent rights,
trademarks, service marks, copyrights, trade names, customer lists, goodwill,
registrations, licenses, license rights, rights in intellectual property,
software, software licenses, computer programming (including source codes,
object codes and all
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other embodiments of computer programming or information), tax refunds and
benefits, corporate and other business records, refunds and indemnification
rights, all amounts owed at any time to such Loan Party (to the extent permitted
by applicable law in effect at any time and subject to Section 4.2), all rights
that such Loan Party may have at any time in any Regulatory Authorization,
including any rights to payment upon any transfer of any Regulatory
Authorization, or any other transfer or transaction intended to result in a
transfer of such a Regulatory Authorization, or the obtaining of FCC or PUC
authority for another Person to operate a telecommunications system in the area
instead of such Loan Party, all rights to receive payment or property upon any
assignment, transfer, sale or surrender of any other Collateral and all other
intangible personal property of such Loan Party of every kind and nature
(collectively, "General Intangibles");
(e) all merchandise, inventory and goods now or hereafter owned by
such Loan Party, together with all goods and materials used or usable in
manufacturing, processing, packaging or shipping such merchandise, inventory and
goods in all states of production, from raw materials through work-in-progress
to finished goods (collectively, "Inventory"); and
(f) all proceeds and products of any of the foregoing, including (i)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to such Loan Party from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable to such
Loan Party from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of any other Collateral
by any Governmental Authority (or any Person acting under color of governmental
authority), (iii) any and all other amounts from time to time paid or payable
under or in connection with any other Collateral and (iv) any and all cash
proceeds and non-cash proceeds in the form of Equipment, Inventory, Contracts,
Accounts, General Intangibles, chattel paper, documents, instruments, securities
or other proceeds (collectively, "Proceeds").
4.2 REGULATORY AUTHORIZATIONS.
Administrative Agent and each Lender acknowledge and recognize that each
Loan Party's assignment of or grant of a security interest in its Regulatory
Authorizations may be subject to restrictions imposed by the FCC or PUC on such
Loan Party's ability to assign its interest in or transfer control of any
Regulatory Authorizations. Likewise, Administrative Agent and each Lender
acknowledge and recognize that each Loan Party's assignment of or grant of a
security interest in any state or local franchises or licenses may be subject to
similar government restrictions. Each Loan Party acknowledges, however, that the
value of the Regulatory Authorizations is a critical part of the Collateral
package, and agrees to use its best efforts to effect the transfer of such
Regulatory Authorizations to Administrative Agent, on behalf of Lenders, or its
designee upon the occurrence of an Event of Default.
4.3 PRIORITY OF SECURITY INTERESTS.
The security interests granted in Section 4.1 by each Loan Party to
Administrative Agent on behalf of Secured Parties are and shall be continuing
and indefeasible first-priority security interests in the Collateral which may
be perfected by filing under the UCC, subject to no Liens except for
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Liens permitted under Section 9.2, except that Administrative Agent's Lien on
certain Equipment consisting of one switch owned by US LEC of North Carolina
Inc. temporarily located in Alabama is not perfected.
4.4 PLEDGE AGREEMENTS.
Each Loan Party hereby represents and warrants that valid, first-priority
security interests have been granted by Holdings to Administrative Agent, on
behalf of Secured Parties, pursuant to the Holdings Pledge Agreement, in 100%
(or at least 99% in the case of US LEC of Virginia L.L.C.) of the Stock of each
Borrower and 100% of the Stock of US LEC of Georgia Inc., together with an
irrevocable proxy to vote such Stock if an Event of Default should occur, and
that all existing stock certificates, warrants and other instruments evidencing
ownership, together with executed blank stock powers, have been delivered to
Administrative Agent on behalf of Secured Parties. Holdings shall also grant to
Administrative Agent on behalf of Secured Parties valid, first-priority security
interests in 100% (or at least 99% in the case of US LEC of Virginia L.L.C.) of
the Stock of all other present or future Subsidiaries of Holdings having assets
in excess of $100,000 and an irrevocable proxy to vote such Stock if an Event of
Default should occur.
4.5 FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS.
At any time and from time to time, upon the written request of
Administrative Agent or Requisite Lenders, and at the sole expense of the Loan
Parties, each Loan Party shall promptly execute, deliver and record any
documents, instruments, agreements and amendments, and take all such further
action, as Administrative Agent or Requisite Lenders may reasonably deem
desirable in obtaining the full benefits of this Agreement and of the rights and
powers herein granted, including the filing of any financing statements or
amendments under the UCC. Each Loan Party also hereby authorizes Administrative
Agent to file any such financing statement or amendment thereto, without the
signature of such Loan Party, or with a copy or telecopy of such Loan Party's
signature, to the extent permitted by applicable law, or to execute any
financing statement or amendment thereof on behalf of such Loan Party as such
Loan Party's attorney-in-fact. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any promissory note or
other instrument or any certificated securities, such note, instrument or
certificate shall be immediately pledged and delivered to Administrative Agent
on behalf of Secured Parties hereunder, duly endorsed in a manner satisfactory
to Administrative Agent or Requisite Lenders. Each Loan Party shall keep and
maintain, at its own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Each Loan Party shall ▇▇▇▇ its books and records pertaining to the
Collateral to evidence this Agreement and the Liens granted hereby. All chattel
paper shall be marked with the following legend: "This writing and the
obligations evidenced or secured hereby are subject to the security interest of
General Electric Capital Corporation, as Administrative Agent, for the benefit
of Administrative Agent and Lenders."
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4.6 ACCOUNTS, ETC.
Each Loan Party shall be entitled to collect any Accounts and General
Intangibles until the occurrence of an Event of Default, during the continuance
of which Administrative Agent or Requisite Lenders may restrict or terminate
such authority. Each Loan Party agrees that, upon the occurrence of an Event of
Default, Administrative Agent on behalf of Secured Parties shall be entitled to
assume any or all of the Contracts, Accounts or General Intangibles in the place
of such Loan Party (without releasing such Loan Party from liability
thereunder).
4.7 FURTHER IDENTIFICATION OF COLLATERAL.
Each Loan Party shall furnish to Administrative Agent on behalf of Secured
Parties from time to time statements and schedules further identifying and
describing the Collateral and each location thereof and such other reports in
connection with the Collateral as Administrative Agent or Requisite Lenders may
reasonably request, all in reasonable detail.
4.8 REMEDIES.
Administrative Agent on behalf of Secured Parties shall have all the
rights and remedies of a secured party under the UCC, and shall be entitled to
exercise any and all remedies available under this Article 4 or Article 10 or
otherwise available at law or in equity upon the occurrence of an Event of
Default. Except as otherwise specifically provided herein, each Loan Party
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Agreement or
any Collateral.
4.9 STANDARD OF CARE.
Administrative Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral in its possession if it
takes such action for that purpose as Borrower Representative requests in
writing, but Administrative Agent's failure to comply with any such request
shall not of itself be deemed a failure to exercise reasonable care, and no
failure of Administrative Agent to preserve or protect any rights with respect
to such Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by Borrower Representative,
shall be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.
4.10 ADVANCES TO PROTECT COLLATERAL.
All insurance expense and all expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral
(including all rent payable by any Loan Party to any landlord of any premises
where any of the Collateral may be located) and any and all Taxes shall be borne
and paid by such Loan Party. Administrative Agent on behalf of Secured Parties
may (but shall not be obligated to) make advances to preserve, protect or obtain
any of the Collateral, including advances to cure defaults under any of the
Contracts or advances to pay Taxes, insurance and the like, and all such
advances shall become part of the Obligations owing to Lenders
45
hereunder and shall be payable to Administrative Agent on demand, with interest
thereon from the date of such advance until paid at the Default Rate applicable
to Base Rate Loans in effect on the date of such advance.
4.11 LICENSE TO USE.
Administrative Agent on behalf of Secured Parties is hereby granted a
non-exclusive license or other right to use without charge during the
continuance of an Event of Default any Loan Party's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any tangible or intangible property or rights of a
similar nature, as they pertain to the Collateral, in advertising for sale and
selling any Collateral, and such Loan Party's rights under all licenses and all
franchise agreements shall inure to the benefit of Administrative Agent on
behalf of Secured Parties.
4.12 BENEFIT OF LENDERS.
All Liens granted or contemplated hereby shall be for the benefit of
Administrative Agent and Lenders, and all Proceeds or payments realized from the
Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms provided herein.
4.13 RELEASE OF COLLATERAL.
Upon any sale of assets permitted herein and application of the proceeds
as required by Section 2.10, the Liens granted by Loan Parties to Administrative
Agent for the benefit of Secured Parties shall be released and Administrative
Agent shall, upon request of Borrower Representative, execute and deliver to
Borrower Representative appropriate executed UCC-3s confirming such release.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby represents and warrants, jointly and severally, to
Administrative Agent and each Lender, with respect to all Loan Parties, as
follows:
5.1 ORGANIZATION AND QUALIFICATION.
Each Loan Party is duly organized, validly existing and in good standing
under the laws of its state of organization. Each Loan Party is duly qualified
to do business and in good standing in each jurisdiction in which the failure to
receive or retain such qualification could reasonably be expected to have a
Material Adverse Effect. As to any Loan Party that is a limited liability
company, each manager is duly organized, validly existing, in good standing
under the laws of its state of organization, and duly qualified to do business
and in good standing in each jurisdiction in
46
which the failure to receive or retain such qualification could reasonably be
expected to have a Material Adverse Effect.
5.2 AUTHORITY AND AUTHORIZATION.
Each Loan Party has all requisite corporate or limited liability company
right, power, authority and legal right to carry on its business, to own or
lease its properties and to execute and deliver and perform its obligations
under this Agreement, to make the borrowings provided for herein, and to execute
and deliver and to perform its obligations under the Loan Documents. Each Loan
Party's execution, delivery and performance of the Loan Documents have been duly
and validly authorized by all necessary corporate or limited liability company
proceedings on the part of each Loan Party and the manager of any Loan Party
that is a limited liability company.
5.3 EXECUTION AND BINDING EFFECT.
This Agreement, the Notes and all other Loan Documents have been or will
be duly and validly executed and delivered by each Loan Party, and constitute
or, when executed and delivered, will constitute, the legal, valid and binding
obligations of such Loan Party enforceable in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting creditors'
rights generally.
5.4 GOVERNMENTAL AUTHORIZATIONS.
Except for the consents identified on Schedule 5.4 (the "Required
Consents"), no authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declaration or
filing with, any Governmental Authority (other than the filing of financing
statements and continuation statements) is or will be necessary in connection
with the execution and delivery of this Agreement, the Notes or any other Loan
Documents by each Loan Party, consummation by each Loan Party of the
transactions herein or therein contemplated, including obtaining the Loans and
granting security for the Obligations, performance of or compliance by each Loan
Party with the terms and conditions hereof or thereof or the legality, validity
and enforceability hereof or thereof.
5.5 REGULATORY AUTHORIZATIONS.
Loan Parties hold all authorizations, permits and licenses required by the
FCC or the PUC or any Communications Law for the conduct of their business as
now conducted and as proposed in the Business Plan to be conducted, and all such
Regulatory Authorizations are in full force and effect, are subject to no
further administrative or judicial review and are therefore final. No Lender, by
reason of the execution, delivery and performance (other than the enforcement of
remedies) of any of the Loan Documents, will be subject to the regulation or
control of either the FCC or the PUC. The Regulatory Authorizations are
described on Schedule 5.5.
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5.6 AGREEMENTS AND OTHER DOCUMENTS.
As of the date hereof, each Loan Party has provided to Lenders, accurate
and complete copies (or summaries) of all of the following agreements or
documents to which such Loan Party is subject and each of which is listed on
Schedule 5.6: (a) supply agreements and purchase agreements not terminable by
such Loan Party within sixty (60) days following written notice issued by such
Loan Party and involving transactions in excess of $1,000,000 per annum; (b) any
lease of Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $500,000 per annum; (c)
licenses and permits held by such Loan Party, the absence of which could be
reasonably likely to have a Material Adverse Effect; (d) instruments or
documents evidencing Indebtedness of such Loan Party and any security interest
granted by such Loan Party with respect thereto; and (e) instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of a Borrower.
5.7 ABSENCE OF CONFLICTS.
The execution and delivery of this Agreement, the Notes and the other Loan
Documents, the consummation of the transactions herein or therein contemplated
and the performance of or compliance with the terms and conditions hereof or
thereof by each Loan Party will not (a) violate any applicable Law; (b) conflict
with or result in a breach of or a default under the Organizational Documents of
such Loan Party or any material agreement or instrument to which such Loan Party
is a party or by which such Loan Party or its properties are bound; or (c)
result in the creation or imposition of any Lien upon any property (now owned or
hereafter acquired) of such Loan Party except as otherwise contemplated by this
Agreement.
5.8 NO RESTRICTIONS.
No Loan Party is a party or subject to any contract, agreement or
restriction in its Organizational Documents that materially and adversely
affects its business or the use or ownership of any of its properties or
operation of its business as contemplated in its Business Plan. The Loan
Parties' strategy is to deploy owned switching equipment and to lease
transmission capacity from others. No Loan Party is a party or subject to any
contract or agreement which restricts its right or ability to incur
Indebtedness, other than as set forth on Schedule 5.8, none of which prohibits
such Loan Party's execution of or compliance with this Agreement. No Loan Party
has agreed or consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of the Collateral, whether now owned or
hereafter acquired, to be subject to a Lien that is not a Permitted Encumbrance.
5.9 GOVERNMENT CONTRACTS.
Except as set forth in Schedule 5.9, as of the date hereof, no Loan Party
is a party to any contract or agreement with any Governmental Authority and no
Loan Party's Accounts are subject to the Federal Assignment of Claims Act, as
amended (31 U.S.C. ss. 3727) or any similar state or local law.
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5.10 FINANCIAL STATEMENTS; BUSINESS PLAN.
