Exhibit 10.1
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of September 13, 2002
by and among
CHOICE ONE COMMUNICATIONS INC.,
as Guarantor,
the Subsidiaries designated herein, as Borrowers,
the Lenders referred to herein,
WACHOVIA INVESTORS, INC.,
as Administrative Agent and Collateral Agent,
GENERAL ELECTRIC CAPITAL
CORPORATION, as Syndication Agent
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent,
-----------------------------
WACHOVIA SECURITIES, INC.,
as Sole Lead Arranger and Bookrunner of Revolving Credit Loans, Term A Loans,
Term B Loans and Term D Loans.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING INC.,
as Sole Lead Arranger and Bookrunner of Term C Loans
TABLE OF CONTENTS
Page
STATEMENT OF PURPOSE..........................................................1
ARTICLE I DEFINITIONS.......................................................2
SECTION 1.1 Definitions....................................2
SECTION 1.2 General.......................................25
SECTION 1.3 Other Definitions and Provisions..............25
ARTICLE II REVOLVING CREDIT FACILITY........................................25
SECTION 2.1 Revolving Credit Loans........................25
SECTION 2.2 [Intentionally Omitted].......................25
SECTION 2.3 [Intentionally Omitted].......................26
SECTION 2.4 Repayment of Revolving Credit Loans...........26
SECTION 2.5 Revolving Credit Notes........................27
SECTION 2.6 Permanent Reduction of the Revolving Credit
Commitmen..................................27
SECTION 2.7 Termination of Availability Under Revolving
Credit Facility............................28
ARTICLE III LETTER OF CREDIT FACILITY........................................28
SECTION 3.1 L/C Commitment................................28
SECTION 3.2 Procedure for Issuance of Letters of Credit...28
SECTION 3.3 Commissions and Other Charges.................28
SECTION 3.4 L/C Participations............................28
SECTION 3.5 Reimbursement Obligation of the Borrower......28
SECTION 3.6 Obligations Absolute..........................28
SECTION 3.7 Effect of Application.........................28
ARTICLE IV TERM LOAN FACILITY...............................................28
SECTION 4.1 Term Loans....................................28
SECTION 4.2 Procedure for Advances of Term Loans..........29
SECTION 4.3 Scheduled Repayment of Term Loans.............30
SECTION 4.4 Excess Term Loans.............................32
SECTION 4.5 Commitment Reduction; Prepayments of Term
Loans......................................32
SECTION 4.6 Term Notes....................................34
ARTICLE V GENERAL LOAN PROVISIONS..........................................35
SECTION 5.1 Interest......................................35
SECTION 5.2 Notice and Manner of Conversion or Continuation
of Loans...................................38
SECTION 5.3 Agents' and Other Fees........................38
SECTION 5.4 Manner of Payment.............................38
SECTION 5.5 Crediting of Payments and Proceeds............39
SECTION 5.6 Adjustments...................................40
SECTION 5.7 Nature of Obligations of Lenders Regarding
Extensions of Credit; Assumption by the
Administrative Agent.......................40
SECTION 5.8 Changed Circumstances.........................41
SECTION 5.9 Indemnity.....................................43
SECTION 5.10 Capital Requirements..........................43
SECTION 5.11 Taxes.........................................44
SECTION 5.12 Security......................................45
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING.....................45
SECTION 6.1 Closing.......................................45
SECTION 6.2 Conditions to Closing.........................46
SECTION 6.3 Conditions to All Extensions of Credit........51
ARTICLE VII REPRESENTATIONS AND WARRANTIES...................................51
SECTION 7.1 Representations and Warranties................51
SECTION 7.2 Survival of Representations and Warranties,
Etc.......................................60
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES...............................60
SECTION 8.1 Financial Statements and Projections..........61
SECTION 8.2 Officer's Compliance Certificate..............62
SECTION 8.3 Accountants' Certificate......................62
SECTION 8.4 Other Reports.................................63
SECTION 8.5 Notice of Litigation and Other Matters........64
SECTION 8.6 Accuracy of Information.......................65
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ARTICLE IX AFFIRMATIVE COVENANTS............................................65
SECTION 9.1 Preservation of Corporate Existence and Related
Matters...................................65
SECTION 9.2 Maintenance of Property.......................66
SECTION 9.3 Insurance.....................................66
SECTION 9.4 Accounting Methods and Financial Records......66
SECTION 9.5 Payment and Performance of Obligations........66
SECTION 9.6 Compliance With Laws and Approvals............66
SECTION 9.7 Environmental Laws............................66
SECTION 9.8 Compliance with ERISA.........................67
SECTION 9.9 Compliance With Agreements....................67
SECTION 9.10 Conduct of Business...........................67
SECTION 9.11 Visits and Inspections........................68
SECTION 9.12 Additional Subsidiaries and Collateral;
Post-Closing Date Real Estate Matters....68
SECTION 9.13 [Reserved]....................................70
SECTION 9.14 Transfer of Capital Contributions.............70
SECTION 9.15 Hedging Agreements............................70
SECTION 9.16 Further Assurances............................70
SECTION 9.17 Use of Proceeds...............................70
SECTION 9.18 Company Covenants Relating to Preferred
Equity..................................70
SECTION 9.19 [Reserved]....................................70
SECTION 9.20 [Reserved]....................................70
SECTION 9.21 Limited Subsidiary PUC Authorization..........71
SECTION 9.22 Board Observer................................71
SECTION 9.23 SEC Approvals.................................71
ARTICLE X FINANCIAL COVENANTS..............................................72
SECTION 10.1 ...............................................72
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ARTICLE XI NEGATIVE COVENANTS...............................................73
SECTION 11.1 Limitations on Debt............................73
SECTION 11.2 Limitations on Guaranty Obligations............75
SECTION 11.3 Limitations on Liens...........................75
SECTION 11.4 Limitations on Loans, Advances, Investments
and Acquisitions..........................76
SECTION 11.5 Limitations on Mergers and Liquidation.........77
SECTION 11.6 Limitations on Sale of Assets..................78
SECTION 11.7 Limitations on Dividends and Distributions.....78
SECTION 11.8 Limitations on Exchange and Issuance of
Capital Stock.............................79
SECTION 11.9 Transactions with Affiliates...................80
SECTION 11.10 Certain Accounting Changes.....................80
SECTION 11.11 Amendments; Payments and Prepayments of
Subordinated Debt.........................80
SECTION 11.12 Charter Documents..............................80
SECTION 11.13 Restrictive Agreements.........................80
SECTION 11.15 Financial Advisors.............................81
SECTION 11.16 Formation of Subsidiaries......................81
SECTION 11.17 Lease, IRU and Interconnection Agreement
Obligations...............................81
ARTICLE XIIDEFAULT AND REMEDIES..............................................81
SECTION 12.1 Events of Default..............................81
SECTION 12.2 Remedies.......................................85
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver;
etc.......................................86
ARTICLE XIII THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT...................86
SECTION 13.1 Appointment....................................86
SECTION 13.2 Delegation of Duties...........................86
SECTION 13.3 Exculpatory Provisions.........................87
SECTION 13.4 Reliance.......................................87
SECTION 13.5 Notice of Default..............................88
SECTION 13.6 Non-Reliance on the Administrative Agent,
Collateral Agent and Other Lenders........88
SECTION 13.7 Indemnification................................89
SECTION 13.8 The Administrative Agent or Collateral Agent in
Its Individual Capacity...................89
SECTION 13.9 Resignation of the Administrative Agent or
Collateral Agent; Successor Administrative
Agent or Collateral Agent.................89
SECTION 13.10 Other Agents...................................90
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ARTICLE XIV UNCONDITIONAL GUARANTY..........................................90
SECTION 14.1 Guaranty of Obligations........................90
SECTION 14.2 Nature of Guaranty.............................90
SECTION 14.3 Demand by the Administrative Agent.............91
SECTION 14.4 Waivers........................................91
SECTION 14.5 Modification of Loan Documents, etc............92
SECTION 14.6 Reinstatement..................................92
SECTION 14.7 No Subrogation.................................93
ARTICLE XV MISCELLANEOUS.....................................................93
SECTION 15.1 Notices........................................93
SECTION 15.2 Expenses; Indemnity............................94
SECTION 15.3 Set-off........................................95
SECTION 15.4 Governing Law..................................95
SECTION 15.5 Consent to Jurisdiction........................95
SECTION 15.6 Waiver of Jury Trial...........................96
SECTION 15.7 Reversal of Payments...........................96
SECTION 15.8 Injunctive Relief; Punitive Damages............96
SECTION 15.9 Accounting Matters.............................97
SECTION 15.10 Successors and Assigns; Participations.........97
SECTION 15.11 Amendments, Waivers and Consents..............100
SECTION 15.12 Performance of Duties.........................102
SECTION 15.13 All Powers Coupled with Interest..............102
SECTION 15.14 Survival of Indemnities.......................103
SECTION 15.15 Titles and Captions...........................103
SECTION 15.16 Severability of Provisions....................103
SECTION 15.17 Counterparts..................................103
SECTION 15.18 Term of Agreement.............................103
SECTION 15.19 Inconsistencies with Other Documents;
Independent Effect of Covenants............104
SECTION 15.20 Company as Agent for Borrowers; Obligations Joint
and Several; Agreement for Contribution....104
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EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term A Note
Exhibit A-3 - Form of Term B Note
Exhibit A-4 - Form of Term C Note
Exhibit A-5 - Form of Term D Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Security Agreement
Exhibit I - Form of Pledge Agreement
Exhibit J - Form of Joinder Agreement
Exhibit K - Form of Intercreditor Agreement
Exhibit L - Form of Preferred Equity Document
Exhibit M-1 - Form of Bridge Loan Security Agreement
Exhibit M-2 - Form of Bridge Loan Pledge Agreement
Exhibit N - Form of Subordinated Upstream Guaranty
Exhibit O - Form of Bridge Loan Amendment
Exhibit P-1 - Form of Company Term C Warrants (MSDWCP)
Exhibit P-2 - Form of Company Term C Warrants (Bridge Lenders)
Exhibit P-3 - Form of Company New Bridge Warrants
SCHEDULES
Schedule 1.1(a) - Lenders Addresses and Commitments
Schedule 1.1(b) - Interconnection Leases
Schedule 1.1(c) - Permitted Markets
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(r) - List of Real Property
Schedule 7.1(t) - Debt and Guaranty Obligations
Schedule 7.1(u) - Litigation
Schedule 7.1(w) - Communications Licenses
Schedule 9.3 - Insurance Coverage
Schedule 11.3 - Existing Liens
Schedule 11.4(a) - Existing Loans, Advances and Investments
Schedule 11.4(e) - Existing Employee Loans, etc.
vi
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September
13, 2002, by and among CHOICE ONE COMMUNICATIONS INC., a Delaware corporation,
as Guarantor, its Subsidiaries listed on the signature pages hereto and any
additional Subsidiaries joined hereto, as Borrowers, the Lenders who are or may
become a party to this Agreement, WACHOVIA INVESTORS, INC. (f/k/a First Union
Investors, Inc.), as Administrative Agent and Collateral Agent, GENERAL ELECTRIC
CAPITAL CORPORATION, as Syndication Agent, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING,
INC., as Documentation Agent.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated as of October 14, 1998 (the
"INITIAL CREDIT AGREEMENT"), by and among the Company, as guarantor, the
Subsidiaries of the Company party thereto as borrowers (the "INITIAL
BORROWERS"), the lenders party thereto, and the agents listed therein, such
lenders extended certain credit facilities to the Initial Borrowers pursuant to
the terms thereof.
Pursuant to the Amended and Restated Credit Agreement, dated as of
November 3, 1999 (the "FIRST AMENDED AND RESTATED CREDIT AGREEMENT"), the
parties thereto agreed to modify the Initial Credit Agreement in certain
respects as reflected in the First Amended and Restated Credit Agreement.
Pursuant to the Second Amended and Restated Credit Agreement, dated as
of August 1, 2000 (as amended or otherwise modified prior to August 13, 2002,
the "SECOND AMENDED AND RESTATED CREDIT AGREEMENT"), the parties thereto agreed
to modify the First Amended and Restated Credit Agreement to provide for, among
other things, the increase of the aggregate commitment thereunder from
$150,000,000 to $350,000,000 and the addition of a term B loan facility, all as
set forth in the Second Amended and Restated Credit Agreement.
Pursuant to the Consent and Waiver to the Credit Agreement, dated as of
August 13, 2002, as extended by the Extension Letter dated as of September 6,
2002 and by Section 15.11 of this Agreement (the "CONSENT AND Waiver"), the
Guarantor and the Borrowers have requested, and, subject to the terms and
conditions set forth in the Consent and Waiver, the agents and lenders party to
the Second Amended and Restated Credit Agreement have agreed, to, among other
things, waive the default arising out of the Borrowers' failure to comply with
the requirements of Section 10.1(c) of the Second Amended and Restated Credit
Agreement (the minimum revenue covenant) for the fiscal quarter ended June 30,
2002; PROVIDED that such waiver shall cease to be effective unless the
modifications to the Second Amended and Restated Credit Agreement contemplated
hereby and certain other conditions set forth in the Consent and Waiver are
satisfied on or prior to September 13, 2002.
In addition, pursuant to the Consent and Waiver and the Term C Lender
Commitment Letter, the Guarantor and the Borrowers have requested, and, subject
to the terms and conditions herein, the Agents and the Lenders have agreed, to
modify the Second Amended and Restated
Credit Agreement to provide for, among other things, (a) the increase
of the amount of the credit facility from $350,000,000 to $398,875,000, (b) the
addition of the Term C Loan Facility, (c) the addition of the Term D Loan
Facility and (d) certain changes to the financial and other covenants and other
provisions of the Second Amended and Restated Credit Agreement, all as set forth
herein.
For ease of reference, the parties hereto have agreed that the Second
Amended and Restated Credit Agreement and certain other Loan Documents should be
amended and restated in order to reflect such modifications.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the Second
Amended and Restated Credit Agreement is hereby amended and restated in its
entirety, and the parties hereto hereby agree, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following terms when used in this
Agreement (including the Statement of Purpose contained herein) shall have the
meanings assigned to them below:
"ACQUISITION DOCUMENTS" means the acquisition agreement and all of the
documents executed and delivered by the Company, US Xchange, its shareholders
and subsidiaries at the closing of the US Xchange Acquisition pursuant to such
acquisition agreement.
"ADMINISTRATIVE AGENT" means Wachovia in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"ADMINISTRATIVE AGENT'S OFFICE" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
15.1(c).
"AFFILIATE" means, with respect to any Person, any other Person (other
than, with respect to the Company, any of its Subsidiaries) which directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such first Person or any of its Subsidiaries. For
the purposes of the preceding sentence, the term "control" means (a) the power
to vote five percent (5%) or more of the securities or other equity interests of
a Person having ordinary voting power, or (b) the possession, directly or
indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
2
"AGENTS" means the collective reference to the Administrative Agent,
Documentation Agent and Syndication Agent.
"AGGREGATE COMMITMENT" means the maximum aggregate amount of the
Lenders' Commitments hereunder, as such amount may be reduced or modified at any
time or from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be Three Hundred Ninety-Eight Million Eight Hundred
Seventy-Five Thousand Dollars ($398,875,000), of which Three Hundred Fifty
Million Dollars ($350,000,000) has already been utilized pursuant to the Second
Amended and Restated Credit Agreement (representing all of the Commitments
available thereunder).
"AGGREGATE EXPOSURE" means, at any time, the sum of (a) the aggregate
principal amount of all Loans and L/C Obligations outstanding hereunder, PLUS
(b) an amount equal to the aggregate unused amount of the Commitment for all
Lenders.
"AGREEMENT" means the Initial Credit Agreement, as amended and restated
prior to the Closing Date and by this Third Amended and Restated Credit
Agreement, and as the same may be further amended, restated, supplemented or
otherwise modified from time to time.
"APPLICABLE LAW" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"APPLICABLE MARGIN" shall have the meaning assigned thereto in Section
5.1(c).
"APPLICATION" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"APPROVED BUDGET" means the annual budget of the Company and its
Subsidiaries prepared in accordance with this Agreement, and approved by the
Board of Directors of the Company, and for the period from and after the Closing
Date until the end of 2002 means the revenue and expense spread sheets and
related materials for 2002 included in the 2002 Business Plan referred to below
in the Approved Business Plan.
"APPROVED BUSINESS PLAN" means each of the business plans for the
Company and its Subsidiaries prepared on a city-by-city basis in accordance with
this Agreement and approved by the Board of Directors of the Company, and for
the period from and after the Closing Date until the end of 2002 means the 10
year business plan entitled Financial Model Q2 distributed to PWC (Business
Recovery Services) on behalf of the Lenders on August 22, 2002 (the "2002
BUSINESS PLAN").
3
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned thereto in
Section 15.10.
"AUTHORIZED CAPITAL MARKETS TRANSACTION" means one or more capital
markets transactions which the Bridge Lenders or their affiliates present to the
Company and the Borrowers (with the consent of the Required Lenders, such
consent not to be unreasonably withheld, it being understood that it will not be
reasonable for the Required Lenders to withhold their consent with respect to
transactions described under clause (a) below if the terms of such transactions
are no less favorable to the Company and the Borrowers as the terms of the
Bridge Notes) consisting of any of, or a combination of, (a) subordinated notes
with a market rate of interest (but in no event shall the interest rate be
greater than 13.5%), a maturity date after the maturity date of the Bridge Notes
(as in effect on the Closing Date), an accrual period terminating no earlier
than the termination of the accrual period under the Bridge Notes (as in effect
on the Closing Date) and subject to other customary terms for such a note
issuance, including standard high-yield debt covenants and call protection (but
which by its terms may provide that the covenants therein will not interfere
with then existing contractual rights of the holders of Preferred Equity in
accordance with the terms thereof, including, without limitation, any right of
mandatory redemption (subject, in any event, to the other limitations
contemplated by the Preferred Equity Documents or by this Agreement on such
redemptions and such other rights)), (b) convertible debt issuances with an
interest rate no greater than 8%, a maturity date after the maturity date of the
Bridge Notes, an accrual period terminating no earlier than the termination of
the accrual period under the Bridge Notes, a conversion premium of at least 20%
over the Fair Market Value (as defined in the Company New Bridge Warrants) of
the Company's common stock (which Fair Market Value must be at least $6.25 per
share of common stock (such amount to be adjusted on the same basis as the
adjustments specified in Section 8(a) of the Company New Bridge Warrants)) and
subject to other customary terms for an issuance of convertible debt in a
transaction registered under the Securities Act of 1933 or consummated pursuant
to Rule 144A thereunder (but which by its terms may provide that the covenants
therein will not interfere with then existing contractual rights of the holders
of Preferred Equity in accordance with the terms thereof, including, without
limitation, any right of mandatory redemption (subject, in any event, to the
other limitations contemplated by this Agreement on such redemptions and such
other rights)) or (c) equity issuances at a price no less than $6.25 per common
share and subject to other customary terms for an issuance of equity under the
Securities Act of 1933 or consummated pursuant to Rule 144A thereunder which,
taken together, generate net cash proceeds to the Company of at least $100
million, PROVIDED that any Authorized Capital Markets Transaction may be
undertaken pursuant to any other available exemption from the registration under
the Securities Act of 1933 as long as its terms comply with the provisions above
and PROVIDED FURTHER that no capital markets transaction or transactions shall
constitute an Authorized Capital Markets Transaction if the consummation of such
capital markets transactions would violate this Agreement or the Bridge
Financing Agreement as in effect on the date hereof or cause the Company to
violate any rules of any national securities exchange or automated quotation
system, if any, upon which the shares of common stock shall be so listed.
4
"AVAILABLE CASH" means, with respect to any specified Person and its
Subsidiaries, for any period, the sum of the following determined on a
Consolidated basis, without duplication: (a) the unused portion of the Aggregate
Commitment then in effect, (b) the sum of all amounts that would be included, in
accordance with GAAP, as cash, restricted cash or Cash Equivalents on a
Consolidated balance sheet of the Borrowers and their Subsidiaries and (c) the
unused portion of any irrevocably committed debt or equity financing other than
the Aggregate Commitment.
"AVAILABLE COMMITMENT" means, as to any Lender at any time, an amount
equal to (a) such Lender's Commitment LESS (b) such Lender's Extensions of
Credit.
"BASE RATE" means, at any time, the higher of (a) the Prime Rate and
(b) the sum of (i) the Federal Funds Rate PLUS (ii) 1/2 of 1%; each change in
the Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"BASE RATE LOAN" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 5.1(a).
"BENEFITED LENDER" shall have the meaning assigned thereto in Section
5.6.
"BORROWERS" means the Subsidiaries of the Company set forth on SCHEDULE
7.1(B) and listed on the signature pages hereto, together with any additional
Subsidiary that becomes a Borrower hereunder pursuant to Section 9.12, each in
its capacity as borrower hereunder.
"BRIDGE AGENT" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., in its
capacity as administrative agent under the Bridge Loan Agreement, together
with its duly appointed successors pursuant thereto.
"BRIDGE COLLATERAL AGENT" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., in
its capacity as collateral agent for purposes of the Bridge Loan Security
Agreement and the Bridge Loan Pledge Agreement, together with its duly appointed
successors pursuant thereto.
"BRIDGE LENDERS" means the banks, financial institutions and other
lenders party from time to time to the Bridge Loan Agreement.
"BRIDGE LOANS" means the $178,302,630.11 of initial accreted value of
senior rollover loans made to the Company pursuant to the Bridge Loan Agreement.
5
"BRIDGE LOAN AGREEMENT" means the bridge financing agreement, dated as
of August 1, 2000, by and among the Company, the lenders party thereto and the
Bridge Agent, as amended from time to time in accordance with the terms of this
Agreement, including by the Third Amendment to the Bridge Financing Agreement
dated as of September 13, 2002, a true and complete copy of the form of which is
attached hereto as EXHIBIT O, and as otherwise amended as permitted hereby,
including as replaced by the indenture relating to the senior notes pursuant to
the terms of the Registration Rights Agreement dated as of November 9, 2001 by
and among the Company and the Bridge Lenders, so long as such indenture contains
the same economic terms as the aforesaid bridge financing agreement as amended
by such Third Amendment, contains covenants and defaults that are no more
restrictive on the Company and its Subsidiaries than the aforesaid bridge
financing agreement as amended by such Third Amendment and is otherwise no more
adverse to the Company and its Subsidiaries or the Lenders than such bridge
financing agreement as amended by such Third Amendment (a "PERMITTED
INDENTURE").
"BRIDGE LOAN DOCUMENTS" means the Bridge Loan Agreement, the Bridge
Notes, the Bridge Loan Security Agreement, the Bridge Loan Pledge Agreement, the
Subordinated Upstream Guaranty, the Registration Rights Agreement dated as of
November 9, 2001 by and among the Company and the Bridge Lenders, and all of the
documents executed and delivered in connection therewith, in each case as
amended as permitted hereby.
"BRIDGE LOAN PLEDGE AGREEMENT" means the pledge agreement dated as of
September 13, 2002, by the Company in favor of the Bridge Collateral Agent for
the benefit of the Bridge Lenders, and subject to the Intercreditor Agreement,
substantially in the form of EXHIBIT M-2.
"BRIDGE LOAN SECURITY AGREEMENT" means the security agreement, dated as
of September 13, 2002, by the Borrowers in favor of the Bridge Collateral Agent
for the benefit of the Bridge Lenders, and subject to the Intercreditor
Agreement, substantially in the form of EXHIBIT M-1.
"BRIDGE NOTES" means the rollover promissory notes issued by the
Company pursuant to the Bridge Loan Agreement, including any successor
instruments into which the rollover promissory notes are convertible or
exchangeable pursuant to the Registration Rights Agreement dated as of November
9, 2001 by and among the Company and the Bridge Lenders, such successor
instruments to be issued pursuant to a Permitted Indenture (as defined in the
definition of Bridge Loan Agreement) and to contain the same economic terms as
such rollover promissory notes.
"BUSINESS DAY" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
6
"CASH EQUIVALENTS" shall have the meaning assigned thereto in Section
11.4(b).
"CAPITAL EXPENDITURES" means, with respect to any specified Person and
its Subsidiaries for any period, the aggregate cost of all PP&E acquired by such
Person and/or its Subsidiaries during such period, including in any event
capitalized labor but excluding in any event IRU's, each as determined in
accordance with GAAP.
"CAPITAL LEASE" means, with respect to the Company and its
Subsidiaries, or the Borrowers and their Subsidiaries, as applicable, any lease
of any property that should, in accordance with GAAP, be classified and
accounted for as a capital lease on a Consolidated balance sheet thereof.
"CHANGE IN CONTROL" shall have the meaning assigned thereto in Section
12.1(i).
"CLEC" means a competitive local exchange carrier under applicable
Communications Law.
"CLOSING DATE" means the date of this Agreement or such later Business
Day upon which each condition described in Section 6.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent in its
reasonable discretion.
"CODE" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"COLLATERAL AGENT" means Wachovia in its capacity as collateral agent
for purposes of the Mortgages and the pledge collateral described in the Bridge
Loan Pledge Agreement, together with any duly appointed successors thereto.
"COMMITMENT" means, as to any Lender, the sum of such Lender's
Revolving Credit Commitment, Term A Loan Commitment, Term B Loan Commitment,
Term C Loan Commitment and Term D Loan Commitment as set forth opposite such
Lender's name on SCHEDULE 1.1(A) hereto, as the same may be reduced or increased
at any time or from time to time pursuant to the terms hereof.
"COMMUNICATIONS LAW" means the Communications Act of 1934, as amended,
and all rules and regulations thereunder, or any successor statute or statutes
thereto (including, without limitation, the Telecommunications Act of 1996) and
all rules and regulations thereunder, and all rules and regulations of the FCC,
any applicable PUC or any other applicable Governmental Authority related to the
provision of telecommunication or broadcast services, each as amended or
supplemented from time to time.
"COMMUNICATIONS LICENSE" means any license for the provision of CLEC
telephony service, and any other license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued by
FCC or other applicable Governmental Authority, including, without limitation,
any PUC, each of the foregoing authorizing or permitting the acquisition,
construction or operation of Network Facilities or any other system for the
provision of CLEC telephony service.
7
"COMPANY" means Choice One Communications Inc., a Delaware
corporation, and its successors and permitted assigns.
"COMPANY EXISTING WARRANTS" means the warrants issued by the Company
prior to the Closing Date to the Bridge Lenders to purchase shares of common
stock of the Company, as amended as of the Closing Date and as otherwise
permitted hereby.
"COMPANY FIXED CHARGES" means, for any period, the sum of the following
determined on a Consolidated basis, without duplication, for the Company and its
Subsidiaries in accordance with GAAP; (a) scheduled principal and cash interest
payments, (b) Capital Expenditures, less capitalized labor expenses, (c) Capital
Lease payments, (d) payments made by the Company and the Borrowers in respect of
any IRU, (e) cash taxes and (f) cash dividends.
"COMPANY FIXED CHARGES RATIO" means, with respect to the Company and
its Subsidiaries on a Consolidated basis, as of the last day of any fiscal
quarter, the ratio of (a) EBITDA thereof for the fiscal quarter ending on such
date to (b) Company Fixed Charges for the fiscal quarter ending on such date.
"COMPANY INTEREST COVERAGE RATIO" means, with respect to the Company
and its Subsidiaries on a Consolidated basis, as of the last day of any fiscal
quarter, the ratio of (a) EBITDA thereof for the fiscal quarter ending on such
date to (b) cash Interest Expense thereof for the fiscal quarter ending on such
date.
"COMPANY LEVERAGE RATIO" means with respect to the Company and its
Subsidiaries on a Consolidated basis as of any date of determination, the ratio
of (a) Total Consolidated Debt thereof as of such date to (b) EBITDA of the
Borrowers for the six-month period ending on the last day of the most recently
ended fiscal quarter on or prior to such date MULTIPLIED BY two (2).
"COMPANY NEW BRIDGE WARRANTS" means the warrants to be issued by the
Company to the Bridge Lenders to purchase shares of common stock of the Company,
substantially in the form of EXHIBIT P-3 hereto.
"COMPANY NEW WARRANTS" means, collectively, the Company New Bridge
Warrants and the Company Term C Warrants.
"COMPANY TERM C WARRANTS" means the warrants to be issued by the
Company to each of the Term C Lenders on the Closing Date to purchase shares of
common stock of the Company, substantially in the form of EXHIBIT P-1 (in the
case of Company Term C Warrants issued to MSDWCP) or EXHIBIT P-2 (in the case of
all other Company Term C Warrants).
"CONSOLIDATED" means, when used with reference to financial statements
or financial statement items of the Company and its Subsidiaries, or the
Borrowers and their Subsidiaries, as applicable, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP (it being understood that any references to the Borrowers and their
Subsidiaries on a Consolidated basis shall not include the Company
notwithstanding any requirements of GAAP to the contrary).
8
"CREDIT FACILITY" means, collectively, the Revolving Credit Facility,
the Term A Loan Facility, the Term B Loan Facility, the Term C Loan Facility,
the Term D Loan Facility and the L/C Facility.
"DSL" means technology which permits broadband transmission over copper
telephone lines, allowing for the provision of high speed data services.
"DEBT" means, with respect to the Company and its Subsidiaries or the
Borrowers and their Subsidiaries, as applicable, at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including but
not limited to obligations evidenced by bonds, debentures, notes or other
similar instruments of any such Person, (b) all obligations to pay the deferred
purchase price of property or services of any such Person (including, without
limitation, all obligations under non-competition agreements), except for trade
payables arising in the ordinary course of business not more than ninety (90)
days past due or subject to a bona fide dispute and except for all obligations
in respect of any IRU, (c) all obligations of any such Person as lessee under
Capital Leases, (d) all Debt of any other Person secured by a Lien on any asset
of any of the Company and its Subsidiaries or the Borrowers and their
Subsidiaries, as applicable, (e) all Guaranty Obligations of any such Person,
except as permitted by Section 11.2(c), (d), (f) and (g), all obligations,
contingent or otherwise, of any such Person relative to the stated amount of
letters of credit, whether or not drawn, including without limitation any
Reimbursement Obligation, and banker's acceptances issued for the account of any
such Person, (g) all obligations of any such Person to redeem, repurchase,
exchange, defease or otherwise make payments in respect of capital stock or
other securities of such Person (other than such obligations pursuant to the
Preferred Equity Documents) and (h) all net termination payments (or other net
obligations) owed by any such Person pursuant to Hedging Agreements.
"DEFAULT" means any of the events specified in Section 12.1, which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"DEPOSIT ACCOUNT" means a deposit account (as now or hereafter defined
in the UCC) of the Company or any of its Subsidiaries, including, without
limitation, those listed on SCHEDULE 7.1(AA) and any lockbox, demand, time,
savings, passbook or like account maintained with a depositary institution.
"DISPUTES" shall have the meaning set forth in Section 15.6.
"DOCUMENTATION AGENT" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., in
its capacity as Documentation Agent.
"DOLLARS" OR "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
9
"EBITDA" means, with respect to any specified Person and its
Subsidiaries, for any period, the sum of the following determined on a
Consolidated basis, without duplication, in accordance with GAAP: (a) Net Income
for such period PLUS (b) the sum of the following to the extent deducted in
determining Net Income: (i) income, property and franchise taxes, (ii) Interest
Expense, (iii) amortization, depreciation and other non-cash charges LESS (c)
(i) capitalized labor, (ii) interest income and (iii) any extraordinary gains.
EBITDA shall be adjusted in a manner reasonably satisfactory to the
Administrative Agent to include, on a pro forma basis, as of the first day of
any calculation period any acquisition consummated during such period in
accordance with this Agreement and exclude, on a pro forma basis, as of the
first day of any calculation period any Subsidiary or assets sold in accordance
with this Agreement during such period.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $200,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender) or an affiliate of
a Lender, (e) the successor (whether by transfer of assets, merger or otherwise)
to all or substantially all of the commercial lending business of the assigning
Lender, (f) in the case of any assignment by any Person included in MSDWCP, any
other Person included in MSDWCP or, in connection with the winding up of any
such Person, any limited partner of any Person included in MSDWCP, or (g) any
other Person that extends or invests in credit of the type extended hereunder
that has been approved in writing as an Eligible Assignee by the Administrative
Agent and, unless a Default has occurred and is continuing at the time any
assignment is effected pursuant to Section 15.10, the Company, such approvals of
the Administrative Agent and (if required) the Company not to be unreasonably
withheld or delayed.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrowers or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrowers or any current or
former ERISA Affiliate.
"ENVIRONMENTAL LAWS" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
10
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA AFFILIATE" means any Person who together with the Company is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" means any of the events specified in Section 12.1;
PROVIDED, that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"EXCESS CASH FLOW" means, with respect to the Company and its
Subsidiaries for any period, the sum of the following for such period on a
Consolidated basis (a) EBITDA thereof MINUS (b) the sum of (i) Company Fixed
Charges, PLUS (ii) to the extent not already included in Company Fixed Charges,
all optional prepayments of the Term Loans and any other Debt of the Company and
its Subsidiaries which does not permit the reborrowing of amounts prepaid, plus
(minus) (iii) any decrease (increase) in Working Capital.
"EXCESS PROCEEDS" shall have the meaning assigned thereto in Section
4.5(c)(vi).
"EXTENSIONS OF CREDIT" means, as to any Lender at any time, (a) an
amount equal to the sum of (i) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (ii) such Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then outstanding and (iii)
the aggregate principal amount of all Term Loans made by such Lender then
outstanding, or (b) the making of any Loan or participation in any Letter of
Credit by such Lender, as the context requires.
"FCC" means the Federal Communications Commission or any successor
Governmental Authority.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"FEDERAL FUNDS RATE" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
11
"FISCAL YEAR" means the fiscal year of the Borrowers and their
Subsidiaries ending on December 31.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Company and its Subsidiaries and the Borrowers and their
Subsidiaries, as applicable, throughout the period indicated.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" means the Company in its capacity as guarantor under the
Guaranty.
"GUARANTY" means the unconditional guaranty of the Guaranteed
Obligations by the Company under Article XIV hereof.
"GUARANTEED OBLIGATIONS" shall have the meaning assigned thereto in
Section 14.1.
"GUARANTY OBLIGATION" means, with respect to the Company and its
Subsidiaries, or the Borrowers and their Subsidiaries, as applicable, at any
date and without duplication, any obligation, contingent or otherwise, of any
such Person pursuant to which such Person has directly or indirectly guaranteed
any Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of any such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement condition or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); PROVIDED, that the term Guaranty Obligation shall not include
endorsements for collection or deposit in the ordinary course of business.
12
"HAZARDOUS MATERIALS" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release of which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"HEDGING AGREEMENT" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrowers, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
"INITIAL CREDIT AGREEMENT" shall have the meaning assigned thereto in
the Statement of Purpose.
"INTERCONNECTION AGREEMENT" means any interconnection agreement entered
into by any Borrower, and any other agreement entered into thereby with respect
to collocation of Telecommunications Equipment, in each case with another
telecommunications provider.
"INTERCONNECTION LEASE" means any real property lease executed by the
Company or any Borrower for the sole purpose of collocating Telecommunications
Equipment in connection with any Interconnection Agreement relating to the
collocation sites described on SCHEDULE 1.1(B); PROVIDED, that in no event shall
the aggregate number of business lines to be served from such leased real
property exceed 5% of the aggregate number of business lines to be served by the
Company and the Borrowers.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated as
of September 13, 2002, among the Collateral Agent, the Administrative Agent,
each of the Revolving Credit Lenders, the Term A Lenders, the Term B Lenders,
the Term C Lenders, the Term D Lenders, the Bridge Agent, the Bridge Collateral
Agent and the Bridge Lenders, and duly acknowledged by the Borrowers and the
Guarantor, substantially in the form of EXHIBIT K hereto, as such agreement may
be amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
13
"INTEREST EXPENSE" means, for any period, total interest expense
(including, without limitation, interest expense attributable to Capital Leases
and plus all net payment obligations pursuant to Hedging Agreements) determined
on a consolidated basis, without duplication, for any specified Person and its
Subsidiaries in accordance with GAAP.
"INTEREST PERIOD" shall have the meaning assigned thereto in Section
5.1(b).
"IRU" means a noncancellable indefeasible right to use
telecommunications bandwidth (or similar network bandwidth) or capacity therein,
related equipment or other Telecommunications Equipment, or any other right
substantially similar to the foregoing.
"ISPA98" means the International Standby Practices (1998
Revision, effective January 1, 1999), International Chamber of Commerce
Publication No. 590.
"ISSUING LENDER" means Wachovia (or applicable affiliate thereof
designated by Wachovia), in its capacity as issuer of any Letter of Credit, or
any successor thereto.
"JOINDER AGREEMENT" means, collectively, each joinder agreement
executed in favor of the Administrative Agent for the ratable benefit of itself
and the Lenders, substantially in the form of EXHIBIT J.
"L/C COMMITMENT" means, from and after the Closing Date, $0.
"L/C FACILITY" means the letter of credit facility established pursuant
to Article III hereof.
"L/C OBLIGATIONS" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to this Agreement.
"L/C PARTICIPANTS" means the collective reference to all Revolving
Credit Lenders other than the Issuing Lender.
"LENDER" means each Person executing this Agreement as a lender
(including, without limitation, the Revolving Credit Lenders, the Term A
Lenders, the Term B Lenders, the Term C Lenders, the Term D Lenders and the
Issuing Lender unless the context otherwise requires) set forth on the signature
pages hereto and each Person that hereafter becomes a party to this Agreement as
a lender pursuant to Section 15.10.
"LENDING OFFICE" means, with respect to any Lender, the office of such
Lender maintaining such Lender's portion of the Extensions of Credit.
14
"LETTERS OF CREDIT" shall have the meaning assigned thereto in Section
3.1.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow ▇▇▇▇▇
Market Screen 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period. If, for any
reason, such rate does not appear on the Dow ▇▇▇▇▇ Market Screen 3750, then
"LIBOR" shall be determined by the Administrative Agent to be the arithmetic
average of the rate per annum at which deposits in Dollars would be offered by
first class banks in the London interbank market to the Administrative Agent at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period for a period equal to such Interest Period
and in an amount substantially equal to the principal amount of the applicable
Loan subject to such Interest Period.
"LIBOR RATE" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula.
LIBOR Rate = LIBOR
-------------------------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR RATE LOAN" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 5.1(a).
"LIEN" means, with respect to any asset, any mortgage, deed of trust,
lien, pledge, charge, security interest, hypothecation or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset.
"LIMITED SUBSIDIARY" means, as of any date of determination, either
Choice One Communications of Pennsylvania Inc., a Delaware corporation, Choice
One Communications of Ohio Inc., a Delaware corporation, or US Xchange of
Indiana, L.L.C., a Delaware limited liability company, and "LIMITED
SUBSIDIARIES" means all of such entities; PROVIDED, that each entity shall cease
to be a Limited Subsidiary upon receipt by such entity (with a copy to the
Administrative Agent) of authorization by each applicable PUC to borrow an
amount equal to the Aggregate Exposure and perform its corresponding obligations
under the Loan Documents.
15
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Applications, any Hedging Agreement with any Lender (which such Hedging
Agreement is permitted or required hereunder), the Security Documents, the
Syndication Letter, each Joinder Agreement, the Intercreditor Agreement and each
other document, instrument, certificate and agreement executed and delivered by
the Company or any of its Subsidiaries or their counsel in connection with this
Agreement, all as may be amended, restated or otherwise modified, in each case
other than the Related Transaction Documents.
"LOANS" means the collective reference to the Revolving Credit Loans
and the Term Loans and "Loan" means any of such Loans.
"LUCENT AGREEMENT" means the General Agreement Number LNM980612RMCO,
effective as of July 17, 1998, by and between the Company and Lucent
Technologies Inc., as amended.
"MANAGEMENT MEMBERS" shall have the meaning assigned thereto in the
Transaction Agreement.
"MATERIAL ADVERSE EFFECT" means, with respect to the Company and its
Subsidiaries, (a) a material adverse effect on (i) the properties, business,
prospects, operations or condition (financial or otherwise) of such Persons
taken as a whole, (ii) the ability of any such Person to perform its obligations
under the Loan Documents in each case to which it is a party or (iii) the
validity or enforceability of any of the Loan Documents or the rights and
remedies of the Administrative Agent or the Lenders thereunder or (b) for the
period through and including March 31, 2005, any liability of the Company or its
Subsidiaries (other than liabilities which are permitted hereunder) in excess of
$2,000,000.
"MATERIAL CONTRACT" means (a) any contract or other agreement, written
or oral, of the Borrowers or any of their Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $2,000,000 per
annum, (b) the Lucent Agreement, any Interconnection Agreement or any other
Network Agreement (c) any IRU with payments in excess of $500,000 per annum or
(d) any other contract or agreement, of the Borrowers or any of their
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"MORTGAGE" means each fee or leasehold mortgage, deed of trust, or
collateral assignment of lease, executed by a Borrower or Subsidiary in favor of
the Administrative Agent or the Collateral Agent (and in form and substance
reasonably satisfactory thereto) for the ratable benefit of itself and the
Lenders, as each such agreement may be amended, restated or otherwise modified.
16
"MSDWCP" means, collectively, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners
III, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Investors, L.P., MSCP III 892 Investors,
L.P.; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital Partners IV, L.P., MSDW IV 892
Investors, L.P.; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital Investors IV, L.P. and
any private equity investment fund or similar entity managed by any of the
Affiliates of any of the foregoing (excluding, for clarification purposes,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.).
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions within the preceding six years.
"NET CASH PROCEEDS" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by the Company
or any of its Subsidiaries from such sale LESS the sum of (i) all income taxes
and other taxes assessed or estimated by the such Persons (with such amount
approved by the Administrative Agent) to be assessed by a Governmental Authority
as a result of such sale and any other fees and expenses incurred in connection
therewith and (ii) the principal amount of, premium, if any, and interest on any
Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is
required to be repaid in connection with such sale, (b) with respect to any
offering of capital stock or issuance of Debt, the gross cash proceeds received
by the Company or any of its Subsidiaries therefrom LESS all legal, underwriting
and other fees and expenses incurred in connection therewith and (c) with
respect to any payment under an insurance policy or in connection with a
condemnation proceeding, the amount of cash proceeds received by the Company or
its Subsidiaries from an insurance company or Governmental Authority, as
applicable, net of all expenses of collection; PROVIDED, that, notwithstanding
clause (b) to the contrary, Net Cash Proceeds shall not include the proceeds
from the issuance of (x) capital stock by any wholly-owned Subsidiary to the
Company or any other wholly-owned Subsidiary, (y) stock options or warrants by
the Company or any of its Subsidiaries to any director, officer or employee
thereof in connection with such Person's employment or hire after the Closing
Date, or (z) capital stock by the Company or any other Subsidiary in connection
with exercise of stock options or warrants held by any director, officer or
employee of the Company or any of its Subsidiaries; so long as, in the case of
clauses (y) and (z), such stock options or warrants are granted or issued
pursuant to a plan or other employment agreement duly approved by the board of
directors of the applicable entity and by the Administrative Agent.
"NET INCOME" means, with respect to any specified Person and its
Subsidiaries for any period, the net income (or loss) of such Persons for such
period calculated on a Consolidated basis in accordance with GAAP; PROVIDED,
that there shall be excluded from net income (or loss): (a) the income (or loss)
of any other Person (other than a Wholly-Owned Subsidiary of such first Person)
in which such first Person or Subsidiary thereof has an ownership interest
unless received by such first Person or Subsidiary in a cash distribution and
(b) the income (or loss) of any other Person accrued prior to the date it became
a Subsidiary or is merged into or consolidated with such first Person or
Subsidiary.
17
"NETWORK AGREEMENT" means any Interconnection Agreement or other
document or agreement entered into by any Borrower or any of its Subsidiaries
regarding the use, operation or maintenance of, or otherwise concerning, any of
the Network Facilities.
"NETWORK FACILITY" means the Switches and network of digital and analog
facilities owned or leased by any Borrower or any of its Subsidiaries for use in
the provision of CLEC telephony service or other voice or data transmission
services.
"NOTES" means the collective reference to the Revolving Credit Notes,
the Term A Notes, the Term B Notes, the Term C Notes and the Term D Notes and
"Note" means any of such Notes.
"NOTICE OF ACCOUNT DESIGNATION" shall have the meaning assigned thereto
in Section 4.2(e).
"NOTICE OF BORROWING" shall have the meaning assigned thereto in
Section 4.2(c).
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning assigned
thereto in Section 5.2.
"NOTICE OF PREPAYMENT" shall have the meaning assigned thereto in
Section 2.4(d).
"OBLIGATIONS" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after (or which would have accrued but for) the filing of any
bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all
payment and other obligations owing by any Borrower to any Lender or the
Administrative Agent under any Hedging Agreement related to the Obligations with
any Lender (which such Hedging Agreement is permitted or required hereunder),
and (d) all other fees and commissions (including attorney's fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations,
covenants and duties owing by the Company or any Borrower to the Lenders or the
Administrative Agent or the Collateral Agent, of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, in each case under or in respect of this Agreement, any
Note, any Letter of Credit or any of the other Loan Documents.
"OFFICER'S COMPLIANCE CERTIFICATE" shall have the meaning assigned
thereto in Section 8.2.
"OTHER TAXES" shall have the meaning assigned thereto in Section
5.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"PAYMENT REFUSAL" shall have the meaning assigned thereto in Section
4.5(c)(vi).
18
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the Company
or any ERISA Affiliates or (b) has at any time within the preceding six years
been maintained for the employees of the Company or any of their current or
former ERISA Affiliates.
"PERMITTED MARKETS" means the collective reference to voice and DSL
network buildout in (a) the markets as set forth in SCHEDULE 1.1(C) and (b) any
additional market approved in writing by the Required Lenders.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"PLEDGE AGREEMENT" means the third amended and restated pledge
agreement of even date herewith executed by the Company and the Borrowers in
favor of the Administrative Agent and/or the Collateral Agent for the ratable
benefit of itself and the Lenders, substantially in the form of EXHIBIT I, as
amended, restated or otherwise modified.
"PP&E" means with respect to any specified Person and its Subsidiaries
as of any date of determination, the gross property, plant and equipment
(including capitalized labor) thereof as of such date determined on a
Consolidated basis in accordance with GAAP.
"PREFERRED EQUITY" means the Series A Senior Cumulative Preferred Stock
issued by the Company pursuant to the Preferred Equity Documents.