Borrower Representative has furnished to Lenders the most recent annual or
quarterly Financial Statements of Holdings, certified by a Responsible Officer
of Holdings, including balance sheets and related statements of income, retained
earnings and cash flow, as described on Schedule 5.10. Such Financial Statements
(including the notes thereto) present fairly the financial condition of Loan
Parties on a consolidated basis as of the end of such fiscal period and the
results of its operations and the changes in its financial position for the
fiscal period then ended, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal period. As of the date hereof, no
Loan Party has any obligation or liability (absolute, contingent, liquidated or
unliquidated) material to Loan Parties taken as a whole, which are required to
be disclosed in financial statements prepared in accordance with GAAP, except
for those reflected in the Financial Statements discussed on Schedule 5.10, and
since the date hereof has incurred no such obligation or liability, except as
permitted by this Agreement. The projections and pro forma financial statements
delivered by Borrower Representative to Administrative Agent, on behalf of
Lenders, as part of the Business Plan, a copy of which has been delivered prior
to the date hereof, were prepared in good faith, based on reasonable
assumptions.
5.11 FINANCIAL ACCOUNTING PRACTICES.
Loan Parties have made and kept books, records and accounts which, in
reasonable detail, accurately and fairly reflect their respective transactions
and dispositions of their assets, and Loan Parties maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
5.12 DEPOSIT AND DISBURSEMENT ACCOUNTS.
Schedule 5.12 lists all banks and other financial institutions at which
any Loan Party maintains deposits and/or other accounts as of the date hereof,
including any disbursement accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number.
5.13 INSURANCE.
Schedule 5.13 lists all insurance policies of any nature maintained, as of
the date hereof, for current occurrences by each Loan Party, as well as a
summary of the terms of each such policy.
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5.14 ACCURATE AND COMPLETE DISCLOSURE.
No representation or warranty made by any Loan Party in this Agreement or
any other Loan Document and no statement made by any Loan Party in any financial
statement, certificate, report, exhibit or document furnished by such Loan Party
to Administrative Agent pursuant to or in connection with this Agreement
(including any filings with the Securities and Exchange Commission, the FCC or
the PUC) is or was 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). There are no facts that
would reasonably be expected to evidence or create a Material Adverse Effect
which have not been set forth in the Financial Statements referred to in Section
5.10 or otherwise disclosed in writing to Administrative Agent and Lenders prior
to the First Borrowing Date.
5.15 NO EVENT OF DEFAULT; COMPLIANCE WITH MATERIAL AGREEMENTS.
No event has occurred and is continuing and no condition exists which
constitutes a Default or an Event of Default. As of the date hereof, no Loan
Party is in violation of any term of any material agreement or instrument to
which it is a party or by which it or its properties are bound that would
reasonably be expected to have a Material Adverse Effect.
5.16 LABOR MATTERS.
As of the date hereof, (a) no strikes or other material labor disputes
against any Loan Party are pending or, to any Loan Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Loan Party
comply with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matter; (c) all payments due from any Loan Party
for employee health and welfare insurance have been paid or accrued as a
liability on the books of such Loan Party; (d) except as set forth in Schedule
5.16, no Loan Party is a party to or bound by any collective bargaining
agreement, management agreement, consulting agreement or any employment
agreement (and true and complete copies of any agreements described on Schedule
5.16 have been delivered to Administrative Agent and each Lender); (e) there is
no organizing activity involving any Loan Party pending or, to any Loan Party's
knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Loan Party's knowledge, threatened
with the National Labor Relations Board, and no labor organization or group of
employees of any Loan Party has made a pending demand for recognition; and (g)
except as set forth in Schedule 5.16, there are no complaints or charges against
any Loan Party pending or, to the knowledge of the executive officers of
Holdings, threatened to be filed with any Governmental Authority or arbitrator
based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Loan Party of any individual
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect.
5.17 LITIGATION.
Except as set forth in Schedule 5.17, there is no pending action, suit or
threatened proceeding by or before any Governmental Authority against or
affecting any Loan Party or any of
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its properties, rights or licenses which if adversely decided could reasonably
be expected to have a Material Adverse Effect.
5.18 RIGHTS TO PROPERTY.
Each Loan Party has good and marketable title, subject only to the
Permitted Encumbrances, to the Collateral, to all other personal and real
property purported to be owned by it and to all property reflected in the most
recent balance sheet referred to in Section 5.10 (except as sold or otherwise
disposed of in the ordinary course of business as no longer used or useful in
the conduct of the business). Schedule 5.18 lists as of the date hereof (i) all
Sites and Site Leases, (ii) all other real property owned by each Loan Party,
and (iii) all material Equipment of each Loan Party and its location or proposed
location. Each Loan Party has, or by the First Borrowing Date shall have,
entered into the Site Leases described on Schedule 5.18. Such Site Leases are in
full force and effect and are not subject to termination because of default or
otherwise.
5.19 YEAR 2000 PROBLEM.
Each Loan Party has a plan and organization in place to minimize any
materially adverse effects on its business operations caused by the failure of
any system or equipment which is material to such Loan Party's operations to be
Year 2000 Compliant. "Year 2000 Compliant" means that the functionality and the
performance of any such system or equipment will not be adversely affected as a
result of the date change from the calendar year 1999 to the calendar year 2000,
including leap year calculations, and that, to the extent applicable to such
system's or equipment's normal operation specifications, such system or
equipment will accurately accept, store, retrieve, calculate, compare and
otherwise process dates before and after January 1, 2000. Each Loan Party is
conscientiously implementing such plan. Each Loan Party will, upon request from
Administrative Agent, on behalf of Lenders, or from Requisite Lenders, provide
Administrative Agent or, if so requested, Lenders with periodic updates on its
implementation of such plan.
5.20 TAXES.
Each Loan Party's federal tax identification number is set forth on
Schedule 1. All tax returns required to be filed by each Loan Party have been
properly prepared, executed and filed, and all Taxes upon such Loan Party or
upon any of its respective properties, incomes, sales or franchises which are
shown to be due and payable thereon have been paid, other than Taxes or
assessments the validity or amount of which such Loan Party is contesting in
good faith. The reserves and provisions for taxes on the books of each Loan
Party are adequate for all open years and for its current fiscal period.
5.21 NO MATERIAL ADVERSE CHANGE.
Since the date of the Financial Statements referenced in Section 5.10,
there has been no Material Adverse Change.
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5.22 SOLVENCY.
Both before and after giving effect to (a) the Advances and Letter of
Credit Obligations to be made or extended on the date hereof or such other date
as the Advances and Letter of Credit Obligations requested hereunder are made or
extended, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrower Representative and (c) the payment and accrual of all
transaction costs in connection with the foregoing, Loan Parties, taken as a
whole, are Solvent.
5.23 NO REGULATORY EVENT.
No Regulatory Event has occurred and is continuing.
5.24 TRADE RELATIONS.
There exists no actual or threatened termination, cancellation or
limitation of, or any modification or change in, the business relationship
between any Loan Party and any customer or supplier that could reasonably be
expected to have a Material Adverse Effect or to prevent Loan Parties from
conducting their business after the consummation of the financing contemplated
by this Agreement in substantially the same manner as is contemplated in the
Business Plan.
5.25 NO BROKERAGE FEES.
No brokerage or other fee, commission or compensation is to be paid by any
Loan Party to any Person in connection with the Loans to be made hereunder
except as contemplated herein. Each Loan Party jointly and severally hereby
indemnifies each Indemnified Person against any claims brought against such
Indemnified Person for brokerage fees or commissions of any Person based on an
agreement with such Loan Party and agrees to pay all expenses incurred by such
Indemnified Person in connection with the defense of any action or proceeding
brought to collect any such brokerage fees or commissions.
5.26 MARGIN STOCK; REGULATION U.
No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock. The making of the Advances and the use of the proceeds
thereof will not violate Regulation U or X of the Board of Governors of the
Federal Reserve System.
5.27 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY.
No Loan Party is an "investment company" or a "company controlled by an
investment company" or an "affiliated person" or "promoter" or "principal
underwriter" for, an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
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5.28 PERSONAL HOLDING COMPANY; SUBCHAPTER S.
No Loan Party is a "personal holding company" as defined in Section 542 of
the Code, or a "Subchapter S" corporation within the meaning of the Code.
5.29 SECURITIES ACT, ETC.
The Notes are not required to be registered under the Securities Act of
1933, as amended, or under the securities laws of any state.
5.30 ERISA.
(i) With respect to any Plan, there is no Reportable Event
currently under consideration by the PBGC which may reasonably result in any
material liability to the PBGC with respect to any Plan, (ii) no Plan has been
terminated, (iii) no trustee has been appointed by any United States District
Court to administer any Plan, (iv) the PBGC has not instituted proceedings to
terminate any Plan or to appoint a trustee to administer any such Plan, (v) no
Loan Party or Affiliate of a Loan Party has withdrawn, completely or partially,
from any Plan and (vi) no Loan Party or Affiliate of a Loan Party has incurred
secondary liability for withdrawal liability payments under any Plan.
5.31 INTELLECTUAL PROPERTY.
Each Loan Party owns or possesses the right to use all patents,
trademarks, service marks, trade names, copyrights, know-how, franchises,
Software and Software Licenses necessary for the operation of its business, free
from burdensome restrictions that could reasonably be expected to have a
Material Adverse Effect. All such rights are described on Schedule 5.31.
5.32 ENVIRONMENTAL WARRANTIES.
Each Loan Party is in compliance with all Environmental Laws applicable to
such Loan Party or its business or to the real or personal property owned,
leased or operated by such Loan Party, except for such non-compliances as in the
aggregate could not reasonably be expected to have a Material Adverse Effect. No
Loan Party has received notice of, or is aware of, any violation or alleged
violation, or any liability or asserted liability, under any Environmental Law,
with respect to such Loan Party or its business or its premises. The only
premises occupied by any Loan Party are office spaces in multi-tenant commercial
office buildings.
5.33 SECURITY INTERESTS.
The provisions of Article 4 are effective to create in favor of
Administrative Agent, on behalf of Secured Parties, a legal, valid and
enforceable Lien on or security interest in all of the Collateral, and, when the
recordings and filings described on Schedule 5.33 have been effected in the
public offices listed on said Schedule 5.33, this Agreement will create a
perfected first priority
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security interest in all right, title, estate and interest of each Loan Party in
the Collateral which may be perfected by filing, subject to no Liens except for
Permitted Encumbrances. All action necessary or desirable to protect and perfect
such security interest in each item of the Collateral will have been duly taken
prior to the First Borrowing Date. The recordings and filings shown on said
Schedule 5.33 are all the actions necessary or advisable in order to establish,
protect and perfect the interest of Administrative Agent, on behalf of Secured
Parties, in the Collateral.
5.34 PLACE OF BUSINESS.
The chief executive office of each Loan Party is identified on Schedule
5.34. Each Loan Party's principal place of business in the state(s) where a Site
is located is identified on Schedule 5.34. Each Loan Party's records concerning
the Collateral are kept at one or both of these addresses.
5.35 LOCATION OF COLLATERAL.
The Collateral is and will be kept at the locations identified by Loan
Party and type of Collateral on Schedule 5.35 or such other locations as may be
permitted under Section 9.4.
5.36 VALIDITY OF CONTRACTS AND ACCOUNTS.
Each Contract, General Intangible and Account is, or will be when it is
created, a bona fide, valid and legally enforceable property or right of a Loan
Party and, so far as such Loan Party knows, of any other party thereto, except
for those that do not, in the aggregate, materially and adversely affect the
value of the Collateral. All consents, licenses, approvals or authorizations of,
or declarations with, any Governmental Authority required in connection with
each Loan Party's execution, delivery or performance of each Contract, General
Intangible or Account have been or will be duly and timely obtained, effected or
given and are or will be in full force and effect except where all failures to
do or be so, in the aggregate, do not materially and adversely affect the value
of the Collateral. No amount payable under or in connection with any of the
Contracts, General Intangibles or Accounts are evidenced by any chattel paper or
any promissory notes or other instruments that have not been delivered to
Administrative Agent on behalf of Secured Parties.
5.37 NO DEFAULTS UNDER CONTRACTS OR ACCOUNTS.
With respect to each Contract, Account and General Intangible, no default
by any Loan Party or event which with the giving of notice or the passage of
time would be a default has occurred and, to the knowledge of the executive
officers of Holdings, the other party or parties thereto are not in default
thereunder except as referred to in Section 5.17, and each Loan Party has fully
and timely performed all its material obligations thereunder. Except as referred
to in Section 5.17, the right, title and interest of such Loan Party thereunder
is not subject to any defense, set off, counterclaim or claim, and none of the
foregoing been asserted or alleged against such Loan Party except in respect of
such defaults, defenses, set offs, counterclaims and claims that in the
aggregate do not materially adversely affect the value of the Collateral. Except
as referred to in Section 5.17, the amount represented by each Loan Party to
Administrative Agent, on behalf of Lenders, from
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time to time as owing on any or all Accounts, Contracts or General Intangibles,
will at such time be the correct amount actually and unconditionally owing by
such account debtors thereunder.
5.38 SUBSIDIARIES.
No Borrower has any Subsidiaries nor any current plans to form or acquire
any Subsidiary.
5.39 ASSUMED NAMES.
Except as set forth on Schedule 5.39, no Loan Party conducts business
under any assumed names or trade names, or has conducted business under any
other names, or any assumed names or trade names, at any time prior to the date
hereof.
5.40 PLEDGE AGREEMENTS; REGISTRATION OF PLEDGE.
The Holdings Pledge Agreement, when executed and delivered by Holdings,
will be effective to grant to Administrative Agent, on behalf of Secured
Parties, a legal, valid and enforceable security interest in 100% (or at least
99% in the case of US LEC of Virginia, L.L.C.) of the Stock of each Borrower and
100% of the Stock of US LEC of Georgia Inc., to the extent that such security
interests may be created under Article 8 and/or Article 9 of the UCC. Such
security interests shall constitute fully perfected, first priority security
interests in such Stock and proceeds thereof upon Administrative Agent's taking
possession of the Stock certificates described in such Pledge Agreements, if
such Borrower is a corporation. In either case the security interests of
Administrative Agent on behalf of Secured Parties in Holdings' interests have
been duly registered on the books and records of such Borrower.
5.41 TRANSACTIONS WITH AFFILIATES.
No Affiliate and no officer or director of any Loan Party or any
individual related by blood, marriage, adoption or otherwise to any such
Affiliate, officer or director, or any Person in which any such Affiliate,
officer, director or individual related thereto owns any material beneficial
interest, is a party to any agreement, contract, commitment or transaction with
such Loan Party or has any material interest in any material property used by
such Loan Party, except as set forth on Schedule 5.41.
ARTICLE VI
CONDITIONS TO FIRST BORROWING DATE
On the First Borrowing Date, the following conditions shall have been
satisfied:
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6.1 CLOSING CERTIFICATES.
Administrative Agent and each Lender shall have received the following
certificates, all in form and substance satisfactory to Administrative Agent and
Requisite Lenders and all dated the First Borrowing Date upon which
Administrative Agent may conclusively rely unless and until later certificates
have been furnished to Administrative Agent and each Lender: (a) a certificate
of each Loan Party signed by a duly authorized Responsible Officer, certifying
as to (i) true copies of Organizational Documents of such Loan Party in effect
on such date; (ii) true copies of all corporate action (including, without
limitation, a corporate resolution of its board of directors ratifying the Loan
Documents, and authorizing the Obligations and the granting of the liens and
security interests in the Collateral securing the Obligations) taken by such
Loan Party relative to this Agreement, the Note and the other Loan Documents
which have been properly adopted and have not been modified or amended; and
(iii) the names, true signatures and incumbency of the Responsible Officers of
such Loan Party authorized to execute and deliver this Agreement, the Note and
the other Loan Documents; (b) a Certificate of Good Standing (or equivalent
certificate) for such Loan Party and for the managing member of any Loan Party
that is a limited liability company, duly issued by the Secretary of State of
each state in which such Loan Party intends to do business; and (c) a
certificate as to such other matters as Administrative Agent or any Lender shall
request.
6.2 OPINIONS OF COUNSEL.
Administrative Agent and each Lender shall have received the following
opinions, all dated the First Borrowing Date and all in form and substance
satisfactory to Administrative Agent and each Lender:
(a) a written opinion of counsel to each Loan Party, substantially
in the form of Exhibit D, as to such matters as shall be required by
Administrative Agent, any Lender or their respective counsel, including the
corporate good standing of such Loan Party, the proper adoption of any corporate
resolution required hereby, the authority of the Person signing for such Loan
Party, the validity, binding nature and enforceability of the Loan Agreement and
related Loan Documents and perfected liens and security interests granted to
Administrative Agent on behalf of Secured Parties by such Loan Party in the
Collateral; and
(b) a written opinion of regulatory counsel for Loan Parties,
substantially in the form of Exhibit E, as to such matters as shall be required
by Administrative Agent and its counsel, including the validity of each Loan
Party's authorizations and approvals, permits or licensing required by the
Federal Communications Commission, the Public Utilities Commission(s) and the
relevant state and local utilities commissions or municipality, and all other
applicable regulatory or governmental bodies.
6.3 CLOSING DOCUMENTS.
Administrative Agent and Lenders shall have received the following
documents, all in form and substance satisfactory to Administrative Agent,
Lenders and their respective counsel:
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(a) Agreement. This Agreement, duly executed by all Loan Parties;
(b) Notes. The Notes, duly executed by all Borrowers, to the order
of each Lender;
(c) Financing Statements. All UCC-1 financing statements necessary
to perfect the Liens granted hereby, each duly executed by each Loan Party, and
duly recorded in all the offices identified on Schedule 5.33;
(d) Pledge Agreement. The Holdings Pledge Agreement, substantially
in the form of Exhibit F, duly executed by Holdings, along with the original
pledged stock or membership interest certificates with executed blank stock
powers or assignments attached thereto;
(e) Interconnection Agreements. A summary of all interconnection
agreements to which any Loan Party is a party;
(f) Market Plan. A market plan for Birmingham, Alabama;
(g) Insurance. Policies and certificates of insurance required by
Section 8.7, accompanied by evidence of the payment of the premiums therefor;
(h) Financial Statements. The Financial Statements described in
Section 5.10;
(i) Balance Sheet. An unaudited consolidated balance sheet of
Holdings and its Subsidiaries, dated as of the end of the month preceding the
First Borrowing Date, certified by a Responsible Officer as fairly presenting
the financial condition of Holdings, evidencing current liabilities not in
excess of $31,000,000 (excluding those liabilities due for Capital Expenditures
in Fiscal Year beginning January 1, 1999);
(j) Equipment Room Layout. Detailed equipment room layouts for each
existing Site;
(k) Required Consents. Evidence of each Loan Party's obtaining the
Required Consents or a certificate of a Responsible Officer of Borrower
Representative.
(l) Fees. The Fees required to be paid on the First Borrowing Date
in the respective amounts specified in Section 2.20 (including the Fees
specified in the GECC Fee Letter); and
(m) Pre-Closing Lien Searches. Lien searches from all jurisdictions
reasonably determined by Administrative Agent or any Lender to be appropriate,
effective as of a date reasonably close to the First Borrowing Date, with
respect to each Loan Party (under their present names and any previous names),
reflecting no other Liens (other than Permitted Encumbrances) on any of the
Collateral.
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6.4 NO MATERIAL ADVERSE CHANGE.
As of the First Borrowing Date, after giving effect to any Advances, there
shall not have been (i) any litigation commenced which, if successful, would
have a material adverse impact on any Loan Party, its Subsidiaries, their
business or their ability to repay the Loan or which would challenge the
financing contemplated by this Agreement, except those litigations listed on
Schedule 5.17 and (ii) since Holding's last audited Financial Statements, any
material increase in the liabilities, liquidated or contingent, of any Loan
Party and its Subsidiaries or a material decrease in the assets of any Loan
Party and its Subsidiaries.
ARTICLE VII
CONDITIONS OF LENDING
7.1 CONDITIONS TO EACH BORROWING DATE.
The obligation of any Lender to fund any Advance, convert or continue any
Loan or portion thereof as a LIBOR Loan or incur any Letter of Credit Obligation
is subject to each Loan Party's performance of its obligations hereunder and
satisfaction of the following further conditions on the Borrowing Date for any
such Advance (including the First Borrowing Date), the date of such conversion
or continuation or the issuance of such Letter of Credit:
(a) Borrowing Certificate. Administrative Agent shall have received
a duly executed Borrowing Certificate in the form of Exhibit B or a request for
a Letter of Credit pursuant to Annex I.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing or would exist upon the consummation of
transactions to occur on such Borrowing Date.
(c) Representations and Warranties. The representations and
warranties contained in Article 5 shall be true and correct in all material
respects on and as of such Borrowing Date hereunder both before and after giving
effect thereto.
(d) No Regulatory Event. No Regulatory Event (in Requisite Lenders'
reasonable determination) shall have occurred and be continuing or would exist
upon the consummation of transactions to occur on such Borrowing Date.
(e) Expenses. All closing costs and other Administrative Agent's and
Lenders' expenses shall have been paid in full (or shall be paid first from such
Advance as provided in Section 2.13).
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(f) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory to Administrative Agent and Requisite Lenders,
and Administrative Agent and Requisite Lenders shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
reasonably satisfactory to Administrative Agent and Requisite Lenders, as
Administrative Agent and Requisite Lenders may from time to time request.
(g) Post-Closing Items. The post-closing items described on Schedule
7.1 shall have been completed in the time permitted, and each Loan Party shall
have provided Administrative Agent and Requisite Lenders with satisfactory
evidence thereof pursuant to Section 8.26.
7.2 AFFIRMATION OF REPRESENTATIONS AND WARRANTIES.
Any Borrowing Certificate or other request for any Advance or Letter of
Credit hereunder shall constitute a representation and warranty that (a) the
representations and warranties contained in Article 5 are true and correct on
and as of the date of such request with the same effect as though made on and as
of the date of such request and (b) on the date of such request no Default or
Event of Default has occurred and is continuing or exists or will occur or exist
after giving effect to such Advance or issuance of Letter of Credit (for this
purpose such Advance or Letter of Credit being deemed to have been made or
issued, as the case may be, on the date of such request). Failure of
Administrative Agent to receive notice from each Loan Party to the contrary
before the applicable Borrowing Date shall constitute a further representation
and warranty by such Loan Party that (x) the representations and warranties of
such Loan Party contained in the first sentence of this Section 7.2 are true and
correct on and as of such Borrowing Date with the same effect as though made on
and as of such Borrowing Date, (y) on such Borrowing Date, no Default or Event
of Default has occurred and is continuing or exists or will occur or exist after
giving effect to such Advance or issuance and (z) on such Borrowing Date, all
conditions set forth in this Article 7 have been satisfied.
7.3 DEADLINE FOR FUNDING CONDITIONS.
No Lender shall have any obligation to make any Advances hereunder if all
of the conditions set forth in Article 6 and in Article 7 have not been fully
satisfied or waived by Requisite Lenders and the first Advance made hereunder,
within the period of twelve (12) calendar months following the date hereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
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Loan Parties hereby jointly and severally agree as to all Loan Parties to,
from and after the date hereof until the Termination Date, keep and perform
fully each and all of the following covenants:
8.1 REPORTING AND INFORMATION REQUIREMENTS.
(a) Annual Audit Reports. As soon as practicable, and in any event
within ninety (90) days after the close of each Fiscal Year of Holdings,
Borrower Representative shall furnish or cause to be furnished to Administrative
Agent and Lenders audited statements of income, statements of cash flow and
retained earnings for such Fiscal Year and balance sheet as of the close of such
Fiscal Year, and notes to each, all in reasonable detail, and beginning with
Loan Parties' second full Fiscal Year after the date hereof setting forth in
comparative form the corresponding figures for the preceding Fiscal Year, with
such statements and balance sheet to be certified without qualification by
independent certified public accountants of recognized regional or national
standing selected by Borrower Representative and reasonably satisfactory to
Administrative Agent and Requisite Lenders.
(b) Quarterly Reports. Within forty five (45) days after the end of
each Fiscal Quarter, Borrower Representative shall furnish to Administrative
Agent and Lenders (i) unaudited consolidated statements of income, statements of
cash flow and retained earnings for Holdings for such quarter and for the period
from the beginning of Loan Parties' then current Fiscal Year to the end of such
quarter, and an unaudited consolidated balance sheet of Holdings as of the end
of such quarter, all in reasonable detail and certified by a Responsible Officer
of Borrower Representative as presenting fairly the financial position of Loan
Parties as of the end of such quarter and the results of their operations and
the changes in their financial position for such quarter, in conformity with
GAAP (except for accompanying notes thereto), subject to year-end audit
adjustments, (ii) updates of revenues, gross margin and EBITDA of Holdings on a
consolidating basis and (iii) upon request of Administrative Agent or Requisite
Lenders, an aging of accounts payable and accounts receivable.
(c) Compliance Certificates. Within forty-five (45) days after the
end of each Fiscal Quarter, Borrower Representative shall deliver to
Administrative Agent and Lenders a certificate dated as of the end of such
Fiscal Quarter, signed by a Responsible Officer of Borrower Representative (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 the
applicable Loan Party; (ii) stating that the signer has personally reviewed this
Agreement 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 Loan Parties' compliance with the
financial covenants set forth on Schedule 8.15.
(d) Accountants' Certificate. Each set of year-end audited
consolidated Financial Statements and balance sheet delivered pursuant to
Section 8.1(a) shall be accompanied by a certificate or report dated the date of
such statement and balance sheet by the accountants who certified such
statements and balance sheet stating in substance that they have reviewed this
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Agreement and that in making the examination necessary for their certification
of such statements and balance sheet they did not become aware of any Event of
Default or, if they did become so aware, such certificate or report shall state
the nature and period of existence thereof.
(e) Projections. If requested by Administrative Agent or Requisite
Lenders, Borrower Representative shall deliver to Administrative Agent and
Lenders within thirty (30) days after the beginning of each calendar year
projections of its anticipated income, expenses, cash flow, assets and
liabilities for the next five (5) calendar years prepared in good faith on
assumptions believed by Holdings to be reasonable and in a manner and format
consistent with other Financial Statements provided by Borrower Representative
to Administrative Agent and Lenders.
(f) Other Reports and Information. Upon the request of
Administrative Agent or Requisite Lenders, Borrower Representative shall deliver
to Administrative Agent and Lenders copies of (i) all regular or special reports
or effective registration statements which any Loan Party shall file with
Governmental Authorities, the FCC or the PUC (or any successor thereto) or any
securities exchange, (ii) financial statements, material reports, and other
information distributed by any Loan Party to its creditors or the financial
community in general, and (iii) all press releases issued by or concerning any
Loan Party.
(g) Further Information. Each Loan Party will promptly furnish to
Administrative Agent or any Lender such other information (including any report
by independent auditors) in such form as Administrative Agent or any Lender may
reasonably request.
8.2 OTHER NOTICES.
Promptly upon a Responsible Officer of any Loan Party becoming aware of
any of the following, Borrower Representative shall give Administrative Agent
and each Lender notice thereof, together with a written statement of a
Responsible Officer of Borrower Representative setting forth the details thereof
and any action with respect thereto taken or contemplated to be taken by such
Loan Party:
(a) a Default or Event of Default;
(b) any Material Adverse Change;
(c) any event or circumstance that could reasonably be expected to
have a Material Adverse Effect or cause a Material Adverse Effect;
(d) any event that could reasonably be expected to constitute a
Regulatory Event;
(e) the commencement, existence or threat of any proceeding by or
before any Governmental Authority against such Loan Party which, if adversely
decided, could reasonably be expected to have a Material Adverse Effect;
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(f) such Loan Party's receipt of any notice of violation of, or
liability under, any Environmental Laws affecting such Loan Party or any of its
properties that could reasonably be expected to have a Material Adverse Effect;
or
(g) any Change of Control or Loss of Key Management of Holdings.
8.3 NOTICE OF PENSION-RELATED EVENTS.
Each Loan Party shall promptly furnish Administrative Agent with written
notice upon the receipt by such Loan Party or the administrator of any Plan of
any notice, correspondence or other communication from the PBGC, the IRS, the
Secretary of Treasury, the Department of Labor, or any other Person, as the case
may be, relating to (i) any Reportable Event, (ii) any funding deficiency with
respect to any Plan, (iii) any liability, either primary or secondary, with
respect to complete or partial withdrawal from any Plan, (iv) proceedings to
terminate any Plan or (v) the appointment of a trustee for any Plan that could
reasonably be expected to have a Material Adverse Effect. Such notice shall be
accompanied by any pertinent documents including the relevant notice,
correspondence or other communication and a statement of a Responsible Officer
of such Loan Party describing the event or the action taken and the reasons
therefor.