"PREFERRED EQUITY DOCUMENTS" means any and all documents relating to
the Company's preferred stock, including without limitation, the provisions of
the articles of incorporation or other charter documents of the Company
(including the certificate of designations) designating the terms of such
preferred stock, substantially in the form of EXHIBIT L hereto.
"PRIME RATE" means, at any time, the rate of interest per annum
publicly announced from time to time by Wachovia Bank, National Association as
its prime rate. Each change in the Prime Rate shall be effective as of the
opening of business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by Wachovia Bank, National
Association as its Prime Rate is an index or base rate and shall not necessarily
be its lowest or best rate charged to its customers or other banks.
"PUC" means any state, provincial or other local regulatory agency or
body that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Network Facility or CLEC telephony system or
over Persons who own, construct or operate a Network Facility or any such
system, in each case by reason of the nature or type of the business subject to
regulation and not pursuant to laws and regulations of general applicability to
Persons conducting business in any such jurisdiction.
19
"PUBLIC OFFERING" shall have the meaning given thereto in the
Transaction Agreement.
"PUC AUTHORIZATIONS" means all applications, filings, reports,
documents, recordings and registrations with, and all validations, exemptions,
franchises, waivers, approvals, orders or authorizations, consents, licenses,
certificates and permits from, any PUC.
"REFUSED PROCEEDS" shall have the meaning assigned thereto in Section
4.5(c)(vi).
"REGISTER" shall have the meaning assigned thereto in Section 15.10(d).
"REIMBURSEMENT OBLIGATION" means the obligation of the Borrowers to
reimburse the Issuing Lender for amounts drawn under Letters of Credit.
"RELATED TRANSACTIONS" means the issuance of the Company New Warrants,
the amendments to the Company Existing Warrants, the amendments to the Bridge
Loan Documents (including the execution and delivery of the Bridge Loan Security
Agreement, the Bridge Loan Pledge Agreement and the Subordinated Upstream
Guaranty) and the amendments to the Preferred Equity Documents, in each case, as
contemplated herein.
"RELATED TRANSACTIONS DOCUMENTS" means the Preferred Equity Documents,
the Bridge Loan Documents, the Company Existing Warrants and the Company New
Warrants.
"REQUIRED LENDERS" means, at any date, any combination of Lenders
(other than MSDWCP) whose unused Commitments and Extensions of Credit aggregate
at least fifty-one percent (51%) of the sum of (a) the aggregate unused amount
of the Commitments of all Lenders (other than MSDWCP) and (b) the aggregate
Extensions of Credit of all Lenders (other than MSDWCP).
"REQUIRED TERM D LENDERS" means, at any date, any combination of Term D
Lenders whose unused Term D Commitments and principal amount of Term D Loans
outstanding aggregate at least 51% of the sum of (a) the aggregate unused amount
of the Term D Commitments of all Term D Lenders and (b) the aggregate principal
amount of all Term D Loans of all Term D Lenders.
"RESPONSIBLE OFFICER" means any of the following: the chief executive
officer, chief financial officer or vice president of finance of the Company or
any Borrower, as applicable, or any other officer thereof reasonably acceptable
to the Administrative Agent.
20
"REVOLVING CREDIT COMMITMENT" means (a) as to any Revolving Credit
Lender, the obligation of such Revolving Credit Lender to make Revolving Credit
Loans and to participate in Letters of Credit for the account of the Borrowers
hereunder in an aggregate principal amount at any time outstanding not to exceed
the amount set forth opposite such Revolving Credit Lender's name on SCHEDULE
1.1(A) hereto, as such amount may be reduced or modified at any time or from
time to time pursuant to the terms hereof and (b) as to all Revolving Credit
Lenders, the aggregate commitment of all Revolving Credit Lenders to make
Revolving Credit Loans and to participate in Letters of Credit, as such amount
may be reduced at any time or from time to time pursuant to the terms hereof.
The Revolving Credit Commitment of all Revolving Credit Lenders on the Closing
Date shall be $100,000,000, all of which has been fully utilized as of the
Closing Date and none of which is available from and after the Closing Date.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means, as to any Revolving
Credit Lender at any time, the ratio of (a) the amount of the Revolving Credit
Commitment of such Lender to (b) the Revolving Credit Commitments of all
Revolving Credit Lenders.
"REVOLVING CREDIT FACILITY" means the revolving credit facility
established pursuant to Article II hereof.
"REVOLVING CREDIT LENDER" means each Lender with a Revolving Credit
Commitment.
"REVOLVING CREDIT LOANS" means any revolving loan made to the Borrowers
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"REVOLVING CREDIT NOTES" means the collective reference to the
Revolving Credit Notes made by the Borrowers payable to the order of each
Revolving Credit Lender, substantially in the form of EXHIBIT A-1 hereto,
evidencing the Revolving Credit Facility, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part; "Revolving Credit Note" means any of
such Revolving Credit Notes.
"REVOLVING CREDIT TERMINATION DATE" means July 31, 2008.
"SEC" means the Securities and Exchange Commission, or any governmental
authority succeeding to any of its principal functions.
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" shall have the meaning
assigned thereto in the Statement of Purpose.
"SECURITY AGREEMENT" means the third amended and restated security
agreement of even date herewith executed by the Company and the Borrowers in
favor of the Administrative Agent and/or the Collateral Agent for the ratable
benefit of itself and the Lenders, substantially in the form of EXHIBIT H, as
amended, restated or otherwise modified.
21
"SECURITY DOCUMENTS" means the collective reference to the Security
Agreement, the Pledge Agreement, each Mortgage, and each other agreement or
writing pursuant to which the Company or any Subsidiary thereof purports to
pledge or grant a security interest in any property or assets securing the
Obligations or any such Person purports to guaranty the payment and/or
performance of the Obligations.
"SOLVENT" means, with respect to the Company, each Borrower and its
Subsidiaries on a particular date, that any such Person (a) has capital (or
access to immediately available capital, including, if applicable, under the
Credit Facility), sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its
debts as they mature and (b) does not believe that it will incur debts or
liabilities beyond its ability to pay such debts or liabilities as they mature.
"SUBORDINATED DEBT" means any Debt of the Borrowers or any Subsidiary
thereof subordinated to the Obligations on terms satisfactory to the
Administrative Agent and the Required Lenders.
"SUBORDINATED UPSTREAM GUARANTY" means the subordinated guaranty, dated
as of September 13, 2002, by the Borrowers in favor of the Bridge Lenders, and
subject to the Intercreditor Agreement, substantially in the form of EXHIBIT N
hereto, as amended from time to time as permitted hereby, pursuant to which the
Bridge Notes are guaranteed by the Borrowers on a subordinated basis
(subordinated to the prior payment in full of all Obligations).
"SUBSIDIARY" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified, references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Company (and such references shall include any such Subsidiary
which is also a Borrower).
"SWITCH" means any Lucent 5-ESS Switch or other comparable switch for
the provision of CLEC telephony service or a packet-based switch for the
provision of DSL and/or voice services.
"SYNDICATION AGENT" means General Electric Capital Corporation in its
capacity as Syndication Agent.
22
"TAXES" shall have the meaning assigned thereto in Section 5.11(a).
"TELECOMMUNICATIONS EQUIPMENT" means fiber optic cable, Switches,
transmission equipment and other ancillary hardware necessary for the
installation and operation of a switch room or central office and collocation
with other telecommunications providers which will enable the Borrowers to offer
CLEC telephony and DSL. Telecommunications Equipment shall also include software
associated with the Network Facility and back office systems (including without
limitation billing systems, operations systems and support, customer service and
DSL services) and other related software and hardware products integral to
developing a viable CLEC telephony and DSL business.
"TERM A LENDER" means each Lender which has a Term A Loan Commitment or
which has extended Term A Loans to the Borrowers.
"TERM A LOAN COMMITMENT" means (a) as to any Term A Lender, the
obligation of such Lender to make the Term A Loans for the account of the
Borrowers hereunder in an aggregate principal amount not to exceed the amount
set forth opposite such Lender's name on SCHEDULE 1.1(A) hereto, as such amount
may be reduced or modified at any time or from time to time pursuant to the
terms hereof and (b) as to all Term A Lenders, the aggregate commitment to make
Term A Loans. The Term A Loan Commitment of all Term A Lenders as of the Closing
Date shall be One Hundred Twenty-Five Million Dollars ($125,000,000), all of
which has been fully utilized.
"TERM A LOAN FACILITY" means the term A loan facility established
pursuant to Article IV.
"TERM A LOAN MATURITY DATE" means the first to occur of (a) July 31,
2008, or (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
"TERM A LOAN PERCENTAGE" means, as to any Term A Lender, the ratio of
(a) the outstanding principal balance of the Term A Loans of such Term A Lender
to (b) the aggregate outstanding balance of the Term A Loans of all Term A
Lenders.
"TERM A LOANS" means the term loans made to the Borrowers by the Term A
Lenders in accordance with Section 4.1(a).
"TERM A NOTES" means the Term A Notes made by the Borrowers payable to
the order of each of the Term A Lenders, substantially in the form of EXHIBIT
A-2 hereto, evidencing the Debt incurred by the Borrowers pursuant to the Term A
Loan Facility, and any amendments, modifications and supplements thereto, any
substitutes therefor, and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
23
"TERM B LENDER" means each Lender which has a Term B Loan Commitment or
which has extended Term B Loans to the Borrowers.
"TERM B LOAN COMMITMENT" means (a) as to any Term B Lender, the
obligation of such Term B Lender to make the Term B Loans for the account of the
Borrowers hereunder in an aggregate principal amount not to exceed the amount
set forth opposite such Term B Lender's name on SCHEDULE 1.1(A) hereto, as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof and (b) as to all Term B Lenders, the aggregate commitment to
make Term B Loans. The Term B Loan Commitment of all Term B Lenders as of the
Closing Date shall be One Hundred Twenty-Five Million Dollars ($125,000,000),
all of which has been fully utilized.
"TERM B LOAN FACILITY" means the term B loan facility established
pursuant to Article IV.
"TERM B LOAN MATURITY DATE" means the first to occur of (a) January 31,
2009, or (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
"TERM B LOAN PERCENTAGE" means, as to any Term B Lender, the ratio of
(a) the outstanding principal balance of the Term B Loans of such Term B Lender
to (b) the aggregate outstanding balance of the Term B Loans of all Term B
Lenders.
"TERM B LOANS" means the term loans made to the Borrowers by the Term B
Lenders in accordance with Section 4.1(b).
"TERM B NOTES" means the Term B Notes made by the Borrowers payable to
the order of each of the Term B Lenders, substantially in the form of EXHIBIT
A-3 hereto, evidencing the Debt incurred by the Borrowers pursuant to the Term B
Loan Facility, and any amendments, modifications and supplements thereto, any
substitutes therefor, and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
"TERM C LENDER" means each Lender which has a Term C Loan Commitment or
which has extended Term C Loans to the Borrowers.
"TERM C LENDER COMMITMENT LETTER" means the commitment letter dated as
of August 13, 2002 among the Term C Lenders, the Guarantor and the Borrowers
with respect to $44,500,000 of Term C Loans.
"TERM C LOAN COMMITMENT" means (a) as to any Term C Lender, the
obligation of such Term C Lender to make the Term C Loans for the account of the
Borrowers hereunder in an aggregate principal amount not to exceed the amount
set forth opposite such Term C Lender's name on SCHEDULE 1.1(A) hereto, as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof and (b) as to all Term C Lenders, the aggregate commitment to
make Term C Loans. The Term C Loan Commitment of all Term C Lenders as of the
Closing Date shall be Forty-Four Million Five Hundred Thousand Dollars
($44,500,000).
24
"TERM C LOAN DEFERRED INTEREST" shall have the meaning assigned thereto
in Section 5.1(e).
"TERM C LOAN FACILITY" means the term C loan facility established
pursuant to Article IV.
"TERM C LOAN MATURITY DATE" means the first to occur of (a) March 31,
2009, or (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
"TERM C LOAN PERCENTAGE" means, as to any Term C Lender, the ratio of
(a) the outstanding principal balance of the Term C Loans of such Term C Lender
to (b) the aggregate outstanding balance of the Term C Loans of all Term C
Lenders.
"TERM C LOANS" means the term loans to be made to the Borrowers by the
Term C Lenders pursuant to Section 4.1(c).
"TERM C NOTES" means the Term C Notes made by the Borrowers payable to
the order of each of the Term C Lenders, substantially in the form of EXHIBIT
A-4 hereto, evidencing the Debt incurred by the Borrowers pursuant to the Term C
Loan Facility, and any amendments, modifications and supplements thereto, any
substitutes therefor, and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
"TERM D LENDER" means each Lender which has a Term D Loan Commitment or
which has extended Term D Loans to the Borrowers.
"TERM D LOAN COMMITMENT" means (a) as to any Term D Lender, the
obligation of such Term D Lender to make the Term D Loans to the account of the
Borrowers hereunder in an aggregate principal amount not to exceed the amount
set forth opposite such Term D Lender's name on SCHEDULE 1.1(A) hereto, as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof and (b) as to all Term D Lenders, the aggregate commitment to
make Term D Loans. The Term D Loan Commitment of all Term D Lenders as of the
Closing Date shall be Four Million Three Hundred Seventy-Five Thousand Dollars
($4,375,000).
"TERM D LOAN COMMITMENT TERMINATION DATE" means the first to occur of
(a) December 31, 2003, or (b) the date of termination by the Administrative
Agent on behalf of the Lenders pursuant to Section 12.2(a).
"TERM D LOAN FACILITY" means the term D loan facility established
pursuant to Article IV.
"TERM D LOAN MATURITY DATE" means the first to occur of (a) January 31,
2009, or (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
25
"TERM D LOAN PERCENTAGE" means, as to any Term D Lender, the ratio of
(a) the outstanding principal balance of the Term D Loans of such Term D Lender
to (b) the aggregate outstanding balance of the Term D Loans of all Term D
Lenders.
"TERM D LOANS" means the term loans to be made to the Borrowers by the
Term D Lenders pursuant to Section 4.1(d).
"TERM D NOTES" means the Term D Notes made by the Borrowers payable to
the order of each of the Term D Lenders, substantially in the form of EXHIBIT
A-5 hereto, evidencing the Debt incurred by the Borrowers pursuant to the Term D
Loan Facility, and any amendments, modifications and supplements thereto, any
substitutes therefor, and any replacements, restatements, renewals or extensions
thereof, in whole or in part.
"TERM LOANS" means the Term A Loans, the Term B Loans, the Term C Loans
or the Term D Loans made to the Borrowers by the Term A Lenders, the Term B
Lenders, the Term C Lenders or the Term D Lenders, as applicable, in accordance
with Sections 4.1(a), (b), (c) or (d) or all such Term A Loans, Term B Loans,
Term C Loans, and Term D Loans, as the context requires.
"TERMINATION EVENT" means: (a) except for any such event that could not
reasonably be expected to have a Material Adverse Effect, a "Reportable Event"
described in Section 4043 of ERISA for which the notice requirement has not been
waived by the PBGC, or (b) except that could not reasonably be expected to have
a Material Adverse Effect, the withdrawal of the Company or any ERISA Affiliate
from a Pension Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination, each under Section
4041(c) of ERISA, or (d) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e)
any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (f) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (g) except for any such
event that could not reasonably be expected to have a Material Adverse Effect,
any event or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (h) except for any
such event that could not reasonably be expected to have a Material Adverse
Effect, any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"TOTAL CONSOLIDATED DEBT" means, without duplication, all Debt of the
Company and its Subsidiaries determined on a Consolidated basis at any date of
determination.
26
"TRANSACTION AGREEMENT" means the Transaction Agreement, dated as of
July 8, 1998, by and among the Company and the investors party thereto, as
amended and modified by Amendments No. 1 through No. 10 prior to the date
hereof, and as the same may be further amended, restated or modified subject to
the terms hereof.
"UNIFORM CUSTOMS" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York, as amended, restated or otherwise modified.
"UNITED STATES" means the United States of America.
"US XCHANGE ACQUISITION" means the acquisition by Barter Acquisition
Corporation, a wholly-owned Subsidiary of the Company of all of the issued and
outstanding capital stock of US Xchange Inc. through a forward subsidiary merger
pursuant to the terms of the Acquisition Documents.
"WACHOVIA" means Wachovia Investors, Inc. (f/k/a First Union Investors,
Inc.) and its successors.
"WHOLLY-OWNED" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary are,
directly or indirectly, owned or controlled by a Borrower or the Company, as
applicable, and/or one or more of its Wholly-Owned Subsidiaries.
"WORKING CAPITAL" means, as of any date of determination with respect
to any specified Person and its Subsidiaries on a Consolidated basis without
duplication, the sum of the following determined utilizing financial statements
prepared in accordance with GAAP (i) current assets (excluding cash and
unrestricted Cash Equivalents) MINUS (ii) current liabilities (excluding any
current portion of Debt included therein) in each case as of such date of
determination.
SECTION 1.2 GENERAL. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, section, subsection, Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte time"
shall refer to the applicable time of day in Charlotte, North Carolina.
27
SECTION 1.3 OTHER DEFINITIONS AND PROVISIONS.
(a) USE OF CAPITALIZED TERMS. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) MISCELLANEOUS. The words "hereof", "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 provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 REVOLVING CREDIT LOANS. Subject to the terms and conditions
of this Agreement, each Revolving Credit Lender has made Revolving Credit Loans
to the Borrowers. Once prepaid or repaid (in each case for any reason),
Revolving Credit Loans may not be reborrowed and there are no further
obligations on the part of the Revolving Credit Lenders to make any further
Revolving Credit Loans.
SECTION 2.2 [Intentionally Omitted].
SECTION 2.3 [Intentionally Omitted].
SECTION 2.4 REPAYMENT OF REVOLVING CREDIT LOANS.
(a) REPAYMENT ON TERMINATION DATE. The Borrowers shall repay the
outstanding principal amount of all Revolving Credit Loans in full on the
Revolving Credit Termination Date, together with all accrued but unpaid interest
thereon, and any other amounts payable with respect thereto.
(b) MANDATORY REPAYMENT OF EXCESS REVOLVING CREDIT LOANS. If at any
time the outstanding principal amount of all Revolving Credit Loans exceeds the
maximum permitted outstanding amount pursuant to this Agreement (including by
reason of Section 2.6(a)), the Borrowers shall repay no later than the next
Business Day following notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Revolving Credit Lenders, Extensions
of Credit (other than Term Loans) in an amount equal to such excess, with each
such repayment applied FIRST to the principal amount of outstanding Revolving
Credit Loans and SECOND, with respect to any Letters of Credit then outstanding,
a payment of cash collateral into a cash collateral account opened by the
Administrative Agent for the benefit of the Revolving Credit Lenders in an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit (such cash collateral to be applied in accordance with Section
12.2(b)).
28
(c) REPAYMENT WITH EXCESS PROCEEDS. The Borrowers shall repay the
outstanding principal balance of the Revolving Credit Loans with any Excess
Proceeds and Refused Proceeds in an amount determined in accordance with Section
4.5(c)(vi).
(d) OPTIONAL REPAYMENTS. The Borrowers may at any time and from time to
time repay Revolving Credit Loans, in whole or in part, upon at least three (3)
Business Days' irrevocable notice to the Administrative Agent with respect to
LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans, in the form attached hereto as EXHIBIT D (a "NOTICE OF
PREPAYMENT") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination thereof,
and, if of a combination thereof, the amount allocable to each, PROVIDED that,
all funds received in respect of such optional repayments shall be applied in
accordance with Section 4.5(c)(vi). Upon receipt of such notice, the
Administrative Agent shall promptly notify each applicable Lender. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date set forth in such notice. Partial repayments shall be in an aggregate
amount of $500,000 or a whole multiple of $250,000 in excess thereof with
respect to Base Rate Loans or $2,000,000 or a whole multiple of $500,000 in
excess thereof with respect to LIBOR Rate Loans.
(e) LIMITATION ON REPAYMENT OF LIBOR RATE LOANS. The Borrowers may not
repay any LIBOR Rate Loan (on an optional or mandatory basis) on any day other
than on the last day of the Interest Period applicable thereto unless such
repayment is accompanied by any amount required to be paid pursuant to Section
5.9 hereof.
SECTION 2.5 REVOLVING CREDIT NOTES. Each Revolving Credit Lender's
Revolving Credit Loans and the obligation of the Borrowers to repay such
Revolving Credit Loans shall be evidenced by a separate amended and restated
Revolving Credit Note executed by the Borrowers payable to the order of such
Revolving Credit Lender. Each Revolving Credit Note shall be dated the date
hereof and shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 5.1.
29
SECTION 2.6 PERMANENT REDUCTION OF THE REVOLVING CREDIT COMMITMENT.
(a) SCHEDULED REDUCTIONS. The Revolving Credit Commitment shall be
permanently reduced on the last Business Day of each of September, December,
March and June and on the Revolving Credit Termination Date, by multiplying the
corresponding quarterly percentage TIMES the Revolving Credit Commitment in
effect on June 30, 2004 in accordance with the following table:
------------------------------------- --------------------- ----------------
Reduction Total
Quarters Ending Per Quarterly Payment Reduction
------------------------------------- --------------------- ----------------
6/30/2004 through 9/30/2004 1.25% 2.5%
12/31/2004 through 9/30/2005 2.50% 10.0%
12/31/2005 through 9/30/2006 6.25% 25.0%
12/31/2006 through 6/30/2008 7.50% 52.5%
Revolving Credit Termination Date N/A 10.0%
-----
100.0%
------------------------------------- --------------------- ----------------
Any reductions pursuant to Section 2.6(b) shall be applied PRO RATA to reduce
the remaining scheduled reduction amounts required by this paragraph (a).
(b) MANDATORY REDUCTIONS. If at any time Excess Proceeds (or Refused
Proceeds) remain after the prepayment of the Term D Loans (including principal
and interest) and the Term C Loan Deferred Interest pursuant to Section
4.5(c)(vi), the Revolving Credit Commitment shall be permanently reduced on the
date of the required prepayment under Section 4.5(c) by an amount determined in
accordance with Section 4.5(c)(vi).
(c) CORRESPONDING PREPAYMENT. Each permanent reduction permitted or
required pursuant to this Section 2.6 shall be accompanied by a payment of
principal sufficient to reduce the aggregate outstanding Revolving Credit Loan,
and L/C Obligations, as applicable, after such reduction to the Revolving Credit
Commitment as so reduced and if the Revolving Credit Commitment as so reduced is
less than the aggregate amount of all outstanding Letters of Credit, the
Borrowers shall be required to deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Any reduction of the Revolving
Credit Commitment to zero shall be accompanied by payment of all outstanding
Obligations (and furnishing of such cash collateral for all L/C Obligations) and
shall result in the termination of the Revolving Credit Commitments and
Revolving Credit Facility. Any such cash collateral shall be applied in
accordance with Section 12.2(b). If the reduction of the Revolving Credit
Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall
be accompanied by any amount required to be paid pursuant to Section 5.9 hereof.
30
SECTION 2.7 TERMINATION OF AVAILABILITY UNDER REVOLVING CREDIT
FACILITY. Availability under the Revolving Credit Facility for new extensions of
Revolving Credit Loans terminated on the Closing Date.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C COMMITMENT. A letter of credit facility for the
issuance of standby letters of credit ("LETTERS OF CREDIT") was established
under Article III of the Second Amended and Restated Credit Agreement. As of the
Closing Date, no Letters of Credit were outstanding and the Letter of Credit
Commitment, from and after the Closing Date, shall be equal to $0.