8.4 INSPECTION RIGHTS.
To the extent required by Section 2.16, each Loan Party shall upon
reasonable notice permit such persons as Administrative Agent or any Lender may
designate to visit and inspect the Collateral or any other properties of such
Loan Party, to examine its books and records and take copies and extracts
therefrom and discuss its respective affairs with its officers, employees and
independent engineers at such times and as often as Administrative Agent may
reasonably request. Each Loan Party hereby authorizes such officers, employees
and independent engineers to discuss with Administrative Agent or such Lenders
the affairs of such Loan Party.
8.5 PRESERVATION OF CORPORATE EXISTENCE AND QUALIFICATION.
Each Loan Party shall maintain its existence, good standing and rights in
full force and effect in its jurisdiction of organization. Each Loan Party shall
qualify to do business and remain qualified and in good standing and shall
obtain all necessary authorizations to do business in each jurisdiction in which
failure to receive or retain such would have a Material Adverse Effect.
8.6 CONTINUATION OF BUSINESS.
Loan Parties shall continue to engage solely in the business of providing
telecommunications services and shall acquire and maintain in full force and
effect all material rights, privileges, franchises and licenses necessary
therefor (including any license or authorization required by the FCC or any
PUC).
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8.7 INSURANCE.
(a) Loan Parties shall, at their sole cost and expense, provide and
maintain or cause to be maintained at all times insurance in such forms and
covering such risks and hazards and in such amounts and with an insurance
corporation with a Best rating of "A" or above, licensed to do business in the
states where any Network or Loan Party is located, as may be satisfactory to
Administrative Agent, as shown on Schedule 8.7, and otherwise as may be required
by the Security Documents. If any Loan Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required above
or to pay all premiums relating thereto, Administrative Agent may at any time or
times thereafter obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto which Administrative
Agent deems advisable. Administrative Agent shall have no obligation to obtain
insurance for any Loan Party or pay any premiums therefor. By doing so,
Administrative Agent shall not be deemed to have waived any Default or Event of
Default arising from any Loan Party's failure to maintain such insurance or pay
any premiums therefor. All sums so disbursed, including attorneys' fees, court
costs and other charges related thereto, shall be payable on demand by Loan
Parties to Administrative Agent and shall be additional Obligations hereunder
secured by the Collateral.
(b) Administrative Agent reserves the right at any time upon any
material change in any Loan Party's risk profile (including any change in the
business conducted by any Loan Party or any laws affecting the potential
liability of such Loan Party) to require additional forms and limits of
insurance to, in Administrative Agent's reasonable opinion, adequately protect
both Administrative Agent's and Lenders' interests in all or any portion of the
Collateral and to ensure that each Loan Party is protected by insurance in
amounts and with coverage customary for its industry. If requested by
Administrative Agent, each Loan Party shall deliver to Administrative Agent from
time to time a report of a reputable insurance broker, satisfactory to
Administrative Agent, with respect to its insurance policies.
(c) Each Loan Party shall cause (i) all general liability and
automobile insurance policies to name Administrative Agent on behalf of Secured
Parties as an additional insured, (ii) all physical damage insurance policies to
contain a lender's or mortgagee's loss payable provision acceptable to
Administrative Agent, (iii) all insurance policies to provide that no
assignment, cancellation, material modification, reduction in amount or adverse
change in coverage thereof shall be effective until at least thirty (30) days
after receipt by Administrative Agent of written notice thereof, (iv) all
insurance policies to insure the interests of Administrative Agent on behalf of
Secured Parties regardless of any breach of or violation by such Loan Party of
any warranties, declarations or conditions contained therein and (v) all
insurance policies to provide that Administrative Agent and Lenders shall have
no obligation or liability for premiums, commissions, assessments or calls in
connection with such insurance. Administrative Agent shall be under no
obligation to verify the adequacy or existence of any insurance coverage. Each
Loan Party shall furnish Administrative Agent copies of, or acceptable
certificates with respect to, all such policies prior to the date hereof, and
shall provide to Administrative Agent, at least thirty (30) days prior to each
policy expiration date, evidence of the insurance being maintained by such Loan
Party in compliance with this Section 8.7(c). Certificates for insurance
required under clause (i) above shall
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be in ▇▇▇▇▇ Form 25S (attached to Schedule 8.7), and all certificates shall be
satisfactory in form and substance to Administrative Agent.
(d) If any of the Collateral is partially or totally damaged or
destroyed, Borrower Representative shall give prompt notice to Administrative
Agent, and all insurance proceeds, less the costs of collection thereof, shall
be paid to or retained by Administrative Agent. Settlements, adjustments or
compromises of any claims for loss, damage or destruction to the Collateral
shall be made jointly by Borrower Representative and Administrative Agent as
long as no Event of Default has occurred and is continuing, and otherwise shall
be made solely by Administrative Agent. Each Loan Party hereby authorizes and
directs any affected insurance company to pay such proceeds directly to
Administrative Agent, and to rely on Administrative Agent's statement as to
whether an Event of Default has occurred. Loan Parties shall pay all costs of
collection of insurance proceeds payable on account of such damage or
destruction. If no Event of Default has occurred and is continuing on the date
any Network is partially or totally damaged or destroyed, Administrative Agent
shall make available to Borrower Representative the proceeds of any physical
damage insurance actually paid to Administrative Agent in respect of such damage
or destruction of any of the Collateral (after deducting therefrom any sums
retained by Administrative Agent in reimbursement for costs of collection) to
pay the cost of restoration, and Borrower Representative shall proceed promptly
with the work of restoration of the Collateral and shall pursue the work of
restoration diligently to completion. If any Event of Default has occurred and
is continuing either on the date of such damage or destruction or on the date
such insurance proceeds are paid, or if any Event of Default shall occur prior
to completion of such work of restoration, then Administrative Agent, at its
option, may apply such insurance proceeds in payment of any of the Obligations,
in such order as set forth in Section 2.10(c). Any insurance proceeds remaining
after completion of work or restoration shall, at Administrative Agent's
election, be applied in accordance with Section 2.10(c), or paid over to
Borrower Representative. Upon completion of any restoration, Borrower
Representative shall deliver to Administrative Agent a certificate stating that
the restoration has been duly completed and accounting for the use of any
insurance proceeds in such restoration.
8.8 PAYMENT OF TAXES, CHARGES, CLAIMS AND CURRENT LIABILITIES.
Each Loan Party shall pay or discharge:
(a) on or prior to the date on which penalties thereto accrue, all
taxes, assessments and other government charges or levies imposed upon it or any
of its properties or income (including such as may arise under Section 4062,
Section 4063 or Section 4064 of ERISA, or any similar provision of law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen and other like persons which
result in creation of a Lien upon any such property;
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property (other
than Permitted Encumbrances)
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or which, if unpaid, might give rise to a claim entitled to priority over
general creditors of such Loan Party in a case under Title 11 (Bankruptcy) of
the United States Code, as amended, or in any insolvency proceeding or
dissolution or winding-up involving such Loan Party; and
(d) all other current liabilities so that none is overdue more than
sixty (60) days.
Notwithstanding the foregoing, each Loan Party shall be entitled to
contest or appeal the requirements of any Law or Governmental Authority or the
payment of any tax, assessment, charge, levy, claim, asserted liability or any
judgment entered against such Loan Party (collectively, in this Section 8.8, the
"requirements"), as long as (i) such requirements are being contested in good
faith by appropriate proceedings diligently conducted; (ii) Borrower
Representative has given Administrative Agent written notice of such
requirements and its intent to contest them, with supporting reasons for such
contest, before the addition of any interest or penalties that may accrue on
such requirements; (iii) such Loan Party maintains adequate cash reserves and
makes other appropriate provisions as may be required by GAAP to provide for any
liability arising from such requirements; (iv) the contesting of, or failure to
comply with, such requirements does not in any way jeopardize such Loan Party's
ability or authority to operate all or any part of its business or the value or
continuing priority of the security interests of Administrative Agent on behalf
of Secured Parties in the Collateral; (vi) the contesting of, or failure to
comply with, such requirements does not have a Material Adverse Effect, in the
reasonable determination of Requisite Lenders; and (vii) any foreclosure,
attachment, execution, sale or similar proceeding against such Loan Party or any
of its properties in connection with any such requirements is duly stayed by
posting of a bond or security deposit or by other action sufficient under
applicable law to stay such foreclosure, attachment, execution, sale or other
proceedings.
8.9 FINANCIAL ACCOUNTING PRACTICES.
Each Loan Party shall make and keep books, records and accounts which, in
reasonable detail, accurately and fairly reflect its transactions and
dispositions of its assets and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (a) transactions are executed
in accordance with management's general or specific authorization, (b)
transactions are recorded as necessary (i) to permit preparation of financial
statements in conformity with GAAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
8.10 COMPLIANCE WITH LAWS.
Each Loan Party shall comply in all respects with all Laws applicable to
such Loan Party, including all Environmental Laws; provided, however, that such
Loan Party shall not be deemed to be in violation of this Section 8.10 as a
result of any failure to comply which would not result in any liability or
exposure to Administrative Agent or Lenders or any fines, penalties, injunctive
relief or other civil or criminal liabilities which, in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
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8.11 USE OF PROCEEDS.
Each Loan Party shall use the proceeds of Advances hereunder only as set
forth in Section 2.19.
8.12 GOVERNMENT AUTHORIZATIONS; REGULATORY AUTHORIZATIONS, ETC.
Each Loan Party shall at all times obtain and maintain in force all
Regulatory Authorizations and all other authorizations, permits, consents,
approvals, licenses, exemptions and other actions by, and all registrations,
qualifications, designations, declarations and other filings with, any
Governmental Authority necessary in connection with execution and delivery of
this Agreement, the Notes or any other Loan Document, consummation of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions hereof or thereof or to ensure the legality, validity
and enforceability hereof or thereof.
8.13 CONTRACTS AND FRANCHISES.
Each Loan Party shall comply with all agreements or instruments to which
it is a party or by which it or any of its properties (now owned or hereafter
acquired) may be subject or bound and shall maintain any and all franchises it
may have or hereafter acquire; provided, however, that such Loan Party shall not
be deemed to be in violation of this Section 8.13 as a result of any failure to
comply with any agreement if such failure would not have a Material Adverse
Effect on Loan Parties taken as a whole.
8.14 SITE LEASES AND CONSENTS.
Each Loan Party shall maintain in force and renew as necessary all Site
Leases and shall obtain such Landlord Consents as Administrative Agent or
Requisite Lenders shall reasonably request to protect its and their Liens and
access to the Collateral. All Site Leases entered into after the date hereof
shall have a term (including automatic renewals and such Loan Party's unilateral
renewal rights) equal to or greater than the term of this Agreement and shall
require that Administrative Agent be given notice of default and the right to
elect to cure defaults and/or assume such agreement upon such Loan Party's
default thereunder or an Event of Default under this Agreement.
8.15 FINANCIAL COVENANTS.
Loan Parties shall comply with the financial covenants set forth on
Schedule 8.15.
8.16 PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.
(i) Borrower Representative shall notify Administrative Agent
immediately if it knows or has reason to know that any application or
registration relating to any patent, trademark or copyright (now or hereafter
existing) may become abandoned or of any adverse determination or
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development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court) regarding any Loan Party's
ownership of any patent, trademark or copyright, its right to register the same,
or to keep and maintain the same.
(ii) In no event shall any Loan Party, either itself or through any
agent, employee, licensee or designee, file an application for the registration
of any patent, trademark or copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency without giving Administrative Agent prior written notice thereof and,
upon request of Administrative Agent, such Loan Party shall execute and deliver
any and all Patent Security Agreements, Copyright Security Agreements or
Trademark Security Agreements as Administrative Agent may request to evidence
the Lien of Administrative Agent on behalf of Secured Parties on such patent,
trademark or copyright, and the General Intangibles of such Loan Party relating
thereto or represented thereby.
(iii) Each Loan Party shall take all actions necessary or requested
by Administrative Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of the patents,
trademarks and copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings, unless the applicable
Loan Party shall determine that such patent, trademark or copyright is not
material to the conduct of its business.
(iv) In the event that any of the patent, trademark or copyright
Collateral is infringed upon, or misappropriated or diluted by a third party,
Borrower Representative shall notify Administrative Agent promptly after any
Loan Party learns thereof. Each Loan Party shall, unless such Loan Party shall
reasonably determine that such patent, trademark or copyright Collateral is in
no way material to the conduct of its business or operations, promptly ▇▇▇ for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation or dilution, and shall take such other
actions as Administrative Agent shall deem appropriate under the circumstances
to protect such patent, trademark or copyright Collateral.
8.17 SITES.
For all Sites acquired after the date hereof by any Loan Party at any time
(except for leases of retail sales offices with terms shorter than three years),
such Loan Party shall provide to Administrative Agent, all at such Loan Party's
expense and all in form and substance reasonably satisfactory to Administrative
Agent, within twenty (20) days of such Loan Party's acquisition thereof and
before placing any Collateral thereon:
(a) Site Leases. Copies of duly executed counterparts of the Site
Lease; and
(b) Consent. Duly executed Landlord Consent executed by the owner of
such real property.
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8.18 CERTAIN NOTICES.
Borrower Representative shall promptly provide Administrative Agent and
Lenders with written notice and verification in form and substance satisfactory
to Requisite Lenders of each occasion that (i) a switch is installed and (ii) a
switch becomes operational in one of the Markets.
8.19 MANAGEMENT TEAM.
Each Loan Party shall engage and continue to retain a professional and
experienced management staff.
8.20 ENFORCEMENT OF CONTRACTS.
Each Loan Party shall exercise promptly and diligently its material rights
under each Contract, General Intangible and/or Account (other than any right of
termination). Borrower Representative shall deliver to Administrative Agent
copies of all material demands or notices received by any Loan Party relating in
any way to any Contract, General Intangible and/or Account.
8.21 LEGAL FEE RESERVE.
Loan Parties shall maintain a legal fee reserve adequate to cover current
period unpaid litigation expense for all pending litigation in form, amount and
substance satisfactory to Administrative Agent and Requisite Lenders and, upon
request of Administrative Agent or Requisite Lenders, will provide
Administrative Agent and Lenders with a quarterly analysis evidencing its
compliance with this requirement.
8.22 SUBORDINATED LOANS.
Any and all Indebtedness, loans or advances to any Loan Party by any other
Loan Party shall upon request of Administrative Agent or Requisite Lenders be
subordinated to any and all Obligations of such Loan Party to Administrative
Agent and Lenders upon terms and provisions reasonably satisfactory to
Administrative Agent and Requisite Lender, and each such other Loan Party shall
deliver to Administrative Agent and Lenders a signed subordination agreement on
terms satisfactory to Administrative Agent and Requisite Lenders.
8.23 FUTURE SUBSIDIARIES.
(a) Upon any acquisition or formation by Holdings of a Subsidiary
that has $100,000 or more of assets or the acquisition by any Subsidiary of
Holdings that is not already a Loan Party of $100,000 or more of assets,
Holdings shall execute and deliver to Administrative Agent a pledge supplement
in the form annexed to the Holdings Pledge Agreement, pursuant to which Holdings
shall pledge all of the capital stock (or partnership or membership interests)
of such Subsidiary to Administrative Agent on behalf of Secured Parties as
collateral security for payment of all the Obligations.
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(b) Loan Parties shall use their best efforts to secure the
Regulatory Authorization to allow US LEC of Georgia Inc. to become a Borrower or
Guarantor and following receipt of such Regulatory Authorization to cause US LEC
of Georgia Inc. to deliver to Administrative Agent and Requisite Lenders the
documents required to be delivered by clauses (i), (ii) and (iii) of Section
9.13(b).
8.24 LIENS ON AFTER-ACQUIRED PROPERTY.
With respect to any assets acquired after the date hereof of the type
defined as Collateral in this Agreement of each Loan Party or any Subsidiary of
Holdings as to which Administrative Agent on behalf of Secured Parties does not
have a perfected first-priority Lien, such Loan Party shall promptly grant or
cause to be granted, or confirm or evidence the grant herein of, to
Administrative Agent on behalf of Secured Parties a Lien, upon the terms
contained herein, on all such property and interests, free of all other Liens
except those permitted under Section 9.2. Such Loan Party at its own expense,
shall (i) prepare, execute, acknowledge and deliver, or cause the preparation,
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument deemed by Administrative Agent
to be necessary or desirable for the creation, perfection, renewal and
continuation of the foregoing Liens, (ii) pay, or cause to be paid, all taxes,
fees and legal expenses related to such registration, filing or recording and
(iii) deliver to Administrative Agent resolutions of Board of Directors and
opinions of counsel, in form and substance as may be reasonably acceptable to
Administrative agent.
8.25 YEAR 2000 COMPLIANCE.
Each Loan Party shall take all actions necessary and commit adequate
resources to assure that computer-based and other systems of Holdings and its
Subsidiaries are able to process dates effectively, including dates before, on
and after January 1, 2000, without experiencing any disruption or errors that
could reasonably be expected to cause a Material Adverse Effect. At the request
of Administrative Agent or Requisite Lenders, Loan Parties will provide
Administrative Agent and Lenders with assurances and substantiations (including
but not limited to the results of internal and external audit reports prepared
in the ordinary course of business) reasonably acceptable to Administrative
Agent and Requisite Lenders that Holdings and its Subsidiaries are taking all
reasonable actions to assure the future conduct of its and their businesses and
operations before, on and after January 1, 2000 without experiencing a
disruption or errors that could reasonably be expected to cause a Material
Adverse Effect.
8.26 POST-CLOSING ITEMS.
Each Loan Party shall comply with the post-closing items set forth on
Schedule 7.1 in the time permitted, if any is indicated, and shall promptly
provide Administrative Agent and Requisite Lenders with evidence thereof in form
and substance as may be reasonably acceptable to Administrative Agent and
Requisite Lenders.
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8.27 FURTHER ASSURANCES.
Each Loan Party executing this Agreement agrees that it shall and shall
cause each other Loan Party to, at such Loan Party's expense and upon request of
Administrative Agent or Requisite Lenders, duly execute and deliver, or cause to
be duly executed and delivered, to Administrative Agent and Lenders such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Administrative Agent or Requisite Lenders to
carry out more effectively the provisions and purposes of this Agreement or any
other Loan Document.
ARTICLE IX
NEGATIVE COVENANTS
Each Loan Party hereby jointly and severally agrees as to all Loan Parties
that, until the Termination Date, no Loan Party shall, without prior written
consent of Requisite Lenders, do or permit to exist any of the following:
9.1 INDEBTEDNESS.
Create, incur, assume or suffer to exist at any one time any Indebtedness,
except for Permitted Debt, or purchase, redeem, prepay, defease or otherwise
acquire for value or make any payment on account or in respect of any principal
amount of Permitted Subordinated Debt.
9.2 RESTRICTIONS ON LIENS AND SALE OF COLLATERAL.
Create or suffer to exist any Lien on the Collateral or on any other
property of any Loan Party, or any part thereof, whether superior or subordinate
to the Lien of the Loan Documents, or assign, convey, sell or otherwise dispose
of or encumber its interest in the Collateral, or any part thereof (including
execution of any lease), or permit any such action to be taken, except for the
following permitted dispositions and encumbrances (the "Permitted
Encumbrances"): (i) Liens and encumbrances in favor of Administrative Agent on
behalf of Secured Parties; (ii) government Liens, including Liens for Taxes not
yet due, or which are being contested in good faith and by appropriate
proceedings in accordance with Section 8.8; (iii) Carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of not more than
thirty (30) days or which are being contested in good faith and by appropriate
proceedings in accordance with Section 8.8; (iv) pledges or liens in connection
with workers' compensation, unemployment insurance and other social security
legislation; (v) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (vi) easements, rights-of-way, restrictions and
other similar encumbrances that are not substantial in amount, and which do not
in any case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of such Loan Party; (vii)
judgments and
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judgment liens with respect to which execution has been stayed within ten (10)
days by appropriate judicial proceedings and the posting of adequate security
which may not be any of the Collateral; (viii) specific liens, if any,
identified on Schedule 9.2; (ix) sales and other dispositions of equipment and
inventory in the ordinary course of business for fair value, not exceeding
$200,000 per year in the aggregate; (x) Liens to secure purchase money
indebtedness and Capital Leases permitted by clause (ii) of the definition of
Permitted Debt which is secured by only the property acquired; (xi) cash
collateralization of the Letters of Credit specified on Schedule 9.1; and (xii)
certain other Liens as may be permitted with Requisite Lenders' prior written
consent. Any of the foregoing Liens shall remain "Permitted Encumbrances" as
long as they are being contested by such Loan Party in compliance with Section
8.8. In addition, no Loan Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, which would prohibit the
creation of a Lien on any of its properties or other assets in favor of
Administrative Agent on behalf of Secured Parties, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
9.3 LIMITATION ON CONTINGENT OBLIGATIONS.
Agree to, or assume, guarantee, endorse or otherwise in any way be or
become responsible or liable for, directly or indirectly, any Contingent
Obligation except for those created or contemplated by the Loan Documents or
with respect to the obligations of another Loan Party in the ordinary course of
business.
9.4 PROHIBITION OF MERGERS, ACQUISITIONS, NAME, OFFICE OR BUSINESS
CHANGES, ETC.
(a) Enter into, or become the subject of, any transaction of merger,
acquisition or consolidation or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of such Loan Party's business or assets, whether now owned or
hereafter acquired, without Requisite Lenders' prior written consent.
(b) Change its name, chief executive office, principal place of
business, corporate structure or the location of any Collateral without giving
Administrative Agent and Lenders at least thirty (30) days' advance written
notice of such change, and ensuring that any steps that Administrative Agent or
Requisite Lenders may deem necessary to continue the perfection and priority of
security interests of Administrative Agent on behalf of Secured Parties in the
Collateral shall have been taken.
(c) Change the Fiscal Year end of such Loan Party from December 31,
except with the prior written consent of Requisite Lenders, which consent shall
not be unreasonably withheld.
(d) Amend, restate or otherwise modify, or violate any terms of, its
Organizational Documents in any material respect without the prior written
consent of Requisite Lenders, which consent will not be unreasonably withheld.
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(e) Become or agree to become a general or limited partner in any
general or limited partnership, or a member in a limited liability company or a
joint venturer in any joint venture.
(f) Acquire or purchase substantially all of the stock or ownership
interests in, or substantially all of the business, assets, customers or
operations of, any other entity for more than $200,000 in one transaction or a
series of related transactions.
(g) Enter into any new business or make any material change in any
of such Loan Party's business objectives, purposes and operations from those
contemplated in the Business Plan without the prior written consent of Requisite
Lenders.
(h) Establish or seek to establish any Network outside of the
Markets.
9.5 LIMITATION ON EQUITY PAYMENTS.
In the case of Holdings, make any Equity Payment and, in the case of any
other Loan Party, make any Equity Payment to a Person other than Holdings.
9.6 PROHIBITION ON SALE OR ISSUANCE OF STOCK.
Issue any stock, stock option, warrant, or any other securities other than
non-convertible debt securities, or the right to receive any such security
("equity securities") of each Loan Party; provided, however, however, that
Holdings may issue equity securities so long as the issuance of such equity
securities does not directly or indirectly cause a Change of Control.
9.7 LIMITATION ON INVESTMENTS, ADVANCES AND LOANS.
Organize, create, acquire, capitalize or own any Subsidiary having assets
of $100,000 or more except in compliance with Section 9.13 or make or commit to
make any advance, loan, guarantee of any Indebtedness, extension of credit or
capital contribution to, or hold or invest in or purchase or otherwise acquire
any stock, bonds, notes, debentures or other securities of, or make any other
investment in, any Person, including any officer of a Loan Party, any Affiliate
of a Loan Party or any officer of any Affiliate of a Loan Party, except for
loans to another Loan Party, travel advances in the ordinary course of business,
relocation loans to employees but not in excess of $250,000 in the aggregate
outstanding at any one time, other loans to any employees of any Loan Party but
in any case in an amount (including principal and interest outstanding) not to
exceed $250,000 in the aggregate at any given time, and Cash.
9.8 CAPITAL EXPENDITURES.
Until substantially all the Switches contemplated by the Business Plan are
operating, directly or indirectly make or commit to make any expenditure in
respect of the purchase or other acquisition (including installment purchases or
Capital Leases) of fixed or capital assets, except for expenditures in
accordance with the Business Plan and normal replacements and maintenance
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(including capacity expansions and enhancements for existing Sites) which are
properly charged to current operations or expenditures of Excess Cash Flow not
required to prepay the Loans pursuant to Section 2.10(b); provided, however,
that Loan Parties may make Capital Expenditures in addition to those permitted
by Section 8.15 (i) in the Fiscal Year ended December 31, 1999 of up to
$10,000,000 and (ii) in the Fiscal Year ended December 31, 2000 of up to
$35,000,000; provided, further, that any Capital Expenditures made pursuant to
the foregoing proviso shall be (i) from the amount collected in the applicable
Fiscal Year on previously disputed amounts payable to any Loan Party with
respect to reciprocal compensation related to internet service providers and
related facility charges and (ii) for the acquisition of additional fixed or
capital assets related to expansion of Loan Parties' telecommunications business
to include additional Sites that are within the Markets, additional back office
equipment related to services, products and capabilities and/or additional
telecommunications equipment related to additional services, products and
capabilities within the Markets.
9.9 LIMITATION ON LEASES.
Enter into any agreement, or be or become liable under any agreement, not
in existence as of the date hereof and reflected on such Loan Party's financial
statements, for the lease, hire or use of any real or personal property in
excess of $100,000 in the aggregate, including capital or operating leases,
except that such Loan Party may, in the ordinary course of business and on terms
standard in the industry, enter into leases or agreements for office space,
vehicles or office equipment and for the location or storage of Collateral.
9.10 TRANSACTIONS WITH AFFILIATES.
Except as described in Schedule 5.41, enter into any transactions,
including any loans or advances, any repayment of loans or advances, or the
purchase, sale or exchange of property or the rendering of any services, with
any Affiliate, or enter into, assume or suffer to exist any employment or
consulting contract with any Affiliate, or otherwise pay any fees or expenses
to, or reimburse or assure any obligation for the reimbursement of any expenses
incurred by, any Affiliate.
9.11 EXTENSION OF ACCOUNTS.
Without Requisite Lenders' prior written consent, with respect to any
material Accounts, General Intangibles or Contracts, (i) grant any material
extension of the time of payment, (ii) compromise, compound or settle for a
material amount less than the full amount thereof, (iii) release any person
liable for the payment thereof, or (iv) allow any credit or discount whatsoever
thereon, other than trade discounts granted in the normal course of business or
discounts, compromises, compounds or settlements that will not have a Material
Adverse Effect.
9.12 ASSUMED NAMES.
Transact or engage in business under any assumed name, fictitious name,
trade style or "d/b/a" except those identified on Schedule 5.39.
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9.13 SUBSIDIARIES.
(a) Permit or cause any Borrower to create, organize or acquire a
Subsidiary.
(b) Except for US LEC of Georgia Inc., permit or cause any
Subsidiary of Holdings to own assets of more than $100,000 unless such
Subsidiary delivers to Administrative Agent and Lenders (i) a guaranty in favor
of Secured Parties on terms substantially the same as those provided in Article
11 which is secured by a grant of security in all of its assets on terms
substantially the same as provided in Articles 4 and 10 or documentation
pursuant to which such Subsidiary becomes a Borrower, which documentation shall
be satisfactory to Requisite Lenders, (ii) evidence of the filing of financing
statements as reasonably required by Administrative Agent and (iii) resolutions
of Board of Directors and opinions of counsel, in form and substance similar to
those provided on the date hereof with respect to Loan Parties and acceptable to
Requisite Lenders, which acceptance may not be unreasonably withheld.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
10.1 EVENTS OF DEFAULT.
An Event of Default shall mean the occurrence or existence of one or more
of the following events or conditions (whatever the reason for such Event of
Default and whether voluntary, involuntary or effected by operation of Law):
(a) Payment Default. Any Borrower (i) fails to make any payment of
principal of, or interest on, or Fees owing in respect of, the Loans or any of
the other Obligations within two (2) Business Days after such amount becomes due
and payable or (ii) fails to pay or reimburse Administrative Agent or Lenders
for any expense reimbursable hereunder or under any other Loan Document within
ten (10) Business Days following demand for such reimbursement or payment of
expenses.