SECTION 3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
[Intentionally Omitted].
SECTION 3.3 COMMISSIONS AND OTHER CHARGES. [Intentionally Omitted].
SECTION 3.4 L/C PARTICIPATIONS. [Intentionally Omitted].
SECTION 3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER.[Intentionally
Omitted].
SECTION 3.6 OBLIGATIONS ABSOLUTE. [Intentionally Omitted].
SECTION 3.7 EFFECT OF APPLICATION. [Intentionally Omitted].
ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 TERM LOANS.
(a) Subject to the terms and conditions of this Agreement, each Term A
Lender has made Term A Loans to the Borrowers in a principal amount equal to
such Term A Lender's Term A Loan Percentage of One Hundred Twenty-Five Million
Dollars ($125,000,000). Once prepaid or repaid (in each case for any reason),
Term A Loans may not be reborrowed.
(b) Subject to the terms and conditions of this Agreement, each Term B
Lender has made Term B Loans to the Borrowers in a principal amount equal to
such Term B Lender's Term B Loan Percentage of One Hundred Twenty-Five Million
Dollars ($125,000,000). Once prepaid or repaid (in each case for any reason),
Term B Loans may not be reborrowed.
31
(c) Subject to the terms and conditions of this Agreement, each Term C
Lender severally agrees to make Term C Loans to the Borrowers on the Closing
Date. The Term C Loans shall be funded by each Term C Lender in a principal
amount equal to such Term C Lender's Term C Loan Percentage of the Term C Loan
Commitment. The aggregate principal amount of the Term C Loans shall not, at the
time of borrowing, exceed the total Term C Loan Commitment. The Term C Loan
borrowing pursuant to this Article IV will constitute a permanent reduction in
the Term C Loan Commitment and once repaid or prepaid (for any reason), Term C
Loans may not be reborrowed.
(d) Subject to the terms and conditions of this Agreement, each Term D
Lender severally agrees to make up to five equal quarterly Term D Loans to the
Borrowers commencing December 31, 2002 through and including the Term D Loan
Commitment Termination Date. The Term D Loans, if requested by the Borrowers
pursuant to Section 4.2(d), shall be funded by each Term D Lender in a principal
amount of up to 1/5 of such Lender's original Term D Loan Commitment, such
funding to occur on each of December 31, 2002, March 31, 2003, June 30, 2003,
September 30, 2003 and December 31, 2003 (or if any such day is not a Business
Day on the next succeeding day that is a Business Day). The aggregate principal
amount of the Term D Loans shall not, at any time of borrowing, exceed the total
Term D Loan Commitment in effect at such time. Each Term D Loan borrowing
pursuant to this Article IV will constitute a permanent reduction in the Term D
Loan Commitment and once prepaid or repaid (in each case for any reason), Term D
Loans may not be reborrowed. Any portion of the Term D Loan Commitment not
funded on or prior to the Term D Loan Commitment Termination Date shall expire
on such date.
SECTION 4.2 PROCEDURE FOR ADVANCES OF TERM LOANS.
(a) PROCEDURE FOR ADVANCES OF TERM A LOANS. [Intentionally Omitted].
(b) PROCEDURE FOR ADVANCES OF TERM B LOANS. [Intentionally Omitted].
(c) PROCEDURE FOR ADVANCES OF TERM C LOANS. The Borrowers shall give
the Administrative Agent irrevocable prior written notice in the form attached
hereto as EXHIBIT B (a "NOTICE OF BORROWING") not later than 11:00 a.m.
(Charlotte time) on the Closing Date requesting that the Term C Lenders make the
Term C Loan on such date.
32
(d) PROCEDURE FOR ADVANCES OF TERM D LOANS. The Borrowers shall give
the Administrative Agent irrevocable prior written notice in the form of a
Notice of Borrowing not later than 11:00 a.m. (Charlotte time) (i) on the same
Business Day with respect to each Base Rate Loan and (ii) at least three (3)
prior Business Days notice with respect to each LIBOR Rate Loan, of its
intention to borrow, specifying (A) that such Loan is to be a Term D Loan, (B)
the date of such borrowing, which shall be a Business Day on which Term D Loans
may be made under Section 4.1(d), (C) the amount of such borrowing, which shall
be in an amount equal to (1) the lesser of (x) 1/5 of the Term D Loan Commitment
as of the Closing Date and (y) the maximum amount of the Term D Loan Commitment
then available to the Borrowers, or (2) if less, (x) with respect to Base Rate
Loans in an aggregate principal amount of $500,000 or a whole multiple of
$250,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $875,000 or a whole multiple of $250,000 in excess thereof
and (D) whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E)
in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
thereto. A Notice of Borrowing received after 11:00 a.m. (Charlotte time) shall
be deemed received on the next Business Day. The Administrative Agent shall
promptly notify the Term D Lenders of each such Notice of Borrowing.
(e) DISBURSEMENT OF TERM LOANS. Not later than 2:00 p.m. (Charlotte
time) on the applicable borrowing date, each Term C Lender and Term D Lender, as
applicable, will make available to the Administrative Agent, for the account of
the Borrowers, at the office of the Administrative Agent in funds immediately
available to the Administrative Agent, such Lender's Term C Loan Percentage of
the Term C Loans and such Lender's Term D Loan Percentage of the Term D Loans,
as applicable, to be made on such borrowing date. The Borrowers hereby
irrevocably authorize the Administrative Agent to disburse the proceeds of each
borrowing requested pursuant to this Section 4.2 in immediately available funds
by crediting or wiring such proceeds to the deposit account of the Borrowers
identified in the most recent notice substantially in the form of EXHIBIT C
hereto (a "NOTICE OF ACCOUNT DESIGNATION") delivered by the Borrowers to the
Administrative Agent or as may be otherwise agreed upon by the Borrowers and the
Administrative Agent from time to time. Subject to Section 5.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Term Loan requested pursuant to this Section 4.2 to the extent
that any Lender has not made available to the Administrative Agent its Term C
Loan Percentage of any Term C Loan or its Term D Loan Percentage of any Term D
Loan.
33
SECTION 4.3 SCHEDULED REPAYMENT OF TERM LOANS.
(a) The Borrowers shall repay the aggregate outstanding principal
amount of the Term A Loans in consecutive quarterly installments on the last
Business Day of each of September, December, March and June and on the Term A
Loan Maturity Date, in an amount equal to the amount obtained by multiplying the
corresponding quarterly percentage TIMES the aggregate principal amount of the
Term A Loans outstanding on the last Business Day of June, 2004 in accordance
with the following table:
-------------------------------- --------------------------- --------------
Quarters Ending Reduction Total
Per Quarterly Payment Reduction
-------------------------------- --------------------------- --------------
6/30/2004 through 9/30/2004 1.25% 2.5%
12/31/2004 through 9/30/2005 2.50% 10.0%
12/31/2005 through 9/30/2006 6.25% 25.0%
12/31/2006 through 6/30/2008 7.50% 10.0%
------
100.0%
-------------------------------- --------------------------- --------------
If not sooner paid, the Term A Loans shall be paid in full, together with
accrued interest thereon and any other amounts payable with respect thereto, on
the Term A Loan Maturity Date.
(b) The Borrowers shall repay the aggregate outstanding principal
amount of the Term B Loans in consecutive quarterly installments on the last
Business Day of each of September, December, March and June and on the Term B
Loan Maturity Date, by multiplying the corresponding quarterly percentage TIMES
the aggregate principal amount of the Term B Loans outstanding on the last
Business Day of June, 2004 in accordance with the following table:
------------------------------ ----------------------------- ----------------
Quarters Ending Reduction Total
Per Quarterly Payment Reduction
------------------------------ ----------------------------- ----------------
6/30/2004 through 9/30/2008 0.25% 4.5%
12/30/2008 47.5% 47.5%
Term B Loan Maturity Date N/A 48.0%
------
100.0%
------------------------------ ----------------------------- ----------------
If not sooner paid, the Term B Loans shall be paid in full, together with
accrued interest thereon and any other amounts payable with respect thereto, on
the Term B Loan Maturity Date.
34
(c) The Borrowers shall repay the entire aggregate outstanding
principal amount of the Term C Loans (including any outstanding Term C Loan
Deferred Interest), on the Term C Loan Maturity Date.
(d) The Borrowers shall repay the aggregate outstanding principal
amount of the Term D Loans in consecutive quarterly installments on the last
Business Day of each of September, December, March and June and on the Term D
Loan Maturity Date, by multiplying the corresponding quarterly percentage TIMES
the aggregate principal amount of the Term D Loans outstanding on the last
Business Day of June, 2004 (including any Term D Loans made on such date) in
accordance with the following table:
----------------------------- ----------------------------- -----------------
Quarters or Period Ending Reduction Total
Per Quarterly Payment Reduction
----------------------------- ----------------------------- -----------------
6/30/2004 through 9/30/2008 0.25% 4.5%
12/30/2008 47.5% 47.5%
Term D Loan Maturity Date N/A 48.0%
-----
100.0%
----------------------------- ----------------------------- -----------------
If not sooner paid, the Term D Loans shall be paid in full, together with
accrued interest thereon and any other amounts payable with respect thereto, on
the Term D Loan Maturity Date.
SECTION 4.4 EXCESS TERM LOANS.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) EXCESS TERM D LOANS. If at any time the outstanding principal
amount of all Term D Loans exceeds the maximum permitted outstanding amount
pursuant to Section 4.1(d), the Borrowers shall repay no later than the next
Business Day following notice from the Administrative Agent, by payment to the
Administrative Agent for the account the Term D Lenders, Term D Loans in an
amount equal to such excess, PROVIDED, that if any simultaneous repayment of
Revolving Credit Loans, Term A Loans, Term B Loans, Term C Loans or Term C Loan
Deferred Interest is required pursuant to this Agreement, repayment required
pursuant to this Section 4.4(c) shall be made prior to any such other repayment.
35
SECTION 4.5 COMMITMENT REDUCTION; PREPAYMENTS OF TERM LOANS.
(a) VOLUNTARY COMMITMENT REDUCTION. The Borrowers shall have the right
at any time and from time to time, upon at least five (5) Business Days prior
written notice to the Administrative Agent, without premium or penalty, to
terminate in whole at any time or permanently reduce in part from time to time,
any unused portion of the Term D Loan Commitment, from time to time, in an
aggregate principal amount not less than $100,000 or any whole multiple of
$50,000 in excess thereof.
(b) OPTIONAL REPAYMENT OF TERM LOANS. The Borrowers shall have the
right at any time and from time to time, upon delivery to the Administrative
Agent of a Notice of Prepayment at least three (3) Business Days prior to any
repayment, to prepay the Term Loans in whole or in part. Each optional
prepayment of the Term Loans hereunder shall be in an aggregate principal amount
of at least $2,000,000 or any whole multiple of $500,000 in excess thereof and
shall be applied in the manner set forth in Section 4.5(c)(vi). Each repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.
(c) MANDATORY PREPAYMENT OF TERM LOANS.
(i) DEBT PROCEEDS. The Borrowers shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.5(c)(vi) in amounts equal to one hundred percent (100%) of the aggregate Net
Cash Proceeds from any issuance of Debt permitted by Section 11.1(c) or (i) by
the Company, any Borrower or any of their respective Subsidiaries. Such
prepayment shall be made within three (3) Business Days after the date of
issuance of any such Debt.
(ii) EQUITY PROCEEDS. The Borrowers shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.5(c)(vi) in amounts equal to one hundred percent (100%) of the aggregate Net
Cash Proceeds from any offering of equity securities permitted hereunder by the
Company, any Borrower or any of their respective Subsidiaries. Such prepayment
shall be made within three (3) Business Days after the date of consummation of
any such equity offering.
(iii) ASSET SALE PROCEEDS. The Borrowers shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.5(c)(vi) in amounts equal to one hundred percent (100%) of the aggregate Net
Cash Proceeds (as long as such Net Cash Proceeds exceed $2,000,000 in the
aggregate in any Fiscal Year and then only such excess) from the sale or other
disposition of assets by the Company, any Borrower or any of their respective
Subsidiaries in each case pursuant to Section 11.6(e).
36
(iv) INSURANCE AND CONDEMNATION PROCEEDS. The Borrowers shall
make mandatory principal prepayments of the Term Loans in the manner set forth
in Section 4.5(c)(vi) in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds (as long as such Net Cash Proceeds exceed $1,000,000
in the aggregate in any Fiscal Year and then only such excess) received by the
Company, any Borrower or any of their respecting Subsidiaries (or by the
Administrative Agent as loss payee) under any property or casualty insurance
policy thereof or from any condemnation proceeding which proceeds have not been
utilized within 180 days of receipt by such Person to purchase replacement
assets. Such reduction shall be made on the earlier of 180 days after any such
receipt or the date the Borrowers notify the Administrative Agent of such
Person's intention not to so utilize such Net Cash Proceeds.
(v) EXCESS CASH FLOW; TAX REFUNDS. (A) Commencing with the
Fiscal Year ending December 31, 2003, the Borrowers shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.5(c)(vi) in amounts equal to seventy-five percent (75%) of Excess Cash Flow,
if any, for each Fiscal Year. Such prepayment shall be made within ninety (90)
days of the corresponding Fiscal Year end.
(B) Within thirty (30) days after the date of receipt by the
Company or any of its Subsidiaries of any refund or return of any payment solely
with respect to income taxes of the Company or any of its Subsidiaries (and not
with respect to any other Taxes or Other Taxes), which refund or return of
payment exceeds $2,000,000, the Borrowers shall make mandatory principal
prepayments of the Term Loans in the manner set forth in Section 4.5(c)(vi) in
amounts equal to seventy-five percent (75%) of such refund or return.
(vi) NOTICE; MANNER OF PAYMENT. Upon the occurrence of any
event triggering the prepayment requirement under Sections 4.5(c)(i) through and
including 4.5(c)(v), the Borrowers shall promptly deliver a Notice of Prepayment
to the Administrative Agent and upon receipt of such notice, the Administrative
Agent shall promptly so notify the Lenders. Each prepayment under this Section
4.5(c) shall be applied as follows: FIRST, to all accrued and unpaid interest on
the Term D Loans, on a PRO RATA basis; SECOND, to the outstanding principal
installments of the Term D Loans on a PRO RATA basis; THIRD, to any outstanding
Term C Loan Deferred Interest, on a PRO RATA basis; and FOURTH, to the extent of
any excess (such excess, the "EXCESS PROCEEDS"), PRO RATA among the principal
amounts outstanding in reverse order of maturity of the Term A Loan Facility,
the Term B Loan Facility, the Term C Facility and the Revolving Credit Facility,
applied (A) in the case of prepayments arising under Sections 4.5(c)(i) and
4.5(c)(ii), in inverse order of maturity to the remaining scheduled principal
installments (or, as applicable, interest) in respect thereof and (B) in the
case of prepayments arising under Section 4.5(c)(iii), 4.5(c)(iv) and 4.5(c)(v),
PRO RATA to the remaining scheduled principal installments (or applicable
interest) in respect thereof; PROVIDED, that any Term B Lender or Term C Lender
may elect to have its PRO RATA share (based on its Term B Loan Percentage or
Term C Loan Percentage, as applicable) of any mandatory prepayment under Section
4.5(c)(vi) (any such amount, "REFUSED PROCEEDS") be applied to, the Term A Loan
Facility and the Revolving Credit Facility as set forth below (any such
election, a "PAYMENT REFUSAL"):
37
(1) to the Term A Loans reducing the outstanding principal
installments thereof on a PRO RATA basis with respect to each
prepayment; and
(2) to repay Revolving Credit Loans pursuant to Section
2.4(c) and to reduce permanently the Revolving Credit Commitment
pursuant to Section 2.6(b);
PROVIDED FURTHER that if Refused Proceeds remain after the prepayment applied in
accordance with the foregoing proviso, the amount of such excess Refused
Proceeds shall be reapplied to the PRO RATA share of any Term B Lenders or Term
C Lenders that have made a Payment Refusal election (which repayment such Term B
Lenders and Term C Lenders may not refuse) and applied to the Term B Loans and
the Term C Loans as set forth above. Any such Term B Lender or Term C Lender
that makes a Payment Refusal shall, no later than 11:00 a.m. (Charlotte time)
two (2) Business Days preceding the date specified for any prepayment of the
Loans, notify the Administrative Agent in writing of such election. Each
mandatory prepayment shall be accompanied by any amount required to be paid
pursuant to Section 5.9 hereof.
SECTION 4.6 TERM NOTES.
(a) TERM A NOTES. Each Term A Lender's Term A Loans and the obligations
of the Borrowers to repay such Term A Loans shall be evidenced by a separate
Term A Note executed by the Borrowers payable to the order of such Term A
Lender. Each Term A Note shall be dated the date hereof and shall bear interest
on the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
(b) TERM B NOTES. Each Term B Lender's Term B Loans and the obligations
of the Borrowers to repay such Term B Loans shall be evidenced by a separate
Term B Note executed by the Borrowers payable to the order of such Term B
Lender. Each Term B Note shall be dated the date hereof and shall bear interest
on the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
(c) TERM C NOTES. Each Term C Lender's Term C Loans and the obligations
of the Borrowers to repay such Term C Loans shall be evidenced by a separate
Term C Note executed by the Borrowers payable to the order of such Term C
Lender. Each Term C Note shall be dated the date hereof and shall bear interest
on the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
(d) TERM D NOTES. Each Term D Lender's Term D Loans and the obligations
of the Borrowers to repay such Term D Loans shall be evidenced by a separate
Term D Note executed by the Borrowers payable to the order of such Term D
Lender. Each Term D Note shall be dated the date hereof and shall bear interest
on the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
38
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 INTEREST.
(a) INTEREST RATE OPTIONS. Subject to the provisions of this Section
5.1, at the election of the Borrowers, the Revolving Credit Loans, the Term A
Loans, the Term B Loans, the Term C Loans and the Term D Loans shall bear
interest at (A) the Base Rate plus the Applicable Margin as set forth in Section
5.1(c) or (B) the LIBOR Rate PLUS the Applicable Margin as set forth in Section
5.1(c); PROVIDED that with respect to Term C Loans, the LIBOR Rate shall not be
available until three (3) Business Days after the Closing Date. The Borrowers
shall select the rate of interest and Interest Period, if any, applicable to any
Loan at the time a Notice of Borrowing is given pursuant to Section 4.2(c) or
(d) or at the time a Notice of Conversion/Continuation is given pursuant to
Section 5.2. Each Loan or portion thereof bearing interest based on the Base
Rate shall be a "BASE RATE Loan", each Loan or portion thereof bearing interest
based on the LIBOR Rate shall be a "LIBOR RATE LOAN". Any Loan or any portion
thereof as to which the Borrowers have not duly specified an interest rate as
provided herein shall be deemed a Base Rate Loan.
(b) INTEREST PERIODS. In connection with each LIBOR Rate Loan, the
Borrowers, by giving notice at the times described in Section 5.1(a), shall
elect an interest period (each, an "INTEREST PERIOD") to be applicable to such
Loan, which Interest Period shall be a period of one (1), two (2) or three (3)
months with respect to each LIBOR Rate Loan; PROVIDED that:
(i) the Interest Period shall commence on the date of
advance of or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding Interest
Period expires;
(ii) if any Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; PROVIDED that if any Interest Period
with respect to a LIBOR Rate Loan would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR
Rate Loan that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Business Day of the relevant calendar month at the end of such
Interest Period;
39
(iv) no Interest Period shall extend beyond the
Revolving Credit Termination Date, the Term A Loan Maturity Date, the
Term B Loan Maturity Date, the Term C Loan Maturity Date or the Term D
Loan Maturity Date, as applicable, to the respective LIBOR Rate Loan,
and Interest Periods shall be selected by the Borrowers so as to permit
the Borrowers to make mandatory reductions of the Revolving Credit
Loans, the Term A Loans, the Term B Loans, the Term C Loans and the
Term D Loans pursuant to Section 4.3 without payment of any amounts
pursuant to Section 5.9; and
(v) there shall be no more than twelve (12)
Interest Periods outstanding at any time.
(c) APPLICABLE MARGIN. The Applicable Margin provided for in
Section 5.1(a) with respect to the Loans (the "APPLICABLE MARGIN")
(i) with respect to Term B Loans, shall be as follows:
------------------------------------------------------------------------------
Applicable Margin Applicable Margin
LIBOR Rate Base Rate
------------------------------------------------------------------------------
4.750% 3.750%
------------------------------------------------------------------------------
(ii) with respect to Term C Loans, shall be as follows:
------------------------------------------------------------------------------
Applicable Margin Applicable Margin
LIBOR Rate Base Rate
------------------------------------------------------------------------------
5.750% 4.750%
------------------------------------------------------------------------------
and (iii) with respect to Revolving Credit Loans, Term A Loans and Term D
Loans, shall be as follows:
------------------------------------------------------------------------------
Company Leverage Applicable Margin Applicable Margin
Ratio LIBOR Rate Base Rate
------------------------------------------------------------------------------
>6.0x 4.000% 3.000%
-
> 5.0x but < 6.0x 2.750% 1.750%
-
> 4.0x but < 5.0x 2.500% 1.500%
-
<4.0x 2.250% 1.250%
------------------------------------------------------------------------------
40
(d) DEFAULT RATE. Subject to Section 12.3, if notified by the
Administrative Agent at the direction of the Required Lenders, upon the
occurrence and during the continuance of an Event of Default, (i) the Borrowers
shall no longer have the option to request LIBOR Rate Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the highest possible rate set forth in Section 5.1(c)
applicable to LIBOR Rate Loans until the end of the applicable Interest Period
and thereafter at a rate equal to two percent (2%) in excess of the highest
possible rate set forth in Section 5.1(c) applicable to Base Rate Loans, and
(iii) all outstanding Base Rate Loans and other Obligations shall bear interest
at a rate per annum equal to two percent (2%) in excess of the highest possible
rate set forth in Section 5.1(c) applicable to Base Rate Loans or such other
Obligations. Interest shall continue to accrue on the Notes after the filing by
or against the Borrowers of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.
(e) INTEREST PAYMENT AND COMPUTATION. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 2002; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto and, if such
Interest Period exceeds one month, also at the end of each month occurring
during such Interest Period; PROVIDED, HOWEVER, that interest on the Term C
Loans that would otherwise be payable from the Closing Date through March 31,
2004 shall accrue monthly and be added to the principal amount of the Term C
Loans (such amount being the "TERM C LOAN DEFERRED INTEREST") and be payable at
(and only at) the Term C Loan Maturity Date (subject to the provisions of
Section 4.5(c)(vi)). Interest on LIBOR Rate Loans shall be computed on the basis
of a 360-day year and assessed for the actual number of days elapsed and
interest on Base Rate Loans and all fees payable hereunder shall be computed on
the basis of a 365/66-day year and assessed for the actual number of days
elapsed.