(b) False Statement. If any statement, representation or warranty
made or deemed made by any Loan Party in any Loan Document or made in any
financial statement, certificate, report, exhibit or document furnished to
Administrative Agent or any Lender pursuant to any Loan Document, proves to have
been untrue, incomplete, false or misleading in any material respect as of the
time when made or deemed made (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
(c) Immediate Default. Any Loan Party shall fail or neglect to
perform, keep or observe any of the provisions of Sections 8.2, 8.7, 8.11, 8.15,
8.24 and Article 9.
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(d) Covenant Defaults. If any Loan Party fails or neglects to
perform, keep or observe any provision of this Agreement, and such default
continues for a period of twenty (20) calendar days after the earlier of such
Loan Party's knowledge thereof or receipt of written notice from Lender thereof,
except for violations of Section 8.8(d), which shall become an Event of Default
at the end of the sixty (60) day period stated therein and except for specific
Defaults listed elsewhere in this Section 10.1, as to which no notice or cure
period shall apply unless specified.
(e) Undischarged Judgments. If one or more judgments for the payment
of money have been entered against Borrower in an amount in excess of $200,000
in the aggregate and such judgment or judgments have remained undischarged and
unstayed for a period of thirty (30) calendar days or, if stayed, all of the
conditions in Section 8.8 have not been satisfied.
(f) Attachments, Etc. If a writ or warrant of attachment,
garnishment, execution, distraint or similar process has been issued against any
Loan Party or any of its properties in an amount in excess of $200,000, which
has remained undischarged and unstayed for a period of thirty (30) consecutive
days or, if stayed, all of the conditions in Section 8.8 have not been
satisfied.
(g) Default Under Third Party Agreements. A default or breach occurs
under any other agreement, document or instrument to which any Loan Party is a
party which is not cured within any applicable grace period, and such default or
breach (i) involves the failure to make any payment $200,000 in the aggregate,
or (ii) causes, or permits any holder of such Indebtedness or a trustee to
cause, Indebtedness or a portion thereof in excess of $200,000 in the aggregate
to become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(h) Dissolution; Discontinuance of Business, Etc. If any Loan Party
discontinues its usual business, dissolves, has its charter revoked, winds up or
liquidates itself or its business.
(i) Involuntary Bankruptcy or Receivership Proceedings. A case or
proceeding commences against any Loan Party seeking a decree or order in respect
of any Loan Party (i) under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for any Loan
Party or of any substantial part of any such Person's assets, or (iii) ordering
the winding-up or liquidation of the affairs of any Loan Party, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or
such court shall enter a decree or order granting the relief sought in such case
or proceeding.
(j) Voluntary Bankruptcy. Any Loan Party (i) prepares to file or
files a petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) fails to contest in a timely and
appropriate manner or consents to the institution of proceedings thereunder or
to the filing of any such petition or to the appointment of or taking possession
by a custodian, receiver,
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liquidator, assignee, trustee or sequestrator (or similar official) of any Loan
Party or of any substantial part of any such Person's assets, (iii) makes an
assignment for the benefit of creditors, (iv) takes any corporate action in
furtherance of any of the foregoing or (v) admits in writing its inability to,
or shall be generally unable to, pay its debts as such debts become due.
(k) Assignments for Benefit of Creditors, Etc. If any Loan Party
makes an assignment for the benefit of creditors, or admits in writing its
inability to pay its debts generally as they become due, or consents to the
appointment of a receiver, trustee or liquidator of itself or of all or any part
of its properties.
(l) Non-compliance with Governmental Requirements. If any Loan Party
fails to comply with any requirement of any Governmental Authority within twenty
(20) calendar days after notice in writing of such requirement shall have been
given to such Loan Party by such Governmental Authority or such longer period of
time permitted by such Governmental Authority and is not being contested by such
Loan Party in compliance with Section 8.8.
(m) Regulatory Authorizations. If any Regulatory Authorization in
connection with this Agreement or any other Loan Document or any such Regulatory
Authorization now or hereafter necessary or advisable to make this Agreement or
any other Loan Documents legal, valid, enforceable and admissible in evidence or
to permit each Loan Party to conduct its business is not obtained or has ceased
to be in full force and effect or has been modified or amended or has been held
to be illegal or invalid or is revoked or terminated, and is not being contested
by such Loan Party in compliance with Section 8.8, and Requisite Lenders have
reasonably determined in good faith (which determination shall be conclusive)
that such event or occurrence may have a Material Adverse Effect.
(n) Damage or Destruction. If the proceeds of any physical damage
insurance actually paid in respect of the partial or total damage or destruction
of any material amount of Equipment are insufficient to cover the cost of the
restoration thereof or if Administrative Agent determines that such damage or
destruction is so extensive that repair or restoration cannot be expected within
a time period short enough to prevent a Material Adverse Effect.
(o) Landlord Consents. If Loan Party fails to provide the Landlord
Consents required hereunder and Requisite Lenders determine in their sole
discretion that such failure results in a material impairment of Lenders'
security for the Loans.
(p) ERISA Defaults. If, with respect to any Plan, (i) there has
occurred a Reportable Event being considered by the PBGC which may reasonably
result in any material liability to the PBGC with respect to any Plan, (ii) a
Plan has been terminated, (iii) a trustee has been appointed by a United States
District Court to administer a Plan, (iv) a PBGC or any other person has
instituted proceedings to terminate a Plan or to appoint a trustee to administer
any such Plan, (v) any Loan Party or any Affiliate has withdrawn, completely or
partially, from any Plan, (vi) any Loan Party or any Affiliate has incurred
secondary liability for withdrawal liability payments under any Plan or (vii) a
Plan has failed to meet the minimum funding standards established under the Code
or ERISA.
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(q) Defaults Under Other Loan Documents. If any default,
misrepresentation or breach should occur under any Pledge Agreement, Security
Document, Guaranty or other Loan Document and is not cured or waived within the
time permitted therein, or any such Loan Documents should cease to be in full
force and effect, or any Loan Party thereto should assert any unenforceability
of, or deny liability on, or admit inability to perform under, any such Loan
Document.
(r) Security Interest. Any material provision of any Loan Document
shall for any reason cease to be valid, binding and enforceable in accordance
with its terms (or any Loan Party shall challenge the enforceability of any Loan
Document or shall assert in writing, or engage in any action or inaction based
on any such assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and enforceable in accordance
with its terms), or any security interest created under any Loan Document shall
cease to be a valid and perfected first priority security interest or Lien
(except as otherwise permitted herein or therein) in any of the Collateral
purported to be covered thereby.
(s) Change of Control, Etc. Any Change of Control or Loss of Key
Management occurs.
10.2 REMEDIES.
(a) If any Event of Default shall have occurred and be continuing or
if a Default shall have occurred and be continuing and Requisite Lenders shall
have determined not to make any Advances or incur any Letter of Credit
Obligations so long as that specific Default is continuing, Administrative Agent
shall (at the written request of the Requisite Lenders), without notice, suspend
the Commitments with respect to further Advances and/or the incurrence of
further Letter of Credit Obligations, whereupon any further Advances and Letter
of Credit Obligations shall be made or extended (in the sole discretion of the
Requisite Lenders) so long as such Default or Event of Default is continuing. If
any Event of Default shall have occurred and be continuing, Administrative Agent
shall (at the written request of Requisite Lenders), without notice except as
otherwise expressly provided herein, increase the rate of interest applicable to
the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Administrative Agent shall (at the written request of the Requisite Lenders),
upon notice to Borrower's Representative, (i) terminate the Commitments with
respect to further Advances or the incurrence of further Letter of Credit
Obligations; (ii) declare all or any portion of the Obligations, including all
or any portion of any Loan to be forthwith due and payable, and require that the
Letter of Credit Obligations be cash collateralized as provided in Annex I, all
without presentment, demand, protest or further notice of any kind, all of which
are expressly waived by Borrowers and each other Loan Party; and (iii) exercise
any rights and remedies provided to Administrative Agent on behalf of Secured
Parties under the Loan Documents and/or at law or equity, including all remedies
provided under the Code; provided, however, that upon the occurrence of an Event
of Default specified in Sections 10.1(i), (j) or (k), the Commitments shall be
immediately terminated
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and all of the Obligations, including the Loans, shall become immediately due
and payable without declaration, notice or demand by any Person.
10.3 WAIVERS BY LOAN PARTIES.
Except as otherwise provided for in this Agreement or by applicable law,
each Loan Party waives (including for purposes of Article 11): (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Administrative Agent on behalf of Secured Parties
on which any Loan Party may in any way be liable, and hereby ratifies and
confirms whatever Administrative Agent on behalf of Secured Parties may do in
this regard, (b) all rights to notice and a hearing prior to Administrative
Agent's taking possession or control of, or to Administrative Agent's replevy,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Administrative Agent on behalf of
Secured Parties to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws. If any notification of
intended disposition of any of the Collateral is required by law, such
notification shall be deemed reasonably and properly given if given in
accordance with Section 12.5 at least ten (10) days before such disposition.
10.4 EXERCISE OF RIGHTS.
Subject to any requirements for FCC, PUC or other governmental approval
upon the occurrence of any Event of Default, the rights, powers and privileges
provided in this Section 10.4 and all other remedies available to Administrative
Agent and Lenders under this Agreement or by statute or by rule of law may be
exercised by Administrative Agent or any Lender at any time from time to time
whether or not the Obligations shall be due and payable, and whether or not
Administrative Agent or any Lender shall have instituted any foreclosure or
other action for the enforcement of this Agreement or any other Loan Document.
No failure to exercise, nor any delay in exercising on the part of
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under any of the other Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or future exercise thereof
or the exercise of any other right, remedy, power or privilege.
10.5 RIGHTS OF SECURED PARTY.
In addition to all other rights and remedies granted to it under this
Agreement, the other Loan Documents and under any other instrument or agreement
securing, evidencing or relating to any of the Obligations, if any Event of
Default shall have occurred and be continuing, Administrative Agent may exercise
all rights and remedies of a secured party.
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10.6 ADDITIONAL REMEDIES.
Remedies of Administrative Agent and Lenders upon the occurrence and
during the continuance of an Event of Default shall include, in addition to, and
not in lieu of, such remedies as are available at law or in equity or provided
for in any of the Loan Documents, the following:
(a) Foreclosure; Receivership. Administrative Agent shall be
entitled to file one or more suits at law or in equity to collect the
Obligations and/or to foreclose on the Liens on and security interests created
by this Agreement or any other Loan Document. Administrative Agent may apply or
require any Loan Party to apply for any necessary transfers, assignments,
orders, consents or licenses in connection with the operation or abandonment of
any Network or any part thereof, and shall also be entitled as a matter of right
and without notice and without requiring bond (notice and bond being hereby
waived), without regard to the solvency or insolvency of any Loan Party at the
time of application and without regard to the value of the Collateral at that
time, to have a receiver appointed by a court of competent jurisdiction in order
to manage, protect and preserve the Collateral or any part thereof and to
continue the operation of the business of any Loan Party, and to collect all
revenues and profits thereof and apply the same to the payment of all expenses
and other charges of such receivership until the sale or other final disposition
of the Collateral. Each Loan Party hereby consents to the appointment of such
receiver.
(b) Collection of Accounts, Etc. At any time after the occurrence
and during the continuance of an Event of Default notify account debtors that
the Accounts have been assigned to Administrative Agent on behalf of Secured
Parties and that payments shall be made directly to Administrative Agent on
behalf of Secured Parties. Upon the request of Requisite Lenders at any time
after the occurrence and during the continuance of an Event of Default,
Borrowers shall so notify such account debtors. Upon the occurrence of an Event
of Default, Administrative Agent on behalf of Secured Parties shall be entitled,
but not obligated, to collect, compromise, settle and otherwise act with respect
to any Accounts, Contracts or General Intangibles, and shall be authorized to
(i) endorse checks and other instruments, (ii) communicate directly with any
Loan Party's customers or other obligors to collect payments and/or (iii) bring
actions to enforce such collection, and otherwise take any actions necessary to
collect and recover any amounts owing to such Loan Party. Any amounts so
received by Administrative Agent on behalf of Secured Parties shall be held for
the account of Borrowers and may be applied to the Obligations at Administrative
Agent's option, at the direction of Requisite Lenders, but shall not be deemed
to be payment of the Obligations until so applied. Borrower Representative
shall, at Requisite Lenders' request, deliver to Administrative Agent copies of
all original and other documents evidencing or relating to the Accounts,
Contracts or General Intangibles, including without limitation all original
orders, sublease contracts, invoices, shipping receipts, computer records and
databases.
(c) Segregation of Payments. Upon Administrative Agent's request, at
the direction of Requisite Lenders, following an Event of Default, Borrowers
shall immediately deliver to Administrative Agent on behalf of Lenders all
Proceeds received by any Loan Party, in the form received except for Borrower's
endorsement if required. Alternatively, Administrative Agent may, at the
direction of Requisite Lenders, require Borrowers, at the direction of Requisite
Lenders, to immediately deliver, or may require the delivery of, such Proceeds
to a special bank account or post
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office box from which only Administrative Agent on behalf of Secured Parties can
withdraw them. In either case, all such Proceeds and any payments received by
any Loan Party under or in connection with any of the Collateral received by
such Loan Party shall be held by Borrowers in trust for Administrative Agent on
behalf of Secured Parties and shall be segregated from other funds of Borrowers.
Any and all such payments so received by Administrative Agent on behalf of
Secured Parties (whether from Borrowers or otherwise) may, in the sole
discretion of Administrative Agent, be held by Administrative Agent on behalf of
Secured Parties as collateral security for, and/or then or at any time
thereafter applied in whole or in part by Administrative Agent, against all or
any part of the Obligations of Loan Parties in such order as Administrative
Agent may determine in its sole discretion. Any balance of such payments held by
Administrative Agent and remaining after payment in full of all the Obligations
shall be paid over to Borrowers or to any Person lawfully entitled to receive
the same.
(d) Right to Cure. If any Loan Party fails in any material respect
to perform or comply with any of its agreements contained herein or in any of
the other Loan Documents or any Contracts, Administrative Agent may take
whatever actions it may deem appropriate to perform or comply or otherwise cause
performance or compliance with such agreement, all at the risk, cost and expense
of Borrowers.