(f) MAXIMUM RATE. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction or an arbitration panel shall, in a final
determination, deem applicable hereto. In the event that such a court or
arbitration panel determines that the Lenders have charged or received interest
hereunder in excess of the highest applicable rate, the rate in effect hereunder
shall automatically be reduced to the maximum rate permitted by Applicable Law
and the Lenders shall at the Administrative Agent's option (i) promptly refund
to the Borrowers any interest received by Lenders in excess of the maximum
lawful rate or (ii) shall apply such excess to the principal balance of the
Obligations. It is the intent hereof that the Borrowers not pay or contract to
pay, and that neither the Administrative Agent nor any Lender receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by the Borrowers under Applicable Law.
41
SECTION 5.2 NOTICE AND MANNER OF CONVERSION OR CONTINUATION OF LOANS.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to (a) convert at any time following the third
Business Day after the Closing Date all or any portion of its outstanding Base
Rate Loans in a principal amount equal to $500,000 or any whole multiple of
$250,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the
expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $2,000,000 or a
whole multiple of $500,000 in excess thereof into Base Rate Loans or (ii)
continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers
desire to convert or continue Loans as provided above, the Borrowers shall give
the Administrative Agent irrevocable prior written notice in the form attached
as EXHIBIT E (a "NOTICE OF CONVERSION/CONTINUATION") not later than 11:00 a.m.
(Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Loans to be converted or continued, and
(D) the Interest Period to be applicable to such converted or continued LIBOR
Rate Loan. The Administrative Agent shall promptly notify the Lenders of such
Notice of Conversion/Continuation.
SECTION 5.3 AGENTS' AND OTHER FEES.
In order to compensate the Agents with respect to the Credit Facility,
the Borrowers agree to pay to Wachovia and Wachovia Securities, Inc. the fees
set forth in the separate fee letter agreement executed by the Company with
respect to the Credit Facility dated September 13, 2002.
SECTION 5.4 MANNER OF PAYMENT. (a) Each payment by the Borrowers on
account of the principal of or interest on the Revolving Credit Loans or of any
fee, commission or other amounts (including the Reimbursement Obligation)
payable to the Revolving Credit Lenders under this Agreement with respect to the
Revolving Credit Loans, the Letters of Credit, any Revolving Credit Note shall
be made not later than 1:00 p.m. (Charlotte time) on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office for the account of the Revolving Credit Lenders PRO RATA in
accordance with their respective Revolving Credit Commitment Percentages (except
as specified below), in Dollars, in immediately available funds and shall be
made without any set-off, counterclaim or deduction whatsoever, (b) each payment
by the Borrowers on account of the principal of or interest on the Term A Loans
or of any fee, commission or other amounts payable to the Term A Lenders under
this Agreement with respect to the Term A Loans or any Term A Note shall be made
in like manner, but for the account of the Term A Lenders PRO RATA in accordance
with their respective Term A Loan Percentages (except as specified below),
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(c)each payment by the Borrowers on account of the principal of or interest on
the Term B Loans or of any fee, commission or other amounts payable to the Term
B Lenders under this Agreement with respect to the Term B Loans or any Term B
Note shall be made in like manner, but for the account of the Term B Lenders
PRO RATA in accordance with their respective Term B Loan Percentages (except as
specified below), (d) each payment by the Borrowers on account of the principal
of or interest on the Term C Loans or of any fee, commission or other amounts
payable to the Term C Lenders under this Agreement with respect to the Term C
Loans or any Term C Note shall be made in like manner, but for the account of
the Term C Lenders PRO RATA in accordance with their respective Term C Loan
Percentages (except as specified below), (e) each payment by the Borrowers on
account of the principal of or interest on the Term D Loans or of any fee,
commission or other amounts payable to the Term D Lenders under this Agreement
with respect to the Term D Loans or any Term D Note shall be made in like
manner, but for the account of the Term D Lenders PRO RATA in accordance with
their respective Term D Loan Percentages (except as specified below) and (f) any
other amounts payable to the Lenders under this Agreement shall be made in like
manner, but for the account of the Lenders PRO RATA in accordance with their
respective share of the Obligations with respect to which such payment was
received (except as specified below); SUBJECT, in each case, to the terms of
Section 4.5(c)(vi) and of the Intercreditor Agreement. Any payment received
after such time but before 2:00 p.m. (Charlotte time) on such day shall be
deemed a payment on such date for the purposes of Section 12.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 2:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth
herein its PRO RATA share of such payment in accordance with such Lender's
Revolving Credit Commitment Percentage, Term A Loan Percentage, Term B Loan
Percentage, Term C Loan Percentage or Term D Loan Percentage, as applicable
(except as specified below and subject to the terms of Section 4.5(c)(vi) the
Intercreditor Agreement), and shall wire advice of the amount of such credit to
each Lender. Each payment to the Administrative Agent of the Issuing Lender's
fees or L/C Participants' commissions shall be made in like manner, but for the
account of the Issuing Lender or the L/C Participants, as the case may be. Each
payment to the Administrative Agent of Administrative Agent's fees or expenses
shall be made for the account of the Administrative Agent and any amount payable
to any Lender under Sections 5.8, 5.9, 5.10, 5.11 or 15.2 shall be paid to the
Administrative Agent for the account of the applicable Lender. Subject to
Section 5.1(b)(ii), if any payment under this Agreement or any Note shall be
specified to be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing any interest if payable along with
such payment.
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SECTION 5.5 CREDITING OF PAYMENTS AND PROCEEDS. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder, then to all indemnity obligations then
due and payable by the Borrowers hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
hereunder on the Term D Loans to the Term D Lenders, then to the principal
amount outstanding under the Term D Loans to the Term D Lenders, then to Term C
Loan Deferred Interest, then to accrued but unpaid interest on the other Notes,
the Reimbursement Obligation and any termination payments due in respect of a
Hedging Agreement related to the Obligations with any Lender (which such Hedging
Agreement is permitted or required hereunder) (PRO RATA in accordance with all
such amounts due), then to the principal amount of the other Notes and
Reimbursement Obligation (PRO RATA in accordance with all such amounts due) and
then to the cash collateral account described in Section 12.2(b) hereof to the
extent of any L/C Obligations then outstanding, in that order.
SECTION 5.6 ADJUSTMENTS. If any Lender (a "BENEFITED LENDER") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, or interest thereon, except to the extent otherwise
expressly provided for herein (including under Section 4.5(c)(vi) or 5.5) or in
the Intercreditor Agreement, such Benefited Lender shall purchase for cash from
the other Lenders such portion of each such other Lender's Extensions of Credit,
or shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; PROVIDED, that if all or any portion of such excess payment
or benefits is thereafter recovered from such Benefited Lender, such purchase
shall be rescinded, and the purchase price and benefits returned to the extent
of such recovery, but without interest unless the Benefitted Lender is required
to pay interest thereon, in which case each Lender returning funds to the
Benefitted Lender shall pay its PRO RATA share of such interest. The Borrowers
agree that each Lender so purchasing a portion of another Lender's Extensions of
Credit may exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.
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SECTION 5.7 NATURE OF OBLIGATIONS OF LENDERS REGARDING EXTENSIONS OF
CREDIT; ASSUMPTION BY THE ADMINISTRATIVE AGENT. The obligations of the Lenders
under this Agreement to make the Loans and participate in Letters of Credit are
several and are not joint or joint and several. Unless the Administrative Agent
shall have received notice from a Lender prior to a proposed borrowing date that
such Lender will not make available to the Administrative Agent such Lender's
ratable portion of the amount to be borrowed on such date (which notice shall
not release such Lender of its obligations hereunder), the Administrative Agent
may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with Section
4.2(e), and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrowers on such date a corresponding amount. If such amount
is made available to the Administrative Agent on a date after such borrowing
date, such Lender shall pay to the Administrative Agent on demand an amount,
until paid, equal to the product of (a) the amount not made available by such
Lender in accordance with the terms hereof, TIMES (b) the daily average Federal
Funds Rate during such period as determined by the Administrative Agent, TIMES
(c) a fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest error. If such
Lender's Term C Loan Percentage or Term D Loan Percentage, as applicable, of
such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days after such borrowing date, the Administrative
Agent shall be entitled to recover such amount made available by the
Administrative Agent with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrowers. The failure of any
Lender to make available its Term C Loan Percentage or Term D Loan Percentage,
as applicable, of any Loan requested by the Borrowers shall not relieve it or
any other Lender of its obligation, if any, hereunder to make its Term C Loan
Percentage or Term D Loan Percentage, as applicable, of such Loan available on
the borrowing date, but no Lender shall be responsible for the failure of any
other Lender to make its Term C Loan Percentage or Term D Loan Percentage, as
applicable, of such Loan available on the borrowing date.
SECTION 5.8 CHANGED CIRCUMSTANCES.
(a) CIRCUMSTANCES AFFECTING LIBOR RATE AVAILABILITY. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via the Dow ▇▇▇▇▇
Market Screen 3750 or offered to the Administrative Agent or such Lender for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Borrowers.
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Thereafter, until the Administrative Agent notifies the Borrowers that such
circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate
Loans and the right of the Borrowers to convert any Loan to or continue any
Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers shall repay in
full (or cause to be repaid in full) the then outstanding principal amount of
each such LIBOR Rate Loan together with accrued interest thereon, on the last
day of the then current Interest Period applicable to such LIBOR Rate Loan or
convert the then outstanding principal amount of each such LIBOR Rate Loan to a
Base Rate Loan as of the last day of such Interest Period.
(b) LAWS AFFECTING LIBOR RATE AVAILABILITY. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrowers and the
other Lenders. Thereafter, until the Administrative Agent notifies the Borrowers
that such circumstances no longer exist, (i) the obligations of the Lenders to
make LIBOR Rate Loans and the right of the Borrowers to convert any Loan or
continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the
Borrowers may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of
the then current Interest Period applicable thereto as a LIBOR Rate Loan, the
applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan
for the remainder of such Interest Period.
(c) INCREASED COSTS. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Authority, central
bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with
respect to any Note, Letter of Credit or Application or shall change
the basis of taxation of payments to any of the Lenders (or any of
their respective Lending Offices) of the principal of or interest on
any Note, Letter of Credit or Application or any other amounts due
under this Agreement in respect thereof (except for changes in the rate
of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such
Lender is organized or is or should be qualified to do business or such
Lending Office is located); or
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(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit, insurance or
capital or similar requirement against assets of, deposits with or for
the account of, or credit extended by any of the Lenders (or any of
their respective Lending Offices) or shall impose on any of the Lenders
(or any of their respective Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Note; and the
result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating
in Letters of Credit or to reduce the yield or amount of any sum
received or receivable by any of the Lenders under this Agreement or
under the Notes in respect of a LIBOR Rate Loan or Letter of Credit or
Application, then such Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify the Borrowers
of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrowers shall
pay to such Lender such additional amount or amounts as will compensate
such Lender or Lenders for such increased cost or reduction. The
Administrative Agent will promptly notify the Borrowers of any event of
which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 5.8(c); PROVIDED, that the Administrative
Agent shall incur no liability whatsoever to the Lenders or the
Borrowers in the event it fails to do so. The amount of such
compensation shall be determined by such Lender in its reasonable
discretion based upon the assumption that such Lender funded its
Revolving Credit Commitment Percentage, Term A Loan Percentage, Term B
Loan Percentage, Term C Loan Percentage or Term D Loan Percentage, as
applicable, of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender
deems reasonably appropriate and practical. A certificate of such
Lender setting forth the basis for determining such amount or amounts
necessary to compensate such Lender shall be forwarded to the Borrowers
through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
SECTION 5.9 INDEMNITY. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrowers to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow or
convert on a date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion, as applicable or (c) due to any payment, prepayment or
conversion of any LIBOR Rate Loan on a date other than the last day of the
Interest Period therefor. The amount of such loss or expense shall be determined
by such Lender in its reasonable discretion based upon the assumption that such
Lender funded its Revolving Credit Commitment Percentage, Term A Loan
Percentage, Term B Loan Percentage, Term C Loan Percentage or Term D Loan
Percentage, as applicable, of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems reasonably appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrowers through the
Administrative Agent and shall be conclusively presumed to be correct save for
manifest error.
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SECTION 5.10 CAPITAL REQUIREMENTS. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which such Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 5.11 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by the Borrowers
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If the
Borrowers shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder or under any Note or in respect of any
Letter of Credit to any Lender or the Administrative Agent, (A) the sum payable
shall be increased as may be necessary so that after making all required
deductions or withholdings (including deductions or withholdings applicable to
additional sums payable under this Section 5.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrowers shall make such deductions, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with Applicable Law, and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other Governmental Authority in the manner provided in Section 5.11(d).
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(b) STAMP AND OTHER TAXES. In addition, the Borrowers shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereof (hereinafter referred to as
"OTHER TAXES").
(c) INDEMNITY. The Borrowers shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted,
except for any such penalties, interest and expenses assessed against or
incurred by the Administrative Agent or such Lender as a result of its own gross
negligence or willful misconduct as determined (in a formal determination) by a
court of competent jurisdiction or an arbitration panel. Such indemnification
shall be made within thirty (30) days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
(d) EVIDENCE OF PAYMENT. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in Section 15.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) DELIVERY OF TAX FORMS. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrowers, with a copy to the Administrative Agent, on or prior to the
Closing Date or concurrently with the delivery of the relevant Assignment and
Acceptance, (i) two United States Internal Revenue Service Forms W-8ECI or Forms
W-8BEN, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) either (A) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding taxes or (B) a certificate executed by such Lender
certifying that such Lender is not a "bank" and that such Lender qualifies for
such exemption under Section 881(c) of the Code. Each such Lender further agrees
to deliver to the Borrowers, with a copy to the Administrative Agent, a Form
W-8BEN or W-8ECI and Form W-8 or W-9, or successor applicable forms or manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrowers,
certifying in the case of a Form W-8BEN or W-8ECI that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrowers and the Administrative Agent that it is
not entitled to receive payments without deduction or withholding of United
States federal income taxes) and, in the case of a Form W-8BEN or W-8BECI,
establishing an exemption from United States backup withholding tax.
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(f) SURVIVAL. Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 5.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 5.12 SECURITY. The Obligations of the Company and the Borrowers
shall be secured as provided in the Security Documents.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 CLOSING. The closing shall take place at the offices of
Shearman & Sterling at 10:00 a.m. on September 13, 2002 or at such other time or
on such other date as the parties hereto shall mutually agree.
SECTION 6.2 CONDITIONS TO CLOSING. The obligation of the Lenders to
close the transactions contemplated by this Agreement is subject to the
satisfaction or waiver of each of the following conditions:
(a) EXECUTED LOAN DOCUMENTS. This Agreement, the Revolving Credit
Notes, the Term A Notes, the Term B Notes, the Term C Notes, the Term D Notes,
the Intercreditor Agreement, the Security Agreement, the Pledge Agreement, and
each Mortgage required hereunder shall have been duly authorized, executed and
delivered to the Administrative Agent by the parties thereto, shall be in full
force and effect and no default or event of default shall exist thereunder, and
the Borrowers shall have delivered original counterparts thereof to the
Administrative Agent.
(b) CLOSING CERTIFICATES; ETC.
(i) OFFICER'S CERTIFICATE OF THE COMPANY. The
Administrative Agent shall have received a certificate from a Responsible
Officer, in form and substance satisfactory to the Administrative Agent, to the
effect that (A) all representations and warranties of the Company and the
Borrowers contained in this Agreement and the other Loan Documents are true,
correct and complete; (B) the Company and the Borrowers are not in violation of
any of the covenants contained in this Agreement and the other Loan Documents;
(C) after giving effect to the transactions contemplated by this Agreement and
the Related Transactions, no Default or Event of Default has occurred and is
continuing; (D) attached thereto are copies of any amendments or other
modifications to the Transaction Agreement, the Bridge Loan Agreement, the
Preferred Equity Documents or the Existing Warrants effected after the "Closing
Date" (as defined in the Second Amended and Restated Credit Agreement) and on
or prior to the Closing Date and each of the Related Transaction Documents, in
each case, as in effect at the Closing Date; and (E) the Company and the
Borrowers have satisfied each of the closing conditions set forth in this
Agreement.
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(ii) CERTIFICATE OF SECRETARY OF THE COMPANY AND EACH
BORROWER. The Administrative Agent shall have received a certificate of the
secretary or assistant secretary of the Company and each Borrower certifying as
to the incumbency and genuineness of the signature of each officer thereof
executing Loan Documents to which it is a party and certifying that attached
thereto is a true, correct and complete copy of (A) the articles of
incorporation or certificate of formation of the Company or the corresponding
Borrower, as applicable, and all amendments thereto, certified as of a recent
date by the appropriate Governmental Authority in its jurisdiction of
incorporation (B) the bylaws or limited liability company agreements of the
Company or the corresponding Borrower, as applicable, as in effect on the date
of such certifications and (C) resolutions duly adopted by the board of
directors of the Company or the corresponding Borrower, as applicable,
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party.
(iii) CERTIFICATES OF GOOD STANDING. The
Administrative Agent shall have received certificates as of a recent date of
the good standing of the Company and each Borrower under the laws of its
jurisdiction of organization and each other jurisdiction where such Person is
qualified to do business and a certificate of a Responsible Officer of the
Company certifying that the Company and the Borrowers have filed all required
tax returns and that the Company has no knowledge or notice of any delinquent
taxes.
(iv) OPINIONS OF COUNSEL. The Administrative Agent
(A) shall have received favorable opinions of counsel (including corporate
and communications law regulatory counsel) to the Company and the Borrowers
addressed to the Administrative Agent and the Lenders with respect to the
Company, the Borrowers, the Loan Documents and such other matters as the
Lenders shall request and (B) shall be entitled to rely on all opinions
delivered on or around the Closing Date, if any, in connection with the
Preferred Equity Documents and Bridge Loan Documents pursuant to reliance
language reasonably satisfactory to the Administrative Agent.
(v) TAX FORMS. The Administrative Agent shall have
received copies of the United States Internal Revenue Service forms required by
Section 5.11(e) hereof.
(c) COLLATERAL.
(i) FILINGS AND RECORDINGS. All filings or
recordations that are necessary to perfect the Liens of the Lenders in the
collateral described in the Security Documents shall have been either filed or
recorded or forwarded for filing or recording in all appropriate locations and
the Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that such Liens constitute or upon such filings and
recordations such Liens shall constitute valid and perfected first priority
Liens therein.
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(ii) PLEDGED COLLATERAL. The Administrative Agent
shall have received (A) original stock certificates or other certificates
evidencing the capital stock or other ownership interests pledged pursuant to
the Pledge Agreement, together with an undated stock power for each such
certificate duly executed in blank by the registered owner thereof and (B) each
original promissory note pledged pursuant to the Pledge Agreement.
(iii) LIEN SEARCHES. To the extent requested
thereby, the Administrative Agent shall have received the results of a Lien
search (including a search as to judgments, pending litigation and tax matters)
made against the Company and the Borrowers under the Uniform Commercial Code
(or applicable judicial docket) as in effect in the state in which each of them
is incorporated and any state in which any of their respective assets are
located, indicating among other things that such assets are free and clear of
any Lien except for Liens permitted hereunder.
(iv) HAZARD AND LIABILITY INSURANCE. The
Administrative Agent shall have received certificates of insurance, evidence
of payment of all insurance premiums for the current policy year of each, and,
if requested by the Administrative Agent, copies (certified by a Responsible
Officer) of insurance policies in the form required under the Security
Documents and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
(v) REAL PROPERTY SECURITY AND INFORMATION.
The Administrative Agent shall have received (A) with respect to each
landlord consent and mortgagee estoppel letter in existence on the Closing Date,
letters notifying each party to such agreement of this Agreement and the
transactions contemplated thereby (the originals of which shall have been
forwarded on the Closing Date to such parties) and (B) such other certificates,
documents, opinions of counsel and information related thereto, in each case as
are reasonably requested by the Lenders, in form and substance satisfactory to
the Administrative Agent.
(d) CONSENTS; DEFAULTS.
(i) NO INJUNCTION, ETC. No action,
proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby.
(ii) NO EVENT OF DEFAULT. No Default or Event
of Default shall have occurred andbe continuing.
(e) FINANCIAL MATTERS.
(i) FINANCIAL STATEMENTS. The Administrative
Agent shall have received the most recent form 10-Q filed by the Company with
the SEC.
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(ii) FINANCIAL CONDITION CERTIFICATE. The
Company shall have delivered to the Administrative Agent a certificate, in
form and substance satisfactory to the Administrative Agent, and certified as
accurate by a Responsible Officer, that (A) the Company and each Borrower are
Solvent, (B) the Borrowers' payables are current and not past due (except (1)
for those the validity or amount of which are being contested in good faith by
any Borrower by reasonably appropriate means or (2) where the failure to be
current in respect of such payables could not reasonably be expected to have a
Material Adverse Effect), (C) the financial projections previously delivered to
the Administrative Agent represent the good faith estimates of the Borrowers and
senior management thereof as to the projected results contained therein and (D)
attached thereto are calculations evidencing compliance with the covenants
contained in Article X hereof.
(iii) PAYMENT AT CLOSING; FEE LETTERS. The
Company or Borrowers shall have paid the fees and expenses set forth or
referenced in Section 5.3 and Section 15.2, and any other accrued and unpaid
fees or commissions due hereunder (including, without limitation, legal fees
and expenses) to the Administrative Agent and Lenders, and to any other Person
such amount as may be due thereto, in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection
with the preparation, execution, delivery, administration, recording, filing
and registration of any of the Loan Documents.
(iv) RETENTION OF FINANCIAL ADVISORS. The
Borrowers shall have retained independent financial and restructuring
advisers acceptable to the Lenders to evaluate and make recommendations with
respect to the operations of the Borrowers, including market-by-market, shutdown
and headcount rationalization analyses and the cash flow budget, it being
understood that Crossroads, LLC (the financial advisors already engaged by the
Borrowers to perform such role) shall be acceptable to the Lenders.
(v) THIRTEEN WEEK CASH-FLOWS. The Company
shall have delivered to the Administrative Agent a 13-week cash flow
projection in the form contemplated by Section 8.1(e).
(f) MISCELLANEOUS.
(i) PROCEEDINGS AND DOCUMENTS. All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement and the Related Transaction
Documents shall be reasonably satisfactory in form and substance to the Lenders.
The Administrative Agent shall have received copies of the Transaction
Agreement, the Related Transaction Documents (certified as true, correct and
complete by a Responsible Officer), and all other instruments and other evidence
as the Lender may reasonably request, in form and substance reasonably
satisfactory to the Lenders, with respect to the transactions contemplated by
this Agreement and the taking of all actions in connection therewith.
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(ii) BUSINESS PLANS. The Lenders shall have
received copies of any Approved Business Plans and any Approved Budgets
currently in effect with respect to the Permitted Markets; PROVIDED that such
plans and budgets include financial projections through the Fiscal Year ending
2009 that are satisfactory to the Required Lenders, and demonstrate to their
respective satisfaction that no further funding (other than as contemplated
herein) whether in the form of Debt or equity is required to achieve the
results projected in such plans and budgets, and otherwise in form and substance
reasonably satisfactory to the Lenders.
(iii) LUCENT SUBORDINATION AND CONSENT AGREEMENT.
A fully executed copy of the subordination and consent agreement (with respect
to the Lucent Agreement), dated as of October 14, 1998, by and among Lucent
Technologies Inc., the Company and the Administrative Agent shall have been
received by the Administrative Agent, and a copy of the Lucent Agreement as in
effect on the Closing Date.
(iv) OTHER DOCUMENTS. The Company and the Borrowers
shall have delivered to the Lenders such other documents, certificates and
opinions as the Lenders have reasonably requested (including any documents,
certificates and opinions in connection with the Related Transactions).
(v) EXISTING CREDIT AGREEMENT. On the Closing
Date, (A) there shall have been paid in cash (or otherwise credited) in full
all accrued but unpaid interest due on all Extensions of Credit to the Closing
Date, (B) there shall have been paid in cash in full all accrued but unpaid fees
under the Second Amended and Restated Credit Agreement due to the Closing Date
and all other amounts, costs and expenses then owing to any of the existing
Lenders and/or Wachovia, as administrative agent under the Second Amended and
Restated Credit Agreement, and (C) all outstanding promissory notes issued by
the Borrowers to the existing Lenders under the Second Amended and Restated
Credit Agreement shall be deemed superseded and the originally executed copies
thereof shall be promptly returned to the Administrative Agent who shall
forward such notes to the Company, on behalf of the Borrowers.
(vi) GOVERNMENTAL AND THIRD PARTY APPROVALS. The
Company and the Borrowers shall have obtained all necessary approvals,
authorizations and consents of any Person and of all Governmental Authorities
and courts having jurisdiction with respect to the transactions contemplated by
this Agreement and the other Loan Documents and the Related Transactions
(including any approvals of the FCC, any PUC and pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976 but excluding any SEC
authorizations in connection with the Company New Warrants). Each Limited
Subsidiary shall have provided evidence reasonably satisfactory to the
Administrative Agent that, as of the Closing Date, each such Limited
Subsidiary has been authorized by each applicable PUC to incur the Debt and
perform the other Obligations under the Loan Documents in an amount up to
$350,000,000 and that such Limited Subsidiary shall comply with Section 9.21 as
soon as practicable after the Closing Date but in any event, no later than
December 30, 2002 (including evidence of due filings with all relevant PUC's
with respect to this Agreement prior to the Closing Date).
(vii) RECEIPT OF FUNDS. Each Term C Lender shall have
made funds available to the Administrative Agent in the amount of such
Lender's Term C Loan Commitment in order to fund the Term C Facility on the
Closing Date.
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(g) RELATED TRANSACTIONS.
(i) AMENDMENTS TO BRIDGE LOAN DOCUMENTS.
The Bridge Loan Documents shall have been amended in a manner satisfactory to
the Required Lenders, including, but not limited to, extending the date on which
interest on the Bridge Notes is required to be paid in kind until November 9,
2006 and providing, in any event, that (A) prior to the payment in full of all
principal and interest of all Term D Loans, the Required Term D Lenders can
block the payment of cash interest on the Bridge Notes for 180 days and (B) in
any event no cash interest can be paid on the Bridge Notes if a Default has
occurred and is continuing, PROVIDED with respect to the foregoing clause (B)
that such interest block shall be subject to a 180 day blockage period
limitation for non-payment Defaults on terms similar to those contained in
Section 11.7(d) hereof.
(ii) AMENDMENTS TO PREFERRED EQUITY DOCUMENTS. The
Preferred Equity Documents shall be amended to eliminate any existing put
rights (other than the put upon a change of control payable after all
Obligations and Bridge Loans have been paid in full in cash) and to defer any
cash dividends or redemptions so long as there are Obligations outstanding and
otherwise in a manner satisfactory to the Required Lenders.
(iii) ISSUANCE OF COMPANY NEW WARRANTS. The Company
shall have issued and delivered Company New Warrants in the form provided for in
this Agreement to (A) the Term C Lenders PRO RATA in accordance with their
respective Term C Commitment to purchase 20% of the common stock of the Company
on a fully-diluted basis after giving effect to the issuance of such Company New
Warrants and (B) to the Bridge Lenders PRO RATA in accordance with their
respective commitment under the Bridge Loan Agreement to purchase 10% of the
common stock of the Company on a fully-diluted basis after giving effect to the
issuance of such Company New Warrants, it being understood and agreed that the
Company New Warrants, by the Closing Date, shall have been duly approved by the
Company's Board of Directors and a majority of the Company's shareholders.
(iv) AMENDMENTS TO COMPANY EXISTING WARRANTS.
The Company Existing Warrants shall have been amended to extend the expiration
of the exercise period with respect thereto to the fifth anniversary of the
Closing Date and otherwise in a manner satisfactory to the Bridge Lenders.
(v) BRIDGE LOAN SECURITY AGREEMENT AND
SUBORDINATED UPSTREAM GUARANTY. The Company and the Borrowers shall have
executed and delivered the Bridge Loan Security Agreement, the Bridge Loan
Pledge Agreement and the Subordinated Upstream Guaranty.
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SECTION 6.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of
the Lenders to make any Extensions of Credit are subject to the satisfaction of
the following conditions precedent on the relevant borrowing or issue date, as
applicable:
(a) NOTICE OF BORROWING AND NOTICE OF ACCOUNT DESIGNATION. The
Administrative Agent shall have received a Notice of Borrowing in accordance
with Section 4.2(c) or (d), as applicable, and a Notice of Account Designation
specifying the account or accounts to which the proceeds of any Loans made on
and after the Closing Date are to be disbursed.
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in Article VII shall be true and correct in all
material respects on and as of such borrowing or issuance date with the same
effect as if made on and as of such date; except for any representation and
warranty made as of an earlier date, which representation and warranty shall
remain true and correct as of such earlier date.
(c) NO EXISTING DEFAULT. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) or
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(d) OFFICER'S COMPLIANCE CERTIFICATE; ADDITIONAL DOCUMENTS.
The Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, or other item of
information reasonably requested by it.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Extensions of Credit, the Company and the Borrowers hereby
represent and warrant to the Administrative Agent and Lenders that:
(a) ORGANIZATION; POWER; QUALIFICATION. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted, and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except to
the extent that the failure to be so qualified and in good standing could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
jurisdictions in which the Company and the Borrowers are organized and qualified
to do business as of the Closing Date are described on SCHEDULE 7.1(A).
56
(b) OWNERSHIP. Each Subsidiary of the Company as of the Closing Date is
listed on SCHEDULE 7.1(B), and none of such Subsidiaries are inactive. As of the
Closing Date, the capitalization of the Company and its Subsidiaries consists of
the number of shares, authorized, issued and outstanding, of such classes and
series, with or without par value, described on SCHEDULE 7.1(B). All outstanding
shares have been duly authorized and validly issued and are fully paid and
nonassessable. The shareholders of the Subsidiaries of the Company and the
number of shares owned by each as of the Closing Date are described on SCHEDULE
7.1(B). As of the Closing Date, there are no outstanding stock purchase
warrants, subscriptions, options, securities, instruments or other rights of any
type or nature whatsoever, which are convertible into, exchangeable for or
otherwise provide for or permit the issuance of capital stock of the Company or
its Subsidiaries, except as described on SCHEDULE 7.1(B).
(c) AUTHORIZATION OF AGREEMENT, LOAN DOCUMENTS AND BORROWING. Each of
the Company and its Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of the Company and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of the Company or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable remedies.
(d) COMPLIANCE OF AGREEMENT, LOAN DOCUMENTS AND BORROWING WITH LAWS,
ETC. The execution, delivery and performance by the Company and its Subsidiaries
of the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the borrowings hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the giving of
notice or otherwise, (i) require any Governmental Approval or violate any
Applicable Law relating to the Company or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the Company or any of
its Subsidiaries or any indenture, agreement or other instrument to which such
Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents, except with respect to clauses (i) and (iii), except where the
failure of any of the foregoing to be correct in all respects could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(e) COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Each of the Company
and its Subsidiaries (i) has all material Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each such Governmental
Approval applicable to it and in compliance with all other Applicable Laws
relating to it or any of its respective properties, except where the failure of
any of the foregoing to be correct in all respects could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
57
(f) TAX RETURNS AND PAYMENTS. Each of the Company and its Subsidiaries
has duly filed or caused to be filed all federal and all material state, local
and other tax returns required by Applicable Law to be filed, and has paid, or
made adequate provision for the payment of, all federal and all material state,
local and other taxes, assessments and governmental charges or levies upon it
and its property, income, profits and assets which are due and payable (except
for those taxes, assessments and governmental charges or levies which are
contested by the Company or any Subsidiary in good faith and as to which
adequate reserves are maintained with respect thereto in accordance with GAAP).
No Governmental Authority has asserted any Lien or other claim against the
Company or Subsidiary thereof with respect to unpaid taxes which has not been
discharged or resolved (except with respect to such taxes which are being
contested by the Company or any Subsidiary in good faith and as to which
adequate reserves are maintained with respect thereto in accordance with GAAP).
The charges, accruals and reserves on the books of the Company and any of its
Subsidiaries in respect of federal, state, local and other taxes for all Fiscal
Years and portions thereof since the organization of the Company and any of its
Subsidiaries are in the judgment of the Company adequate, and the Company does
not anticipate any additional taxes or assessments for any of such years.
(g) INTELLECTUAL PROPERTY MATTERS. Each of the Company and its
Subsidiaries owns or possesses rights to use all material franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business. No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any such
rights, and to the best of the Company's knowledge, neither the Company nor any
Subsidiary thereof is liable to any Person for infringement under Applicable Law
with respect to any such rights as a result of its business operations other
than any such infringement which, if successfully asserted against or determined
adversely to the Company or any Subsidiary, could not reasonably be expected to
have a Material Adverse Effect.
(h) ENVIRONMENTAL MATTERS. Except where the failure of any of the
following representations to be correct in all respects could not reasonably
be expected to have a Material Adverse Effect:
(i) The properties of the Company and its Subsidiaries do
not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which
(A) constitute or constituted a material violation of applicable
Environmental Laws or (B) could give rise to liability under applicable
Environmental Laws;
(ii) Such properties and all operations conducted in
connection therewith are in material compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations
which could interfere with the continued operation of such properties
or impair the fair saleable value thereof;
58
(iii) Neither the Company nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of their
properties or the operations conducted in connection therewith, nor
does the Company or any Subsidiary thereof have knowledge or reason to
believe that any such notice will be received or is being threatened;
(iv) Hazardous Materials have not been transported or
disposed of from the properties of the Company and its Subsidiaries in
violation of, or in a manner or to a location which could give rise to
liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of
such properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Laws;
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the Company,
threatened, under any Environmental Law to which the Company or any
Subsidiary thereof is or will be named as a party with respect to such
properties or operations conducted in connection therewith, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to such properties or such operations; and
(vi) There has been no release, or to the best of the
Company's knowledge, the threat of release, of Hazardous Materials at
or from such properties, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
(i) ERISA.
(i) As of the Closing Date, neither the Company nor
any ERISA Affiliate maintains or contributes to, or has any obligation
under, any Employee Benefit Plans other than those identified on
SCHEDULE 7.1(I);
(ii)The Company and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to
all Employee Benefit Plans except for any required amendments for which
the remedial amendment period as defined in Section 401(b) of the Code
has not yet expired and except where a failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code except for such plans that
have not yet received determination letters but for which the remedial
amendment period for submitting a determination letter has not yet
expired. No liability has been incurred by the Company or any ERISA
Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan except
for a liability that could not reasonably be expected to have a
Material Adverse Effect;
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(iii) As of the Closing Date, no Pension Plan has been
terminated, nor has any accumulated funding deficiency (as defined in
Section 412 of the Code) been incurred (without regard to any waiver
granted under Section 412 of the Code), nor has any funding waiver from
the Internal Revenue Service been received or requested with respect to
any Pension Plan, nor has the Company or any ERISA Affiliate failed to
make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under Section
412 of the Code or Section 302 of ERISA, nor has there been any event
requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of
ERISA with respect to any Pension Plan;
(iv) Except where the failure of any of the following
representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, neither the
Company nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of the ERISA or Section
4975 of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make
a required installment or other required payment under Section 412 of
the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) Except where the failure of any of the following
representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, no
proceeding, claim (other than a benefits claim in the ordinary course
of business), lawsuit and/or investigation is existing or, to the best
knowledge of the Company after due inquiry, threatened concerning or
involving any (A) employee welfare benefit plan (as defined in Section
3(1) of ERISA) currently maintained or contributed to by the Company or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) MARGIN STOCK. Neither the Company nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulation U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Loans or Letters
of Credit will be used for purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors.
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(k) GOVERNMENT REGULATION. Neither the Company nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Company nor any Subsidiary thereof is, or
after giving effect to any Extension of Credit will be, subject to regulation
under the Public Utility Holding Company Act of 1935 or the Interstate Commerce
Act, each as amended, or any other Applicable Law which limits its ability to
incur or consummate the transactions contemplated hereby.
(l) MATERIAL CONTRACTS. SCHEDULE 7.1(L) sets forth a complete and
accurate list of all Material Contracts of the Company and its Subsidiaries in
effect as of the Closing Date; other than as specifically set forth in SCHEDULE
7.1(L), each such Material Contract is, and after giving effect to the
consummation of the transactions contemplated by the Loan Documents will be, in
full force and effect on the Closing Date in accordance with the terms thereof.
The Company and its Subsidiaries have delivered to the Administrative Agent a
true and complete copy of each Material Contract required to be listed on
SCHEDULE 7.1(L) or any other Schedule hereto as of the Closing Date, or such
Material Contract is available to the Administrative Agent as part of the
Company's filings with the SEC.
(m) EMPLOYEE RELATIONS. Each of the Company and its Subsidiaries has a
stable work force in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on SCHEDULE 7.1(M). The
Company knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) BURDENSOME PROVISIONS. Neither the Company nor any Subsidiary
thereof is a party to any indenture, agreement, lease or other instrument, or
subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could be reasonably expected to have a Material Adverse Effect. The Company and
its Subsidiaries do not presently anticipate that future expenditures needed to
meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(o) FINANCIAL STATEMENTS. The Consolidated balance sheets of the
Company and its Subsidiaries as of June 30, 2002 and the related statements of
income for the three (3) and six (6) calendar months then ended and the related
statements of cash flows for the six (6) calendar months then ended, copies of
which have been furnished to the Administrative Agent and each Lender, are
complete and correct, in all material respects, and fairly present, in all
material respects, the assets, liabilities and financial position of the Company
and its Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP,
except for the absence of footnote disclosures. The Company and its Subsidiaries
have no Debt, obligation or other unusual forward or long-term commitment which
is not fairly reflected in the foregoing financial statements.
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(p) NO MATERIAL ADVERSE CHANGE. Since June 30, 2002, there has been no
material adverse change in the properties, business, operations, prospects, or
condition (financial or otherwise) of the Company and its Subsidiaries and no
event has occurred or condition arisen that could reasonably be expected to have
a Material Adverse Effect.
(q) SOLVENCY. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Company and each of its Subsidiaries
will be Solvent.
(r) TITLES TO PROPERTIES. Each of the Company and its Subsidiaries has
such title to the real property owned or leased by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
personal property and assets, including, but not limited to, those reflected on
the balance sheets of the Company and its Subsidiaries delivered pursuant to
Section 7.1(o), except those which have been disposed of by the Company or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
SCHEDULE 7.1(R) sets forth as of the Closing Date the address of each parcel of
real property owned or leased by the Company or any Subsidiary hereof, and with
respect to all leasehold interests, a summary of the relevant lease terms.
(s) LIENS. None of the properties and assets of the Company or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 11.3. No financing statement under the Uniform Commercial Code of any
state which names the Company or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Company nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 11.3 hereof.
(t) DEBT AND GUARANTY OBLIGATIONS. SCHEDULE 7.1(T) is a complete and
correct listing of all Debt, Guaranty Obligations of the Company and its
Subsidiaries as of the Closing Date in excess of $2,000,000 and obligations of
the Company and its Subsidiaries as of the Closing Date under any IRU with
payments in excess of $500,000 per annum. The Company and its Subsidiaries have
performed and are in material compliance with all of the terms of such Debt and
Guaranty Obligations and all instruments and agreements relating thereto, and,
to the Company's knowledge, no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Company or its Subsidiaries
exists with respect to any such Debt or Guaranty Obligation.
(u) LITIGATION. Except for matters existing on the Closing Date and set
forth on SCHEDULE 7.1(U), there are no actions, suits or proceedings pending
nor, to the knowledge of the Company, threatened against or in any other way
relating adversely to or affecting the Company or any Subsidiary thereof or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority that could, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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(v) ABSENCE OF DEFAULTS. On the Closing Date, no event has occurred or
is continuing (i) which constitutes a Default or an Event of Default, or (ii)
which constitutes, or which with the passage of time or giving of notice or both
would constitute, a default or event of default by the Company or any Subsidiary
thereof under any Material Contract or judgment, decree or order to which the
Company or its Subsidiaries is a party or by which the Company or its
Subsidiaries or any of their respective properties may be bound or which would
require the Company or its Subsidiaries to make any payment thereunder prior to
the scheduled maturity date therefor.
(w) COMMUNICATIONS REGULATORY MATTERS.
(i) Each Network Agreement has been duly executed and
delivered by the Company and its Subsidiaries party thereto, is in full
force and effect and neither the Company, any Subsidiary thereof nor,
to the best knowledge of the Company, any of the other parties thereto,
is in default of any of the provisions thereof in any material respect
except for any such default that could not reasonably be expected to
have a Material Adverse Effect.
(ii) SCHEDULE 7.1(W) hereto sets forth, as of the
date hereof, a true and complete list of the following information for
each Communications License issued to the Company or any its
Subsidiaries: (A) for all Communications Licenses, the name of the
licensee, the type of service and the expiration dates; and (B) for
each PUC Authorization only, the geographic area covered by such PUC
Authorization, the services that may be provided thereunder and the
expiration date, if any.
(iii) Neither the Company nor any Subsidiary is in
material violation of any Communications Law applicable thereto that
could reasonably be expected to have a Material Adverse Effect. The
Communications Licenses specified on SCHEDULE 7.1(W) hereto are valid
and in full force and effect without conditions except for such
conditions as are generally applicable to holders of such
Communications Licenses and except as set forth on such Schedule. No
event has occurred and is continuing which could reasonably be expected
to (A) result in the imposition of a material forfeiture or the
revocation, termination or adverse modification of any such
Communications License or (B) materially and adversely affect any
rights of the Company or any of its Subsidiaries thereunder. The
Company has no reason to believe and has no knowledge that
Communications Licenses will not be approved or renewed, as applicable,
in the ordinary course.
(iv) All of the Network Facilities and other material
properties, equipment and systems owned, leased or managed by the
Company and its Subsidiaries are, and (to the best knowledge of the
Company) all such property, equipment and systems to be acquired or
added in connection with any contemplated system expansion or
construction will be, in good repair, working order and condition
(reasonable wear and tear excepted) and are and will be in material
compliance with all terms and conditions of the Communications Licenses
and all material standards or rules imposed by applicable
Communications Law and any Governmental Authority or as imposed under
any agreements with telephone companies and customers.
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(v) The Company and each of its Subsidiaries have
paid all material franchise, license or other fees and charges which
have become due pursuant to any Governmental Approval in respect of
their business and have made appropriate provision as is required by
GAAP for any such fees and charges which have accrued.
(x) ACCURACY AND COMPLETENESS OF INFORMATION. All written information,
reports and other papers and data produced by or on behalf of the Company or any
Subsidiary thereof and furnished to the Lenders were, at the time the same were
so furnished, complete and correct in all respects to the extent necessary to
give the recipient a true and accurate knowledge of the subject matter; provided
that all projection and financial forecasts shall represent the good faith
estimates of the Company and senior management thereof as to the projected
results contained therein based on the assumptions at the time when prepared. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Company or any Subsidiary thereof in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of the Company or its Subsidiaries or omits or will omit to
state a fact necessary in order to make the statements contained therein not
misleading in any material respect. The Company is not aware of any facts which
it has not disclosed in writing to the Administrative Agent having a Material
Adverse Effect, or insofar as the Company can now foresee, could reasonably be
expected to have a Material Adverse Effect.
(y) [RESERVED].
(z) RELATED TRANSACTION DOCUMENTS. The Company has delivered to the
Administrative Agent true, complete and correct copies of the Related
Transaction Documents, together with all amendments and modifications thereto.
The Related Transaction Documents (including the schedules and exhibits thereto)
comprise a full and complete copy of all agreements between the parties thereto
with respect to the subject matter thereof and all transactions related thereto,
and there are no agreements or understandings, oral or written, or side
agreements not contained therein that relate to or modify the substance thereof
which have not been previously disclosed in writing to the Administrative Agent.
Such Related Transaction Documents have been duly authorized by all necessary
corporate action on the part of the Company and each of its Subsidiaries party
thereto, and, when executed and delivered by the Company and each such
Subsidiary a party thereto, shall be enforceable in accordance with their
respective terms except as such enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance, moratorium or similar state or federal debtor
relief laws which affect the enforcement of creditors' rights in general and the
availability of equitable remedies. The representations and warranties made by
the Company and its Subsidiaries contained in the Related Transaction Documents
are true and correct and no default or event of default exists under the Related
Transaction Documents, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified herein.
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(aa) DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS. SCHEDULE 7.1(AA)
sets forth all of the Deposit Accounts and all "securities accounts" (as
defined in the UCC) of the Company and its Subsidiaries.
(bb) INACTIVE SUBSIDIARIES. Each inactive Subsidiary which was
acquired by the Company pursuant to the Acquisition Documents has been
dissolved.
(cc) The Company New Warrants have been duly authorized by all
necessary corporate action on the part of the Company and the Company has
obtained the irrevocable consent of a majority of the Company's shareholders,
and when executed and delivered by the Company, the Company New Warrants shall
be enforceable in accordance with their terms.
SECTION 7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 15.11 hereof, the Company will furnish or cause to be furnished to
the Administrative Agent and to the Lenders at their respective addresses as set
forth on SCHEDULE 1.1(A), or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 FINANCIAL STATEMENTS AND PROJECTIONS.
(a) MONTHLY FINANCIAL STATEMENTS. As soon as available but in any event
within thirty (30) days after the end of each monthly accounting period in each
fiscal year: (i) unaudited and Consolidated statements of income and cash flows
of the Company and its Subsidiaries for such monthly period and for the period
from the beginning of the fiscal year to the end of such monthly period
(including statements of income for each Permitted Market), (ii) unaudited
Consolidated balance sheets of the Company and its Subsidiaries as of the end of
such monthly period, setting forth in each case comparisons to the Company's
annual budget and the end of the corresponding period in the preceding fiscal
year (all such statements shall be prepared in accordance with GAAP,
consistently applied (subject to the absence of footnote disclosures and to
changes resulting from normal year-end adjustments for recurring accruals), and
shall be certified by a Responsible Officer), and (iii) a status report prepared
by a Responsible Officer, reporting the number of access lines then maintained
by the Company and its Subsidiaries and indicating whether the Company has met
its budgeted financial goals (including, without limitation, those specified in
any Approved Business Plan or Approved Budget) discussing in reasonable detail
the reasons for any variation from such goals, and describing what actions the
Company and its Subsidiaries have taken and propose to take in order to meet
budgeted financial targets in the future.