(e) Set Off. If the unpaid principal amount of the Loans, interest
accrued thereon or any other amount owing by Loan Parties hereunder or under the
Loans shall have become due and payable (by acceleration or otherwise), each
Lender and each Affiliate of a Lender shall have the right, in addition to all
other rights and remedies available to it, without notice to Loan Parties, to
set off against and to appropriate and apply to such due and payable amounts any
debt owing to, and any other funds held in any manner for the account of, any of
the Loan Parties by such Lender or Affiliate. Such right shall exist whether or
not such Lender or Affiliate shall have given notice or made any demand
hereunder or under the Other Loan Documents, whether or not such debt owing to
or funds held for the account of Loan Parties is or are matured or unmatured,
and regardless of the existence or adequacy of any collateral, guaranty or any
other security, right or remedy available to Administrative Agent and Lenders.
Each Loan Party hereby consents to and confirms the foregoing arrangements and
confirms such Lender's and Affiliate's rights of set off.
10.7 APPLICATION OF PROCEEDS.
Any proceeds of any of the Collateral, received by Administrative Agent
through sale or disposition of the Collateral or otherwise, may be applied by
Administrative Agent toward the payment of the Obligations, including expenses
in connection with the Collateral (including reasonable fees and legal expenses)
in such order of application as Administrative Agent at the direction of
Requisite Lenders may from time to time elect.
10.8 DISCONTINUANCE OF PROCEEDINGS.
If Administrative Agent or any Lender should proceed to enforce any right
or remedy under this Agreement or any other Loan Document, and then discontinue
or abandon such proceeding for
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any reason, all rights, powers and remedies of Administrative Agent and Lenders
hereunder shall continue as if no such proceeding had been taken.
10.9 POWER OF ATTORNEY.
For the purpose of carrying out the provisions and exercising the rights,
powers and privileges granted by the Loan Documents, including this Article 10,
each Loan Party hereby irrevocably constitutes and appoints Administrative Agent
for the benefit of Administrative Agent and Lenders its true and lawful
attorney-in-fact to execute, acknowledge and deliver any instruments and do and
perform any acts such as are referred to in the Loan Documents, including this
Article 10, in the name and on behalf of such Loan Party, from time to time in
Administrative Agent's reasonable discretion after the occurrence and during the
continuance of an Event of Default, in accordance with the Loan Documents and
any statute or rule of law. This power of attorney is a power coupled with an
interest and cannot be revoked. Each Loan Party hereby ratifies all that said
attorney-in-fact shall lawfully do or cause to be done by virtue and in
accordance with the terms hereof.
Without limiting the generality of the foregoing, Administrative Agent
may, after the occurrence and during the continuance of an Event of Default, do
the following without notice to or assent by any Loan Party to accomplish the
purposes of this Agreement:
(a) upon failure of such Loan Party to timely pay or discharge taxes
or Liens levied or placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this Agreement or any other
Loan Document, and pay all or any part of the premiums therefor and the costs
thereof;
(b) file any application, petition or other request with the FCC,
PUC or any other Governmental Authority for the purpose of obtaining any consent
or approval from or satisfying any filing or notice requirement of any
Governmental Authority in order to effect a sale or transfer of any or all the
Collateral, or a change in control of, or to permit Administrative Agent to
complete or operate, or both, any Network; and
(c) (i) direct any party liable for any payment under any of the
Contracts or Accounts to make payment of any and all monies due and to become
due thereunder directly to Administrative Agent or as Administrative Agent shall
direct; (ii) in the name of such Loan Party or its own name or otherwise, take
possession of and endorse and collect any checks, drafts, notes, acceptances, or
other instruments for the payment of monies due under, or otherwise receive
payment of and receipt for any and all monies, claims and other amounts due and
to become due at any time in respect of or arising out of any Collateral; (iii)
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction or before
any arbitrator to collect all or any of the Collateral and to enforce any other
right in respect of any Collateral; (v) defend any suit, action or proceeding
brought against such Loan Party with respect to any Collateral; (vi) settle,
compromise or adjust
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any suit, action or proceeding described above upon commercially reasonable
terms under the circumstances and, in connection therewith, give such discharges
or releases as Administrative Agent may reasonably deem appropriate; (vii) cure
any default under any Contract and/or modify and/or assume any such Contract;
and (viii) generally sell, use, operate, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Administrative Agent were the absolute owner thereof for
all purposes, and, at Administrative Agent's option and Loan Parties' expense,
at any time or from time to time after the occurrence and during the continuance
of an Event of Default, all other acts and things that Administrative Agent
reasonably deems necessary to perfect, preserve or realize upon the Collateral
and Administrative Agent's security interest therein on behalf of Secured
Parties, in order to effect the intent of this Agreement and the other Loan
Documents all as fully and effectively as such Loan Party might do.
10.10 REGULATORY MATTERS.
(a) Loan Parties' Cooperation; Consents. Notwithstanding any
provision to the contrary contained herein, Administrative Agent and Lenders
will not exercise any right or remedy under this Agreement that requires prior
FCC or PUC approval without first obtaining such approval. If counsel to
Administrative Agent reasonably determines that the consent of the FCC or PUC is
required in connection with any of the actions that may be taken by
Administrative Agent in the exercise of its rights hereunder or under any of the
other Loan Documents, then Loan Parties, at their sole cost and expense, agree
to use their best efforts to secure such consent and to cooperate with
Administrative Agent in any action commenced by Administrative Agent to secure
such consent. Upon the occurrence and during the continuation of an Event of
Default the applicable Borrower shall promptly execute and/or cause the
execution of all applications, certificates, instruments and other documents and
papers that may be required in order to obtain any necessary governmental
consent, approval or authorization, and if such Borrower fails or refuses to
execute such documents, the clerk of the court with jurisdiction may execute
such documents on behalf of such Borrower.
(b) Loan Parties' Cooperation; Transfers. In connection with the
enforcement by Administrative Agent of any remedies available to it as a result
of any Event of Default and subject to the provisions of Section 10.10(a), Loan
Parties shall join and cooperate fully with Administrative Agent, and with any
receiver or trustee referred to herein and with the successful bidder or bidders
at any foreclosure sale when any of these entities file an application with the
FCC or PUC, or with any necessary federal, state and local governmental
authorities, requesting their prior approval of (i) the operation or abandonment
of all or any portion of the Collateral and (ii) the assignment or transfer to
such entity of all licenses, authorizations and permits issued to any Loan Party
by the FCC, PUC or any such other authorities with respect to Loan Parties'
business and the operation thereof. Loan Parties' cooperation shall include,
without limitation, the furnishing of any information that may be required in
connection with such applications.
(c) Conveyance of Regulatory Authorizations. Subject to any
necessary FCC or PUC approval, each Loan Party agrees to assign, transfer and
convey the Regulatory Authorizations to Administrative Agent (or its designee)
upon Administrative Agent's request following the
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occurrence of an Event of Default, to the extent that any such assignment or
transfer may be deemed necessary to allow Administrative Agent to exercise its
remedies hereunder or under the Loan Documents.
(d) Specific Performance. Each Loan Party recognizes that its
Regulatory Authorizations are unique assets that may have to be transferred in
order for Administrative Agent to adequately realize the value of its security
interests. Each Loan Party further recognizes that a violation of this provision
would result in irreparable harm to Administrative Agent and Lenders for which
monetary damages are not readily ascertainable. Therefore, in addition to any
other remedy that may be available to Administrative Agent and Lenders at law or
in equity, Administrative Agent shall have the remedy of specific performance to
enforce the provisions of this section.
ARTICLE XI
JOINT AND SEVERAL OBLIGATIONS; GUARANTY
11.1 GUARANTY.
Each Borrower hereby agrees that such Borrower is jointly and severally
liable for, and hereby absolutely and unconditionally guarantees to
Administrative Agent and Lenders and their respective successors and assigns,
the full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to
Administrative Agent and Lenders by each other Borrower. In addition, Holdings
hereby absolutely and unconditionally guarantees to Administrative Agent and
Lenders and their respective successors and assigns, the full and prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of
all Obligations owed or hereafter owing to Administrative Agent and Lenders by
each Borrower. Each Loan Party agrees that its guaranty obligation hereunder is
a continuing guaranty of payment and performance and not of collection, that its
obligations under this Article 11 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Article 11 shall be absolute and unconditional, irrespective of, and
unaffected by:
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Loan Party is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Article 11) or any other Loan Document or the waiver or consent by
Administrative Agent and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Administrative Agent and Lenders in respect thereof (including
the release of any such security);
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(d) the insolvency of any Loan Party; or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Loan Party shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.
11.2 WAIVERS BY LOAN PARTIES.
Each Loan Party expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Administrative Agent or Lenders to ▇▇▇▇▇▇▇▇ assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Loan Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Loan Party. It is agreed among each Loan Party,
Administrative Agent and Lenders that the foregoing waivers are of the essence
of the transaction contemplated by this Agreement and the other Loan Documents
and that, but for the provisions of this Article 11 and such waivers,
Administrative Agent and Lenders would decline to enter into this Agreement.
Without limiting the effect of the foregoing, if and to the extent that North
Carolina law is applicable, the Loan Parties hereby expressly waive the
provisions of N.C. Gen. Stat. ss.ss.26-7 through 26-9, inclusive.
11.3 BENEFIT OF GUARANTY.
Each Loan Party agrees that the provisions of this Article 11 are for the
benefit of Administrative Agent and Lenders and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any Loan Party and Administrative Agent or Lenders, the obligations
any Loan Party has under the Loan Documents.
11.4 SUBORDINATION OF SUBROGATION, ETC.
Notwithstanding anything to the contrary in this Agreement or in any other
Loan Document, and except as set forth in Section 11.7, each Loan Party hereby
expressly and irrevocably subordinates to payment of the Obligations any and all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Obligations are
indefeasibly paid in full in cash. Each Loan Party acknowledges and agrees that
this subordination is intended to benefit Administrative Agent and Lenders and
shall not limit or otherwise affect such Loan Party's liability hereunder or the
enforceability of this Article 11 and that Administrative Agent, Lenders and
their respective successors and assigns are intended third-party beneficiaries
of the waivers and agreements set forth in this Section 11.4.
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11.5 ELECTION OF REMEDIES.
If Administrative Agent or any Lender may, under applicable law, proceed
to realize its benefits under any of the Loan Documents giving Administrative
Agent or such Lender a Lien upon any Collateral, whether owned by any Loan Party
or by any other Person, either by judicial foreclosure or by non-judicial sale
or enforcement, Administrative Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Article 11. If, in the exercise of any of its
rights and remedies, Administrative Agent or any Lender shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against
any Loan Party or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, each Loan Party hereby
consents to such action by Administrative Agent or such Lender and waives any
claim based upon such action, even if such action by Administrative Agent or
such Lender shall result in a full or partial loss of any rights of subrogation
which each Loan Party might otherwise have had but for such action by
Administrative Agent or such Lender. Any election of remedies which results in
the denial or impairment of the right of Administrative Agent or any Lender to
seek a deficiency judgment against any Loan Party shall not impair any other
Loan Party's obligation to pay the full amount of the Obligations. In the event
Administrative Agent or any Lender shall bid at any foreclosure or trustee's
sale or at any private sale permitted by law or the Loan Documents,
Administrative Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Administrative Agent
or such Lender but, at the election of Administrative Agent or such Lender,
shall be credited against the Obligations. The amount of the successful bid at
any such sale, whether Administrative Agent, Lender or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Article 11, notwithstanding that any present
or future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Administrative Agent or any Lender might
otherwise be entitled but for such bidding at any such sale.
11.6 LIMITATION.
Notwithstanding any provision herein contained to the contrary, each
Borrower's liability under this Article 11 (which liability is in any event in
addition to amounts for which such Borrower is primarily liable under Article 2)
shall be limited to an amount not to exceed as of any date of determination the
greater of:
(a) the net amount of all Loans advanced to any other Borrower under
this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(b) the amount which could be claimed by Administrative Agent and
Lenders from such Borrower under this Article 11 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law
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after taking into account, among other things, such Borrower's right of
contribution and indemnification from each other Borrower under Section 11.7.
11.7 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS.
(a) To the extent that any Borrower shall make a payment under this
Article 11 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") which, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount which such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable Amount"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim which could then be
recovered from such Borrower under this Article 11 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 11.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this Section 11.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 11.1. Nothing contained in this Section
11.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of Borrowers to which such
contribution and indemnification are owing.
(e) The rights of the indemnifying Borrowers against other Loan
Parties under this Section 11.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
11.8 LIABILITY CUMULATIVE.
The liability of Borrowers under this Article 11 is in addition to and
shall be cumulative with all liabilities of each Borrower to Administrative
Agent and Lenders under this Agreement and
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the other Loan Documents to which such Borrower is a party or in respect of any
Obligations or obligation of the other Borrowers without any limitation as to
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
ARTICLE XII
GENERAL CONDITIONS/MISCELLANEOUS
The following conditions shall be applicable throughout the term of this
Agreement:
12.1 AMENDMENTS, MODIFICATIONS AND WAIVERS.
No amendment, modification or waiver of any provision of this Agreement
nor consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be in writing and signed by the Requisite
Lenders, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, modification, waiver or consent shall, unless in
writing and signed by each Lender affected thereby, do any of the following: (i)
waive any of the conditions specified in Article 6, except as otherwise provided
therein; (ii) increase the Commitments or subject any Lender to any additional
obligations; (iii) reduce the principal of, or interest on, the Loans or any
fees or other amounts payable hereunder; (iv) amend any of the provisions in
Article 2; (v) release any material amount of Collateral except as shall
otherwise be provided herein; (vi) release any Guarantor having a material
amount of assets; (vii) amend the definition of Requisite Lenders; or (viii)
amend this Section 12; and provided, further, that no amendment, modification,
waiver or consent shall, unless in writing and signed by Administrative Agent in
addition to Lenders required above to take such action, affect the rights or
duties of Administrative Agent under this Agreement or the other Loan Documents.
No failure on the part of any Lender or Administrative Agent to exercise, and no
delay in exercising, any right hereunder or under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.