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(b) QUARTERLY FINANCIAL STATEMENTS. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter of each
Fiscal Year, the Company's Form 10-Q, which will include an unaudited
Consolidated balance sheet of the Company and its Subsidiaries as of the close
of such fiscal quarter and unaudited Consolidated statements of income and cash
flows for the fiscal quarter then ended and that portion of the Fiscal Year then
ended and Consolidated statements of cash flows for the portion of the Fiscal
Year then ended, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by the Company
in accordance with GAAP (except for the customary absence of footnotes) and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by a Responsible Officer to
present fairly in all material respects the financial condition of the Company
and its Subsidiaries as of their respective dates and the results of operations
of the Company and its Subsidiaries for the respective periods then ended,
subject to normal year end adjustments.
(c) ANNUAL FINANCIAL STATEMENTS. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, the Company's
Form 10-K, which will include an audited Consolidated balance sheet of the
Company and its Subsidiaries as of the close of such Fiscal Year and audited
Consolidated statements of income, retained earnings (or deficit) and cash flows
for the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures for the
preceding Fiscal Year prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP or other independent certified public accounting firm
reasonably acceptable to the Administrative Agent in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by the Company or any of its Subsidiaries or with respect to
accounting principles followed by the Company or any of its Subsidiaries not in
accordance with GAAP.
(d) BUDGETS AND BUSINESS PLANS. As soon as practicable and in any event
within five (5) Business Days after its approval, (i) each Approved Business
Plan and (ii) each Approved Budget, in each case accompanied by a certificate
from a Responsible Officer to the effect that, to the best of such officer's
knowledge, such projections are good faith estimates of the financial condition
and operations of the Company and its Subsidiaries for such period; PROVIDED,
that in the event that there is no Approved Budget for any given Fiscal Year, an
annual budget shall be provided no later than February 1 of such Fiscal Year
prepared on a monthly basis and displaying anticipated statements of income and
cash flows and balance sheets and budgeted Capital Expenditures in form and
substance satisfactory to the Required Lenders.
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(e) CASH FLOW PROJECTIONS. As soon as practicable and in any event
within five (5) Business Days after the end of each calendar month, (i) a
13-week cash flow projection for the Company and its Subsidiaries, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding four weeks, and otherwise in form and substance satisfactory
to the Administrative Agent and (ii) copies of any account statements provided
to the Company or any of its Subsidiaries with respect to the Company's or any
of its Subsidiaries' investments in Cash Equivalents permitted under Section
11.4(b), and such other information related thereto that the Administrative
Agent may reasonably request.
(f) OTHER FINANCIAL REPORTS. (i) Within five (5) Business Days after
the preparation of each such report which has been presented to the Board of
Directors of the Company, the Company's monthly highlight report and the
Company's monthly market level highlights report and (ii) on each day financial
statements are delivered pursuant to Section 8.1(a), an accounts receivable and
payable ageing, in each case, in form and detail reasonably satisfactory to the
Administrative Agent.
SECTION 8.2 OFFICER'S COMPLIANCE CERTIFICATE. At each time financial
statements are delivered pursuant to Sections 8.1(a), 8.1(b) and 8.1(c) and at
such other times as the Administrative Agent shall reasonably request, a
certificate of a Responsible Officer or the treasurer of the Company including
for the quarterly certificate (i) calculations used to determine compliance or
non-compliance with Article X hereof (including a statement of such compliance
or non-compliance, as the case may be), (ii) an updated Schedule 7.1(b) as in
effect as of such fiscal quarter end if and to the extent any change has
occurred with respect to the information on such Schedule since the previous
fiscal quarter end and (iii) copies of any amendment to any Material Contract
(not previously delivered pursuant to Section 8.5(e)) which amendment was
completed during such quarter, and which certificate shall be in the form of
EXHIBIT F attached hereto (an "OFFICER'S COMPLIANCE CERTIFICATE") and in detail
reasonably satisfactory to the Administrative Agent.
SECTION 8.3 ACCOUNTANTS' CERTIFICATE. At each time financial statements
are delivered pursuant to Section 8.1(c), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Event of Default pursuant to Article X hereof or, if such is not the case,
specifying such Default or Event of Default and its nature and period of
existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Company and its Subsidiaries are in compliance with
the financial covenants set forth in Article X hereof as at the end of each
respective period.
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SECTION 8.4 OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Company, any Borrower or their respective board of directors by
its independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto;
(b) Within ten (10) Business Days after the receipt by the Company or
any of its Subsidiaries of notice that any Communications License has been lost
or canceled, copies of any such notice accompanied by a report describing the
measures undertaken by the Company or any of its Subsidiaries to prevent such
loss or cancellation (and the anticipated impact, if any, that such loss or
cancellation will have upon the business of the Company and its Subsidiaries);
(c) Promptly but in any event within ten (10) Business Days after the
filing (or, with respect to subclause (iv) below, the receipt) thereof, a copy
of (i) each report or other filing made by the Company or any of its
Subsidiaries with the SEC and required by the SEC to be delivered to the
shareholders of the Company or any of its Subsidiaries, (ii) each report made by
the Company or any of its Subsidiaries to the SEC on Form 8-K, (iii) each final
registration statement of the Company or any of its Subsidiaries filed with the
SEC and (iv) any notice of any SEC investigation of the Company or any of its
Subsidiaries;
(d) At such time as the monthly financial statements and accompanying
Officers' Compliance Certificate are delivered pursuant to Sections 8.1(a) and
8.2, a certificate of a Responsible Officer in reasonable detail satisfactory to
the Administrative Agent setting forth the number of business lines relating to
each Interconnection Lease and certifying compliance with the 5% limitation
contained in the definition of Interconnection Lease;
(e) Promptly but in any event within ten (10) Business Days after (i)
the approval of the minutes with respect to any meeting of the board of
directors of the Company or any of the Borrowers, a copy of the minutes of such
board meeting to the board observer referred to in Section 9.22 hereof on behalf
of the Lenders (it being understood and agreed that such board observer shall
not further distribute copies of such minutes to any Lender but may generally
describe the contents thereof orally to the Lenders), (ii) the delivery of any
report provided to the board of directors of the Company or any of the Borrowers
by the management of the Company or any of the Borrowers with respect to the
operating performance of or operational matters affecting the Company, a copy of
such report and (iii) the receipt of a management letter from the auditors for
the Company or the Borrowers, a copy of such letter; and
(f) Such other information regarding the operations, business affairs
and financial condition of the Company, any Borrower or any of its Subsidiaries
as the Administrative Agent or any Lender may reasonably request.
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SECTION 8.5 NOTICE OF LITIGATION AND OTHER MATTERS. Prompt (but in no
event later than five (5) days after an officer of the Company or any Borrower
obtains knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Company, any Borrower or any
Subsidiary thereof or any of their respective properties, assets or businesses
unless the action or proceeding could not reasonably be expected to result in a
liability of the Company or any Borrower in an amount greater than $1,000,000;
(b) any notice of any violation received by the Company, any Borrower
or any Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to
result in, a strike or other work action against the Company, any Borrower or
any Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding
$1,000,000 that may be assessed against or threatened against the Company, any
Borrower or any Subsidiary thereof;
(e) (i) the execution of any Material Contract by the Company, any
Borrower or any Subsidiary, along with a copy thereof, and a copy of any
amendments to any Material Contract relating to Telecommunications Equipment
(but only to the extent such amendment relates to the length, overall pricing,
other payment terms and commitments under any such contract), (ii) any default
or event of default, or any event which constitutes or which with the passage of
time or giving of notice or both would constitute a material default or material
event of default, or in any case a default in payment of any amounts due (after
expiration of applicable grace and cure periods), under any Material Contract or
Related Transaction Documents to which the Company, any Borrower or any of its
Subsidiaries is a party or by which the Company, any Borrower or any Subsidiary
thereof or any of their respective properties may be bound and (iii) any Default
or Event of Default hereunder;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Company, any Borrower or any ERISA Affiliate of the PBGC's intent to terminate
any Pension Plan or to have a trustee appointed to administer any Pension Plan,
(iii) all notices received by the Company, any Borrower or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Company, any
Borrower obtaining knowledge or reason to know that the Company, any Borrower or
any ERISA Affiliate has filed or intends to file a notice of intent to terminate
any Pension Plan under a distress termination within the meaning of Section
4041(c) of ERISA;
69
(g) the enactment or promulgation after the date hereof of any federal,
state, provincial or local statute, regulation or ordinance or judicial or
administrative decision or order (or, to the extent that the Company or any
Borrower has knowledge thereof, any such proposed statute, regulation,
ordinance, decision or order, whether by the introduction of legislation or the
commencement of rulemaking or similar proceedings or otherwise) having a
material effect or relating to the operation of the Network Facilities by the
Company or any of its Subsidiaries (including, without limitation, any statutes,
decisions or orders affecting long distance telecommunication resellers
generally and not directed against the Company or any of its Subsidiaries
specifically) which have been issued or adopted (or which have been proposed)
and which could reasonably be expected to have a Material Adverse Effect;
(h) any event which makes any of the representations set forth in
Section 7.1 inaccurate in any respect;
(i) the creation of any Subsidiary by the Company or any Borrower; and
(j) the opening of any Deposit Account by the Company or any of its
Subsidiaries or any "securities account" (as defined in the UCC).
SECTION 8.6 ACCURACY OF INFORMATION. All written information, reports,
statements and other papers and data furnished by or on behalf of the Company or
any Borrower to the Administrative Agent or any Lender whether pursuant to this
Article VIII or any other provision of this Agreement, or any of the Security
Documents, shall, at the time the same is so furnished comply with Section
7.1(x).
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 15.11, the Company will, and will cause each of its
Subsidiaries to:
SECTION 9.1 PRESERVATION OF CORPORATE EXISTENCE AND RELATED MATTERS.
Except as permitted by Section 11.5, (a) preserve and maintain its separate
corporate existence (or with respect to any applicable Subsidiary its limited
liability company existence) and (b) except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, preserve and maintain
all rights, franchises, licenses and privileges necessary to the conduct of its
business and qualify and remain qualified as a foreign corporation and
authorized to do business in each jurisdiction where the nature and scope of its
activities require it to so qualify under Applicable Law.
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SECTION 9.2 MAINTENANCE OF PROPERTY. In addition to the requirements of
any of the Security Documents, protect and preserve all properties useful in and
material to its business, including copyrights, patents, trade names and
trademarks; maintain in good working order and condition all buildings,
equipment and other tangible real and personal property; and from time to time
make or cause to be made all renewals, replacements and additions to such
property necessary for the conduct of its business, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times, in each case except where the failure to comply with any of the foregoing
in all respects could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 9.3 INSURANCE. Maintain with insurance companies that have an
A.M. Best rating of A:X or better, insurance against such risks and in such
minimum amounts as are set forth on SCHEDULE 9.3 and any additional insurance
customarily maintained by similar businesses and as may be required by
Applicable Law and the Security Documents, and on the Closing Date and from time
to time thereafter deliver to the Administrative Agent upon its request (a) a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby and (b)
annually, a report from an independent insurance broker as to the insurance then
in effect.
SECTION 9.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; PROVIDED that the Company or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 9.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.
SECTION 9.6 COMPLIANCE WITH LAWS AND APPROVALS. Observe and remain in
compliance with all material Applicable Laws and maintain in full force and
effect all material Governmental Approvals, in each case material to the conduct
of its business.
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SECTION 9.7 ENVIRONMENTAL LAWS. In addition to and without limiting the
generality of Section 9.6, (a) comply with, and use reasonable efforts to ensure
such compliance by all tenants and subtenants with all material applicable
Environmental Laws and obtain and comply with and maintain, and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws applicable to
the operations of the Company or such Subsidiary, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor.
SECTION 9.8 COMPLIANCE WITH ERISA. In addition to and without limiting
the generality of Section 9.6, (a) except where the failure to so comply could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) comply with all material applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (ii) not take any action or fail to take action the
result of which could be a liability to the PBGC or to a Multiemployer Plan,
(iii) not participate in any prohibited transaction that could result in any
civil penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the Administrative Agent's request such additional information about any
Employee Benefit Plan as may be reasonably requested by the Administrative
Agent.
SECTION 9.9 COMPLIANCE WITH AGREEMENTS. Comply in all material respects
with each term, condition and provision of any Material Contract and, except
where the failure to so comply could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, with each term, condition and
provision of all other contracts and agreements entered into in the conduct of
its business; PROVIDED that the Company or such Subsidiary may contest any
Material Contract or other contract or agreement in good faith through
applicable proceedings so long as adequate reserves are maintained in accordance
with GAAP.
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SECTION 9.10 CONDUCT OF BUSINESS. Engage only in the provision of voice
and data wireline telecommunications services and in lines of business directly
related thereto; PROVIDED that such service and related business shall be
conducted solely by the Borrowers, and the Company shall act as a holding
company for the capital stock of the Borrowers and engage only in business
operations incidental thereto and incidental to the creation and capitalization
of the Borrowers and to making other investments therein.
SECTION 9.11 VISITS AND INSPECTIONS. Permit the Administrative Agent,
or any Lender (or any consultant retained thereby), from time to time upon at
least two (2) Business Days prior notice and at the Borrowers' expense, to visit
and inspect its properties; conduct periodic field audits and otherwise inspect,
audit and make extracts from its books, records and files, including, but not
limited to, management letters prepared by independent accountants; during each
fiscal year of the Company conduct quarterly field audits (or, if a Default or
an Event of Default shall have occurred and for so long as it shall be
continuing), conduct field audits at any time (PROVIDED, that, unless a Default
or Event of Default has occurred and is continuing, if a Lender or Lenders
request that more than one quarterly field audit be conducted during any Fiscal
Year, such additional field audit(s) shall be at the expense of the Lender or
Lenders requesting it); and discuss with its principal officers, and its
independent accountants, its business, assets, liabilities, financial condition,
results of operations and business prospects.
SECTION 9.12 ADDITIONAL SUBSIDIARIES AND COLLATERAL; POST-CLOSING DATE
REAL ESTATE MATTERS.
(a) (i) Within thirty (30) days of (x) the creation of any newly-formed
Subsidiary permitted in accordance with Section 11.16 hereof and (y) the
acquisition of any Subsidiary permitted by Section 11.4(c) (or such other date
as may be specified in any consent executed pursuant to Section 11.4(c)), cause
to be executed and delivered to the Administrative Agent (A) a Joinder Agreement
such that such Subsidiary shall become a Borrower hereunder, a grantor under the
Security Agreement and an issuer under the Pledge Agreement (and, if applicable,
the parent of such Subsidiary shall become a pledgor under the Pledge
Agreement), (B) subject to clause (ii) below, such other applicable Security
Documents in form and substance reasonably satisfactory to the Administrative
Agent such that the assets of such Subsidiary shall become Collateral for the
Obligations, (C) favorable legal opinions addressed to the Administrative Agent
and Lenders in form and substance satisfactory thereto with respect to such
supplements and agreements and (D) such other documents and closing certificates
as consistent with Article VI as may be requested by the Administrative Agent
and (ii) within sixty (60) days after the joinder of such Subsidiary, a Mortgage
for each parcel of real property owned or leased thereby at the time of such
joinder.
73
(b) Within sixty (60) days of the consummation by the Company or any
Subsidiary in accordance with Section 11.17 hereof of any lease (including,
without limitation, in connection with any assignment or assumption of an
existing lease to or by a new landlord) with respect to real property at which
any Switch or any material Telecommunications Equipment is or is to be located,
owned or leased by the Company or any Subsidiary cause to be executed and
delivered to the Administrative Agent in form and substance satisfactory to the
Administrative Agent (i) (A) a copy of the lease and all related documents, (B)
a legal description of the premises, (C) if such lease is mortgagable, a
Mortgage with respect to such lease, (D) a landlord consent and (ii) to the
extent requested by the Administrative Agent, (A) a mortgagee estoppel letter,
(B) UCC-1 Financing Statements and any additional filings or recordings or
actions necessary to perfect the security interests of the Lenders in all
Collateral related to such premises, (C) favorable opinions of counsel to the
Company addressed to the Administrative Agent and the Lenders with respect to
such Mortgages and security interests, (D) satisfactory title searches, recorded
memoranda of lease and flood hazard certifications and (E) each additional
document, instrument or other item of information reasonably requested by the
Administrative Agent.
(c) In connection with the execution, extension, amendment,
modification, renegotiation, replacement or renewal by the Company or any
Subsidiary of any Interconnection Agreement after the Closing Date that, in the
reasonable judgment of the Company, may require payments by the Company and its
Subsidiaries or involves amounts in excess of $2,000,000, in the aggregate
(which execution, extension, amendment, modification, renegotiation, replacement
or renewal shall have been previously approved in writing by the Administrative
Agent if the result of such execution, extension, amendment, modification,
renegotiation, replacement or renewal in the reasonable judgment of the Company
may have an adverse impact on the Company and its Subsidiaries in excess of
$2,000,000 in the aggregate), use their reasonable best efforts to cause to be
executed and delivered to the Administrative Agent at the time such
Interconnection Agreement, extension, amendment, modification, renegotiation,
replacement or renewal is entered into (or as soon as reasonably practicable
thereafter), a consent agreement regarding the Lien of the Administrative Agent
in form and substance reasonably satisfactory thereto and each additional
document, instrument or other item of information reasonably requested by the
Administrative Agent.
(d) In connection with the execution by the Company or any Subsidiary
(with the prior written consent of the Administrative Agent) of any IRU
requiring annual payments in excess of $500,000, cause to be delivered to the
Administrative Agent at the time such IRU is entered into (i) a certified copy
of such IRU, (ii) a revised SCHEDULE 7.1(T), reflecting such IRU and (iii) each
additional document, instrument or other item of information related thereto
reasonably requested by the Administrative Agent.
(e) Simultaneously with the opening of any Deposit Account or any
"securities account" (as defined in the UCC) by the Company or any of its
Subsidiaries, cause to be executed and delivered to the Administrative Agent in
form and substance reasonably satisfactory thereto a control agreement or
similar agreement permitting the Administrative Agent to obtain "control" (as
such term is now or hereafter defined in the UCC) over such Deposit Account or
such "securities account" (as defined in the UCC).
74
(f) Within 60 days after the Closing Date, the Company shall have
caused to be furnished to the Administrative Agent, at the Company's expense,
with respect to each Mortgage in existence on the Closing Date, (A) duly
executed counterparts of modifications to such Mortgage in form and substance
satisfactory to the Administrative Agent (the originals of which shall have been
forwarded on the Closing Date for recordation in the appropriate jurisdiction)
and (B) satisfactory flood certifications and title searches showing recorded
memoranda of lease for all leases purported to be covered in the Mortgages (and,
as to any memoranda of lease not so shown, the Company agrees to cause to be
duly recorded appropriate memoranda of lease as promptly as practicable
thereafter (but in any event within 60 days thereafter)).
(g) Promptly deliver from time to time such additional Security
Documents to the Administrative Agent upon the request of the Required Lenders
with respect to any assets of any such Person not subject to an existing Lien in
favor of the Administrative Agent for the ratable benefit of itself and the
Lenders.
SECTION 9.13 [RESERVED].
SECTION 9.14 TRANSFER OF CAPITAL CONTRIBUTIONS. With respect to any Net
Cash Proceeds received by the Company or any of the Borrowers by way of any
equity issuance permitted hereunder or from a Public Offering, transfer the
amount thereof to the Administrative Agent for application in accordance with
Section 4.5(c)(vi).
SECTION 9.15 HEDGING AGREEMENTS. The Borrowers and the Company shall
not enter into any Hedging Agreements other than the Hedging Agreements in place
as of the Closing Date without the prior written consent of the Required
Lenders.
SECTION 9.16 FURTHER ASSURANCES. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
SECTION 9.17 USE OF PROCEEDS. The Borrowers shall use the proceeds of
the Extensions of Credit for working capital and general corporate requirements
of the Borrowers.
SECTION 9.18 COMPANY COVENANTS RELATING TO PREFERRED EQUITY. The
Company shall give the Administrative Agent prior written notice of any proposed
"change in control" (as such term is defined in the Preferred Equity Documents)
within a reasonable time period in advance of such "change in control." In
addition, the Company shall immediately notify the Administrative Agent and the
Lenders upon the receipt of any notice (written or otherwise) from any holder of
Preferred Equity that such holder intends to exercise its right to put its
shares of Preferred Equity to the Company in accordance with the terms of the
Preferred Equity Documents. The Company agrees, however, that so long as any
Obligations are outstanding, the Company shall not redeem, pay cash dividends on
or otherwise make any cash distributions to or for the account of any holder of
Preferred Equity in respect of such Person's holdings of Preferred Equity.
75
SECTION 9.19 [RESERVED].
SECTION 9.20 [RESERVED].
SECTION 9.21 LIMITED SUBSIDIARY PUC AUTHORIZATION. Use its reasonable
best efforts to cause each Limited Subsidiary to be authorized by each
applicable PUC to incur the Debt under the Loan Documents and perform the
corresponding obligations thereunder until no such obligations remain under the
Loan Documents as soon as practicable after the Closing Date, but in any event,
no later than December 30, 2002.
SECTION 9.22 BOARD OBSERVER. Subject to the fiduciary duties of the
Company's Board of Directors, permit the Administrative Agent on behalf of the
Lenders (other than MSDWCP) to appoint an observer representative reasonably
acceptable to such Board of Directors to attend all respective meetings of the
Company's and each Borrower's Board of Directors and any of its committees and
provide timely and reasonable prior written notice to such representative of all
such meetings, PROVIDED that such observer shall have no right to vote on any
matter presented to such Board of Directors or such committees thereof.
Notwithstanding the foregoing, it is understood and agreed that (a) the chairman
of any meeting of the Board of Directors (or any committee thereof) may exclude
the observer from such meeting (or any portion thereof) the purpose of which, in
the reasonable judgment of the chairman, is to discuss matters of a strategic or
confidential nature (including matters related to acquisitions and dispositions
or relating to personnel) or matters in which the interests of the Company and
its shareholders may be adverse to those of the Lenders (including matters
relating to the Credit Agreement or the Company's financing strategy or
alternatives) and (b) the observer shall not be entitled to receive written
material or analysis with respect to any such discussion from which it is
reasonably expected that such observer would be excluded or which would be
reasonably expected to result in a loss of an attorney-client, work-product or
other legal privilege between the Company or the board and their respective
counsel.
SECTION 9.23 SEC APPROVALS. In connection with the issuance and
delivery of the Company New Warrants in accordance with Section 6.2(g)(iii)
hereof, as soon as reasonably practicable after the date hereof, but in no event
later than thirty (30) days after the Closing Date, the Company shall cause a
preliminary information statement relating to the shareholder approval of the
Company New Warrants and the transactions contemplated thereby, including
without limitation the issuance of the Company's common stock upon the exercise
of the Company New Warrants, to be filed with the SEC. Thereafter, the Company
shall use its reasonable best efforts to cause the irrevocable written consent
of certain of its stockholders with respect to the Company New Warrants to
become effective in accordance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder. In connection
therewith, the Company will promptly prepare and file with the SEC, use its
reasonable best efforts to have cleared by the SEC and thereafter mail to its
shareholders as promptly as practicable a definitive information statement.
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ARTICLE X
FINANCIAL COVENANTS
SECTION 10.1. Until all of the Obligations have been paid and satisfied
in full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 15.11 hereof, the Company on a Consolidated basis
will not:
(a) MINIMUM AVAILABLE CASH: At any time prior to
July 1, 2004, permit Available Cash of the Company and its Subsidiaries to
be less than $10,000,000.