12.2 ADVANCES NOT IMPLIED WAIVERS.
No waiver of the requirements contained in any Loan Document shall be
effective unless in writing duly signed by the required number of Lenders
provided for herein. No Advance hereunder shall constitute a waiver of any of
the conditions of Lenders' obligation to make further Advances. Any Advance made
by any Lender and any sums expended by any Lender pursuant to the Loan Documents
shall be deemed to have been made pursuant to this Agreement, notwithstanding
the existence of an uncured Default or Event of Default. No Advance at a time
when an Event of Default exists shall constitute a waiver of any right or remedy
by Administrative Agent or any Lender existing by reason of such Event of
Default, including the right to accelerate the maturity of the Indebtedness
evidenced by the Loan Documents or to foreclose the Lien on the Collateral or to
refuse to make further advances hereunder.
87
12.3 BUSINESS DAY.
Except as otherwise provided herein, whenever any payment or action to be
made or taken hereunder or under any other Loan Document shall be stated to be
due on a day which is not a Business Day, such payment or action shall be made
or taken on the next Business Day and such extension of time shall be included
in computing interest or fees, if any, in connection with such payment or
action.
12.4 RECORDS.
From time to time Administrative Agent may send Borrower Representative
statements of the unpaid principal amount of the Loans, the unpaid interest
accrued thereon, the interest rate or rates applicable to such unpaid principal
amount, the duration of such applicability, and the amount remaining available
on any Commitment, and each statement shall be deemed correct and conclusively
binding on Borrowers (absent manifest error) unless Borrower Representative
notifies Administrative Agent of an error in the statement in writing within
thirty (30) days of the date on which any such statement is provided to Borrower
Representative.
12.5 NOTICES.
All notices, requests, demands, directions and other communications
(collectively, "notices") required under the provisions of this Agreement or any
other Loan Document shall be in writing (including communication by facsimile
transmission) unless otherwise expressly permitted hereunder and shall be sent
by hand, by registered or certified mail (return receipt requested), by
overnight courier service (maintaining records of receipt) or by facsimile
transmission with confirmation of receipt, in all cases with charges prepaid,
and any such properly given notice shall be effective upon the earliest of (i)
receipt, (ii) when delivered by hand, (iii) the third Business Day after being
mailed, (iv) the following Business Day if sent by overnight courier service or
(v) upon transmission when sent by facsimile. All notices shall be addressed as
follows:
If to any Loan Party, to the Notice Address set forth on Schedule 1, with
copies, if any, as set forth on Schedule 1.
If to Administrative Agent:
General Electric Capital Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: TFS Portfolio Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
88
Attention: Corporate Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender, to the Notice Address set forth on Annex II or in the
Assignment Agreement by which it became a Lender.
All notices shall be sent to the applicable party at the address stated
above or in accordance with the last unrevoked written direction from such party
to the other party hereto, given in accordance with the terms hereof. The giving
of any notice required hereunder may be waived in writing by the party entitled
to receive such notice.
12.6 FCC AND PUC APPROVAL.
The exercise of any rights or remedies hereunder or under any other Loan
Document by Administrative Agent or any Lender that may require FCC or PUC
approval shall be subject to obtaining such approval. Pending the receipt of any
PUC or FCC approval, no Loan Party shall delay, hinder, interfere with or
obstruct the exercise of Administrative Agent's or Lenders' rights or remedies
hereunder or the obtaining of such approvals.
12.7 LENDERS SOLE BENEFICIARY.
All conditions of the obligation of Lenders to make any Advances hereunder
are imposed solely and exclusively for the benefit of Lenders and their
respective assigns; no other Person shall have standing to require satisfaction
of such conditions in accordance with their terms or be entitled to assume that
any Lender will refuse to make any Advances in the absence of strict compliance
with any or all such conditions; and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lenders at any time if, in
their sole discretion, Lenders deem it advisable to do so. Each Lender's sole
obligation hereunder is to make the Advances if and to the extent required by
this Agreement or any other Loan Document.
12.8 LENDER'S REVIEW OF INFORMATION.
Each Loan Party acknowledges and agrees that any review or analysis by
Administrative Agent or any Lender of financial information, operating
information, marketing data or other information provided to Administrative
Agent or such Lender by or on behalf of such Loan Party at any time is and shall
be conducted solely for Administrative Agent's and such Lender's benefit and
internal use and that neither Administrative Agent nor any Lender is under any
duty or obligation to make the results of such review or analysis available to
any Loan Party. No Loan Party is relying, and will not rely, on Administrative
Agent or any Lender for financial or business advice.
89
12.9 NO JOINT VENTURE.
Nothing in this Agreement or any other Loan Document shall be deemed to
constitute any kind of partnership, joint venture or fiduciary relationship
between Administrative Agent, any Lender or any Loan Party.
12.10 SEVERABILITY.
The provisions of this Agreement are intended to be severable. Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
12.11 RIGHTS CUMULATIVE.
All rights, powers and remedies herein given to Administrative Agent and
Lenders are cumulative and not alternative and are in addition to all statutes
or rules of law.
12.12 DURATION; SURVIVAL.
All representations and warranties of any Loan Party contained herein or
made in connection herewith shall survive the making of and shall not be waived
by the execution and delivery of this Agreement and the other Loan Documents,
any investigation by Administrative Agent or any Lender, or the making of any
Advances hereunder. All covenants and agreements of any Loan Party contained
herein shall continue in full force and effect from and after the date hereof so
long as it may borrow hereunder and until payment in full of the Loans, interest
thereon, all fees and all other Obligations of Borrowers. Without limitation, it
is understood that all obligations of Loan Parties to make payments to or
indemnify Lenders shall survive the payment in full of the Loans and of all
other Obligations.
12.13 GOVERNING LAW.
This Agreement, the Notes and each of the other Loan Documents shall be
governed by and construed and enforced in accordance with the law of the State
of New York, except to the extent that the law of jurisdictions where the
Collateral is located may be required to apply to the Collateral.
12.14 COUNTERPARTS.
This Agreement may be executed in any number of counterparts (by facsimile
transmission or otherwise) and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.
90
12.15 SUCCESSORS AND ASSIGNS.
This Agreement and the other Loan Documents shall be binding on and shall
inure to the benefit of each Loan Party, Administrative Agent, Lenders and their
respective successors and assigns (including, in the case of any Loan Party, a
debtor-in-possession on behalf of such Loan Party), except as otherwise provided
herein or therein. No Loan Party may assign, transfer, hypothecate or otherwise
convey its rights, benefits, obligations or duties hereunder or under any of the
other Loan Documents without the prior express written consent of Administrative
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Loan Party without the prior express written consent of
Administrative Agent and Lenders shall be void. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations of
each Loan Party, Administrative Agent and Lenders with respect to the
transactions contemplated hereby and no Person shall be a third-party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
12.16 DISCLOSURES AND CONFIDENTIALITY.
(a) Each Loan Party agrees that it and each of its Affiliates will
obtain Administrative Agent's written consent before using or generating any
press release, advertisement, publicity materials or other publication in which
the name or logo of Administrative Agent or any Lender or any of their
Affiliates is used or may be reasonably inferred and will not distribute any
such materials in the absence of such prior written approval.
(b) Each Loan Party agrees that it will not, directly or indirectly,
disclose to any third party the terms of this Agreement or the other Loan
Documents or prior or future correspondence relating thereto, or the
transactions contemplated hereby, or any other information regarding
Administrative Agent, any Lender or their Affiliates learned by such Loan Party
during the course of negotiation thereof. The term "third party" shall exclude
only the Loan Parties, their Affiliates and their respective attorney(s) and
certified public accountant(s). This Section 12.16(b) shall not restrict the
disclosure of information if such disclosure is required by law, by order of any
court or by the order, rule or regulation of any administrative agency,
including any requirements of the FCC, any PUC or any state or federal
securities commissions (the "Commissions"); provided, however, that, except for
disclosures required by the FCC, PUC or Commissions, Borrower Representative
shall provide Administrative Agent with advance notice of any such required
disclosure of information so that Administrative Agent or the applicable Lender
may seek an appropriate protective order and/or waive compliance with this
Section 12.16(b). Each Loan Party shall not oppose any action taken by
Administrative Agent or any Lender to obtain an appropriate protective order or
other reliable assurance that the information will be accorded confidential
treatment. The obligations set forth in this Section 12.16(b) shall survive the
termination of this Agreement.
(c) Administrative Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Administrative Agent or such
Lender applies to maintaining the confidentiality of its own confidential
information) to maintain as confidential all
91
confidential information provided to them by the Loan Parties and designated as
confidential for a period of two (2) years following receipt thereof, except
that Administrative Agent and each Lender may disclose such information (a) to
Persons employed or engaged by Administrative Agent or such Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any bona fide assignee or participant or potential assignee
or participant that has agreed to comply with the covenant contained in this
Section 12.16 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (b) above); (c) as required or requested
by any Governmental Authority or reasonably believed by Administrative Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, in the opinion of Administrative
Agent's or such Lender's counsel, required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any litigation to which Administrative Agent or such Lender is a party; or (f)
which ceases to be confidential through no fault of Administrative Agent or such
Lender.
(d) The disclosure of information by any of Administrative Agent,
Lenders or Loan Parties will not be restricted under this Agreement if such
information (i) has been or becomes published or is now, or in the future, in
the public domain through (A) no fault of the parties, (B) disclosure other than
unauthorized disclosure by the party to whom the information is disclosed or (C)
disclosure to third parties by the disclosing party without similar restriction;
(ii) is property (other than proposal letters, commitment letters or other
correspondence between Lenders and Loan Parties) within the legitimate
possession of the receiving party prior to disclosure hereunder; (iii)
subsequent to disclosure hereunder, is lawfully received from a third party
having rights therein without restriction of the third party's or receiving
party's rights to disseminate the information and without notice of any
restriction against its further disclosure; (iv) is disclosed with the written
approval of the other party; or (v) is or becomes publicly available free of any
obligation to keep it confidential.
(e) Each Loan Party authorizes Administrative Agent and each Lender
to discuss with and furnish to any Affiliate of Administrative Agent or such
Lender, any government or self-regulatory agency with jurisdiction over
Administrative Agent or such Lender, any other Governmental Authority or,
subject to such Person's agreeing to this Section 12.16, any assignee,
successor, participant, successor, or prospective assignee, successor or
participant, all financial statements, audit reports and other information
pertaining to such Loan Party and/or its Subsidiaries whether such information
was provided by such Loan Party or prepared or obtained by Administrative Agent,
Lenders or third parties. No representation or warranty is made by
Administrative Agent, Lenders or any of their employees, officers, directors or
agents to any existing or prospective assignee, successor or participant
regarding any audit reports or other analyses of any Loan Party that
Administrative Agent or any Lender may distribute, whether such information was
provided by any Loan Party or prepared or obtained by Administrative Agent,
Lenders or third parties, nor shall Administrative Agent, Lenders or any of
their employees, officers, directors or agents be liable to any Person receiving
a copy of such reports or analyses for any inaccuracy or omission contained in
such reports or analyses or relating thereto.
92
(f) Every reference in this Agreement to disclosures of any Loan
Party to any Lender or Administrative Agent (except the Business Plan and
financial statements), to the extent that such references refer or are intended
to refer to disclosures at or prior to the execution of this Agreement, shall be
deemed strictly to refer only to written disclosures delivered to Administrative
Agent or Lenders concurrently with the execution of this Agreement and referred
to specifically in the Loan Documents. The parties intend that such disclosures
are to be limited to those presented in an orderly manner at the time of
executing this Agreement and are not to be deemed to include expressly or
impliedly any disclosures that previously may have been delivered from time to
time to Administrative Agent or any Lender, except to the extent that such
previous disclosures are again presented to Administrative Agent or such Lender
in writing concurrently with the execution of this Agreement.
12.17 JURISDICTION AND VENUE.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE
STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK
FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR THE OBLIGATIONS AND AGREES NOT TO CONTEST VENUE IN ANY
SUCH COURTS. In any such litigation, each Loan Party waives personal service of
any summons, complaint or other process, and agree that the service thereof may
be made by certified or registered mail directly to Borrower Representative at
its address set forth in Section 12.5. The choice of forum set forth herein
shall not be deemed to preclude the enforcement of any judgment obtained in such
forum or the taking of any action under this Agreement to enforce the same in
any appropriate jurisdiction.
12.18 JURY WAIVER.
THE PARTIES HERETO HEREBY KNOWINGLY AND WILLINGLY WAIVE THEIR RIGHTS TO
DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING INVOLVING THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT, THE OBLIGATIONS OR ANY RELATIONSHIP AMONG ADMINISTRATIVE
AGENT, LENDERS AND ANY LOAN PARTY. EACH LOAN PARTY REPRESENTS AND WARRANTS THAT
IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY
AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
12.19 LIMITATION ON LIABILITY.
NONE OF ADMINISTRATIVE AGENT, ANY LENDER OR ANY LOAN PARTY SHALL HAVE ANY
LIABILITY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS FOR SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES OF ANY SORT IN ANY SUIT BROUGHT OR ACTION COMMENCED IN
CONNECTION WITH THIS AGREEMENT, THE
93
OTHER LOAN DOCUMENTS OR THE OBLIGATIONS AND, EXCEPT TO THE EXTENT PROHIBITED BY
LAW, EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES OF ANY SORT OTHER THAN ACTUAL DAMAGES.
12.20 SCHEDULES, EXHIBITS AND ANNEXES.
The Schedules, Exhibits and Annexes attached to this Agreement are an
integral part hereof, and are hereby made a part of this Agreement.
12.21 AGREEMENT TO GOVERN.
In case of any conflict between the terms of this Agreement and any of the
other Loan Documents, the terms of this Agreement shall govern.
12.22 ENTIRE AGREEMENT.
This Agreement, the other Loan Documents and other documents, agreements
and certificates executed by the parties contemporaneously herewith or
subsequent hereto constitute the entire agreement of the parties and supersede
all prior understandings and agreements, written or oral, among the parties
hereto relating to the subject matter hereof. No Loan Party is entering into
this Agreement in reliance on statements or representations made by any Person
other than as set forth herein.
[SIGNATURE PAGE APPEARS ON THE NEXT PAGE.]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President - Business
Development
FIRST UNION NATIONAL BANK, as Syndication
Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
US LEC CORP, as Borrower Representative
and Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
95
US LEC OF FLORIDA INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
US LEC OF NORTH CAROLINA INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
US LEC OF TENNESSEE INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
US LEC OF VIRGINIA L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
96