(b) LEVERAGE RATIO: At any time during the applicable period
set forth below, permit the Company Leverage Ratio to exceed the corresponding
ratio set forth below:
-------------------------------------------------------------------------------
Period Ratio
-------------------------------------------------------------------------------
09/30/2004 through 03/30/2005 10.00 to 1.00
03/31/2005 through 03/30/2006 6.00 to 1.00
03/31/2006 through 03/30/2007 5.00 to 1.00
03/31/2007 and thereafter 4.00 to 1.00
------------------------------------------------------------------------------
(c) FIXED CHARGES COVERAGE RATIO: As of any fiscal quarter
end during the applicable period set forth below, permit the Company Fixed
Charges Ratio to be less than the corresponding ratio set forth below:
------------------------------------------------------------------------------
Period Ratio
------------------------------------------------------------------------------
09/30/2004 through 12/31/2004 0.65 to 1.00
01/01/2005 through 09/30/2006 1.00 to 1.00
10/01/2006 through 09/30/2008 0.80 to 1.00
10/01/2008 through 12/31/2008 0.50 to 1.00
01/01/2009 and thereafter 0.50 to 1.00
------------------------------------------------------------------------------
77
(d) INTEREST COVERAGE RATIO: As of any fiscal quarter end
during the applicable period set forth below, permit the Company Interest
Coverage Ratio to be less than the corresponding ratio set forth below:
----------------------------------------------------------------------------
Period Ratio
----------------------------------------------------------------------------
09/30/2004 through 12/31/2004 1.30 to 1.00
01/01/2005 through 12/31/2007 1.50 to 1.00
01/01/2008 through 12/31/2008 3.00 to 1.00
01/01/2009 and thereafter 3.00 to 1.00
----------------------------------------------------------------------------
(e) MAXIMUM CAPITAL EXPENDITURES: For each Fiscal Year, permit
the sum of (i) Capital Expenditures and (ii) payments made in respect of any
IRU, in the aggregate, for such Fiscal Year to exceed the corresponding
amount set forth below:
---------------------------------------------------------------------------
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
---------------------------------------------------------------------------
12/31/02 $ 35,000
12/31/03 $ 39,000
12/31/04 $ 43,000
12/31/05 $ 52,000
12/31/06 $ 59,000
12/31/07 $ 66,000
12/31/08 $ 74,000
---------------------------------------------------------------------------
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 15.11 hereof, the Company shall not and shall not permit any
of its Subsidiaries to:
78
SECTION 11.1 LIMITATIONS ON DEBT. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt of the Company or any Borrower incurred in connection with a
Hedging Agreement (i) required by Section 9.15 of the Second Amended and
Restated Credit Agreement or (ii) otherwise executed to hedge against interest
rate fluctuation with a counterparty and upon terms and conditions (including
interest rate) reasonably satisfactory to the Required Lenders;
(c) Debt arising under or in connection with publicly or privately
placed notes, debentures, bonds or debt securities, loans or related indentures
or other agreements (including without limitation Debt convertible into capital
stock of the Company) with aggregate Net Cash Proceeds exceeding the amount of
the aggregate Extensions of Credit outstanding on the date such Debt is issued,
so long as (i) no Default or Event of Default exists on the date any such Debt
is created or arises as a result of any borrowing thereunder, (ii) the
provisions of the documents evidencing such Debt are not more restrictive (as
reasonably determined by the Administrative Agent) than the covenants in the
Loan Documents, including without limitation any "change in control" provision,
(iii) such Debt provides for no scheduled payment of principal on or prior to
the date that is six (6) months after the Term C Loan Maturity Date, (iv) such
Debt provides for no scheduled cash payment of interest on or prior to the
payment in full of all principal and interest outstanding under the Term C Loan
Facility (except for such interest payments made pursuant to an escrow
arrangement or by original discount), (v) such Debt is either (A) unsecured Debt
issued by the Borrowers subordinated to the Obligations and the terms of such
subordination are reasonably satisfactory to the Administrative Agent and the
Required Lenders or (B) unsecured Debt issued by the Company and (vi) the
documents and other terms pursuant to which such Debt is issued are reasonably
satisfactory to the Administrative Agent and the Required Lenders, so long as
the proceeds thereof are applied to the Extensions of Credit in accordance with
Section 4.5 hereof;
(d) Debt existing on the Closing Date and not otherwise permitted under
or referred to in this Section 11.1, as set forth on SCHEDULE 7.1(T), and the
renewal and refinancing (but not the increase of the aggregate principal amount)
thereof;
(e) Debt of the Borrowers not to exceed $20,000,000 in the aggregate
on any date of determination which consists of Capital Leases and/or other
purchase money Debt;
(f) Debt consisting of Guaranty Obligations permitted by Section 11.2;
(g) Debt of the Company in respect of the Bridge Loans;
(h) Debt of any Borrower to another Borrower; and
79
(i) Without duplication as to clause (c) above, Debt arising under or
in connection with an Authorized Capital Markets Transaction, so long as the
proceeds thereof are applied to the Extensions or Credit in accordance with
Section 4.5 hereof;
PROVIDED that none of the Debt permitted to be incurred by this Section 11.1
shall restrict, limit or otherwise encumber (by covenant or otherwise) the
ability of any Subsidiary of the Company to make any payment to the Company or
any Subsidiary thereof (in the form of dividends, intercompany advances or
otherwise) for the purpose of enabling the Borrowers to pay the Obligations and
the Company to pay the Guaranteed Obligations.
SECTION 11.2 LIMITATIONS ON GUARANTY OBLIGATIONS. Create, incur, assume
or suffer to exist any Guaranty Obligations except:
(a) Guaranty Obligations in favor of the Administrative Agent
for the benefit of the Administrative Agent and the Lenders;
(b) Guaranty Obligations of the Borrowers with respect to any
subordinated Debt issued by the Company pursuant to Section 11.1(c) as long as
such Guaranty Obligations (i) are unsecured and constitute Subordinated Debt and
(ii) the documents and other terms pursuant to which such Guaranty Obligations
are entered into are reasonably satisfactory to the Administrative Agent and the
Required Lenders;
(c) Guaranty Obligations in an amount not to exceed $1,000,000 to
secure payment or performance of customer service contracts incurred in the
ordinary course of business;
(d) Guaranty Obligations of the Company with respect to any real or
personal property lease to which any Borrower is a party and entered into in the
ordinary course of business; PROVIDED that no Default or Event of Default exists
on the date any such Guaranty Obligation is created, incurred or assumed or
arises as a result thereof; and PROVIDED FURTHER that upon entering into any
such Guaranty Obligation with respect to any lease subject to Section 9.12, the
Borrowers shall be in compliance with Section 9.12 with respect to such lease;
(e) Guaranty Obligations of the Company or any Borrower of
any Debt of the Borrowers which is permitted by Section 11.1(e);
(f) Guaranty Obligations of the Company and its Subsidiaries which
consist of customary indemnification and purchase price adjustment obligations
incurred in connection with the purchase of assets or capital stock in each case
permitted hereunder; and
(g) Guaranty Obligations of the Borrowers under the Subordinated
Upstream Guaranty.
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SECTION 11.3 LIMITATIONS ON LIENS. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests held by
the Company or any Subsidiary thereof), real or personal, whether now owned or
hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations (not to exceed $500,000 in the aggregate) under customer service
contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, materially detract from the value of such property or impair the
use thereof in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens created under the Lucent Agreement and any other Liens not
otherwise permitted by or referred to in this Section 11.3 and in existence on
the Closing Date, in each case as described on SCHEDULE 11.3;
(g) Liens evidencing the interest of lessors under Capital Leases
permitted by Section 11.1(e) and Liens securing any purchase money Debt (or
refinancings thereof) permitted under Section 11.1(e); PROVIDED that with
respect to any such purchase money Liens, (i) such Liens shall be created
substantially simultaneously with the acquisition of the related asset, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Debt (or by the Debt so refinanced), (iii) the amount of Debt
secured thereby is not increased and (iv) the principal amount of Debt secured
by any such Lien shall at no time exceed one hundred percent (100%) of the
original purchase price of such property at the time it was acquired; and
(h) Liens created under the Bridge Loan Security Agreement,
as subordinated pursuant to the Intercreditor Agreement.
81
SECTION 11.4 LIMITATIONS ON LOANS, ADVANCES, INVESTMENTS AND
ACQUISITIONS. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a
substantial portion of the business or assets of any other Person or any other
investment or interest whatsoever in any other Person, or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to,
or any investment in cash or by delivery of property in, any Person except:
(a) existing loans, advances and investments not otherwise
permitted by this Section 11.4 described on SCHEDULE 11.4(A);
(b) investments by the Company or any of its Subsidiaries in (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States or any agency thereof maturing within 120 days from the date of
acquisition thereof, (ii) commercial paper maturing no more than 120 days from
the date of creation thereof and currently having the highest rating obtainable
from either Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of
deposit maturing no more than 120 days from the date of creation thereof issued
by commercial banks incorporated under the laws of the United States, each
having combined capital, surplus and undivided profits of not less than
$500,000,000 and having a rating of "A" or better by a nationally recognized
rating agency; PROVIDED that the aggregate amount invested in such certificates
of deposit shall not at any time exceed $5,000,000 for any one such certificate
of deposit and $10,000,000 for any one such bank, or (iv) time deposits maturing
no more than 30 days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder (any such investment
referred to in this Section 11.4(b), a "CASH EQUIVALENT");
(c) investments by the Company in the form of acquisitions of all or
substantially all of the business or a line of business (by way of acquisition
of capital stock or other equity interests only) of any other Person, and
investments by the Borrowers or any Subsidiary thereof in the form of
acquisitions of all or substantially all of the business or a line of business
(whether by the acquisition of capital stock, assets or any combination thereof)
of any other Person, in each case only so long as (i) (A) no Default shall have
occurred and be continuing (or would occur after giving effect thereto), (B) the
consideration paid for such acquisitions consists solely of common stock of the
Company, (C) the aggregate consideration paid for all such acquisitions does not
exceed $5,000,000, (D) the acquisitions must involve assets, businesses or lines
of business in the same markets in which the Borrowers currently principally
operate, (E) each acquired company must, on both a trailing 12-month basis and a
reasonably projected next 12-month basis, have positive EBITDA and free cash
flow and the Administrative Agent shall have received financial statements and
projections in form and detail reasonably satisfactory to it reasonably prior to
the consummation of any acquisition confirming the same and (F) no such
acquisition could reasonably be expected to have any Material Adverse Effect or
(ii) such acquisition has been previously approved in writing by the Required
Lenders;
82
(d) any investment by the Company in any Borrower or by any
Borrower in another Borrower or any loan permitted by Section 11.1(h); and
(e) loans and advances to directors, officers and employees of the
Company and its Subsidiaries existing on the Closing Date in an aggregate
principal amount not exceeding $2,400,000 as described on SCHEDULE 11.4(E) and
advances to employees in the ordinary course of business for travel and other
business expenses not exceeding $500,000 in the aggregate at any time.
SECTION 11.5 LIMITATIONS ON MERGERS AND LIQUIDATION. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Wholly-Owned Subsidiary of the Company may merge with any
other Wholly-Owned Subsidiary of the Company;
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an
acquisition permitted by Section 11.4(c); and
(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into
such Borrower or any other Wholly-Owned Subsidiary of such Borrower.
SECTION 11.6 LIMITATIONS ON SALE OF ASSETS. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale or lease by any Borrower in the ordinary course of
business of any portion of the Network Facility not then in use by such
Borrower and not contemplated to be used thereby;
(b) the sale by any Borrower of assets no longer used or usable in the
business of the Borrowers or any of their Subsidiaries;
(c) the transfer of assets to any Borrower or any Wholly-Owned
Subsidiary of any Borrower pursuant to Section 11.5(c);
(d) the sale or discount without recourse by any Borrower of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof; and
83
(e) any asset sale not referenced above under Section 11.6 as long as
no Default has occurred and is continuing, such sale is in the ordinary course
of business and the Net Cash Proceeds thereof are, if applicable, applied in
accordance with Section 4.5 and/or Section 2.6, as applicable; PROVIDED that the
aggregate Net Cash Proceeds from such sales shall not exceed $2,000,000 during
any period of four consecutive fiscal quarters.
SECTION 11.7 LIMITATIONS ON DIVIDENDS AND DISTRIBUTIONS. Declare or pay
any dividends upon any of its capital stock or other equity interests; purchase,
redeem, retire or otherwise acquire, directly or indirectly, any shares of its
capital stock or other equity interests; return capital of the Borrowers to the
Company; or make any distribution of cash, property or assets among the holders
of shares of its capital stock or make other payments or distributions to any
Affiliate of the Company or any of its Subsidiaries; PROVIDED that, if no
Default or Event of Default has occurred and is continuing nor would occur as a
result of the following action:
(a) the Company and its Subsidiaries may make payments to Affiliates of
fees or compensation for services which are in the nature of management,
corporate overhead or administrative services to the extent such payments are
expressly reflected in the then effective Approved Budget or Approved Business
Plan and do not exceed arms' length pricing; PROVIDED, that no such payments may
be made without the prior written consent of the Required Lenders if the
aggregate amount of all such payments exceeds $500,000 per annum;
(b) the Company and its Subsidiaries may pay dividends (including
paid-in-kind dividends) in shares of their capital stock;
(c) any Borrower may declare and pay dividends and make any other
distribution of cash property or assets to another Borrower and any Wholly-Owned
Subsidiary of any Borrower may pay dividends and make other distributions of
cash, property or assets to any Borrower or any Wholly-Owned Subsidiary of a
Borrower; and
(d) the Borrowers may pay cash dividends to the Company on each date on
which cash interest is due with respect to the Bridge Loans in an amount equal
to the interest payment due on such date and which is permitted to be paid under
this Agreement (and the Company may make corresponding cash interest payments in
respect of such Debt to the holders thereof to the extent allowed under this
Agreement); PROVIDED that (i) the Company and the Borrowers shall remain in
compliance with the covenants set forth in Articles X and XI hereof after giving
effect to such payment, and shall deliver evidence thereof reasonably
satisfactory to the Administrative Agent, (ii) immediately prior to the making
of such payment, no Default has occurred and is continuing and (iii) the Company
shall use the proceeds of such dividends solely for the payment of scheduled
cash interest payments due on the Bridge Loans; and PROVIDED FURTHER that (i)
prior to the payment in full of all principal and interest outstanding under the
Term D Loan Facility, the Required Term D Lenders can, by notice to the Company
84
at any time, block the payment of cash dividends by the Borrowers to the Company
for one period of 180 days and (ii) in any event no cash dividends may be paid
by any Borrower to the Company if a Default has occurred and is continuing;
PROVIDED, HOWEVER, that such dividend block under this clause (ii), if in
respect of non-payment Defaults, shall be for a period of not more than 180 days
from the date the Company is notified in writing of such non-payment Default
(and any subsequent 180 day dividend block in respect of non-payment Defaults
may not be made until 360 days have elapsed since receipt of the aforementioned
notice) and no non-payment Default that existed or was continuing on the date of
delivery of the aforementioned notice to the Administrative Agent shall be, or
be made, the basis for a subsequent dividend block, unless such Default has been
cured or waived for a period of not less than 180 days.
SECTION 11.8 LIMITATIONS ON EXCHANGE AND ISSUANCE OF CAPITAL STOCK.
Issue, sell or otherwise dispose of or have outstanding any class or series of
capital stock (including any warrants or options with respect to capital stock)
that, by its terms or by the terms of any security into which it is convertible
or exchangeable, is, or upon the happening of an event or passage of time would
be, (a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due, in each such case before the date that is six (6) months
after the Term C Loan Maturity Date (except for the Preferred Equity and equity
issued pursuant to an Authorized Capital Markets Transaction, which, in each
case, may not be redeemed or repurchased prior to the payment in full of all
Obligations and any issuance thereof shall be subject to Section 4.5 hereof).
SECTION 11.9 TRANSACTIONS WITH AFFILIATES. Directly or indirectly (a)
make any loan or advance to, or purchase or assume any note or other obligation
to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to any of its
Affiliates (other than as disclosed on SCHEDULE 11.4(E) and other than advances
to employees of the Company or any of its Subsidiaries for travel expenses in
the ordinary course of business not to exceed $500,000 in the aggregate at any
time) or (b) enter into, or be a party to, any other transaction with any of its
Affiliates (other than transactions expressly contemplated by the Loan
Documents, the Preferred Equity Documents and the Bridge Loan Documents),
except, in each case, pursuant to the reasonable requirements of its business
and upon fair and reasonable terms that are fully disclosed to and, if the
aggregate payments thereunder are likely to exceed $500,000 in any fiscal year,
approved in writing by the Required Lenders prior to the consummation thereof
and are no less favorable to it than it would obtain in a comparable arm's
length transaction with a Person not its Affiliate.
SECTION 11.10 CERTAIN ACCOUNTING CHANGES. Change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices except as
required by GAAP.
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SECTION 11.11 AMENDMENTS; PAYMENTS AND PREPAYMENTS OF SUBORDINATED
DEBT. (a) Except as expressly contemplated by Article VI hereof, amend or modify
(or permit the modification or amendment of) any of the terms or provisions of
any Subordinated Debt, the Preferred Equity Documents, the Bridge Loan Documents
or any Debt issued pursuant to Section 11.1(c) or (i), which amendment or
modification alters (i) the subordination provisions, (ii) the interest rate or
payment dates, (iii) the maturity or redemption date, (iv) any covenant or
default provision to make it more restrictive on the Company or any Borrower, or
(v) otherwise could reasonably be expected to adversely affect the Lenders (as
reasonably determined by the Administrative Agent), or (b) cancel or forgive,
make any voluntary or optional payment or prepayment of any principal of or
interest on, or redeem or acquire for value (including without limitation by way
of depositing with any trustee with respect thereto money or securities before
due for the purpose of paying when due) the Bridge Loans, the Preferred Equity
or any Subordinated Debt (or any permitted refinancing or other replacement of
any thereof).
SECTION 11.12 CHARTER DOCUMENTS. Except as expressly contemplated by
Section 6.2(b)(i)(D) or (g) hereof, amend or modify the Transaction Agreement,
any Related Transaction Document or certificate of incorporation or certificate
of formation of the Company or any Borrower, in any respect that could
reasonably be expected to materially adversely effect the Lenders (as reasonably
determined by the Administrative Agent).
SECTION 11.13 RESTRICTIVE AGREEMENTS. Enter into any Debt which
contains any negative pledge on assets or which restricts, limits or otherwise
encumbers its ability to incur Liens on or with respect to any of its assets or
properties other than the assets or properties securing such Debt, in each such
case other than such restrictions, limitations or encumbrances imposed by any
agreement or instrument evidencing the Obligations or the Bridge Loans, or enter
into any Debt which contains any covenants more restrictive than the provisions
of Articles IX, X and XI hereof.
SECTION 11.14 [Reserved.]
SECTION 11.15 FINANCIAL ADVISORS. Disengage or substantially change the
scope of service of the Borrowers' independent financial and restructuring
advisers without the prior written consent of the Required Lenders.
SECTION 11.16 FORMATION OF SUBSIDIARIES. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary without the prior
written consent of the Required Lenders.
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SECTION 11.17 LEASE, IRU AND INTERCONNECTION AGREEMENT OBLIGATIONS.
Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist after the Closing Date, any obligations
(a) as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction in an amount in excess of
$1,000,000, or (ii) for the rental or hire of other real or personal property of
any kind under leases or agreements to lease in each case with annual payments
in excess of $500,000 (other than Capital Leases permitted under section
11.1(e)), (b) under any IRU with annual payments in excess of $500,000 per annum
(other than as set forth on SCHEDULE 7.1(T)) or (c) under any Interconnection
Agreement entered into after the Closing Date or any extension, amendment,
modification, renegotiation, replacement or renewal thereof entered into after
the Closing Date with respect to an existing Interconnection Agreement that in
the reasonable judgment of the Company may have an adverse impact on the Company
and its Subsidiaries in excess of $2,000,000 in the aggregate, in each case,
without the prior written consent of the Required Lenders.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) DEFAULT IN PAYMENT OF PRINCIPAL OF LOANS AND REIMBURSEMENT
OBLIGATIONS. The Borrowers shall default in any payment of principal of any
Loan, Note or Reimbursement Obligation when and as due (whether at
maturity, by reason of acceleration or otherwise).
(b) OTHER PAYMENT DEFAULT. The Borrowers shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for three (3)
Business Days.
(c) MISREPRESENTATION. Any representation or warranty made or deemed to
be made by the Company or any of its Subsidiaries under this Agreement, any Loan
Document or any amendment hereto or thereto, shall at any time prove to have
been incorrect or misleading in any material respect when made or deemed made.
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(d) DEFAULT IN PERFORMANCE OF CERTAIN COVENANTS. The Company or
Borrowers, as applicable, shall default in the performance or observance of any
covenant or agreement contained in (i) Section 8.5(e), Section 9.12(f) or
Articles X or XI of this Agreement and such default shall continue unremedied
for three (3) Business Days or (ii) Article VIII of this Agreement and such
default shall continue unremedied for ten (10) Business Days.
(e) DEFAULT IN PERFORMANCE OF OTHER COVENANTS AND CONDITIONS. The
Company or any Subsidiary thereof shall default in the performance or observance
of any term, covenant, condition or agreement contained in this Agreement (other
than as specifically provided for otherwise in this Section 12.1) or any other
Loan Document and such default shall continue for a period of thirty (30) days
after (i) written notice thereof has been given to the Company or any Borrower
by the Administrative Agent or (ii) a Responsible Officer of the Company or any
Borrower shall have actual knowledge of such default.
(f) HEDGING AGREEMENT. Any termination payment shall be due by a
Borrower under any Hedging Agreement and such amount is not paid within thirty
(30) Business Days of the due date thereof (unless such payment is contested in
good faith by appropriate proceedings by the Company or such Borrower).
(g) DEBT CROSS-DEFAULT. The Company or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $2,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $2,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, in each case
with the giving of notice if required, any such Debt to become due prior to its
stated maturity (any applicable grace period having expired, other than, in the
case of clause (ii) only, if such default is by reason of an interest blockage
thrown by the Required Term D Lenders in accordance with clause (i) of the
second proviso to Section 11.7(d)).
(h) OTHER CROSS-DEFAULTS. The Company or any of its Subsidiaries shall
default in the payment when due, or in the performance or observance, of any
obligation or condition of any Material Contract unless, but only as long as,
the existence of any such default is being contested by the Company or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of the Company or such
Subsidiary to the extent required by GAAP and, with respect to contracts
described in clause (a) of the definition of Material Contracts, such default
could not reasonably be expected to have a Material Adverse Effect.
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(i) CHANGE IN CONTROL. (a) Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
other than MSDWCP or the Management Members or the Bridge Lenders shall obtain
ownership or control in one or more series of transactions of more than
twenty-five percent (25%) of the common stock or other voting securities or
control of the board of directors of the Company or (b) except as otherwise
permitted herein, any Borrower shall no longer be a Wholly-Owned Subsidiary of
the Company or any such Person shall be party to any agreement which
contemplates that it shall not be such a Wholly-Owned Subsidiary, (c) there
shall have occurred under the Preferred Equity Documents or under any indenture
or other instrument evidencing any Debt in excess of $2,000,000 any "change in
control" (as defined in the Preferred Equity Documents or in such indenture or
other evidence of Debt) obligating the Borrowers or the Company to repurchase,
redeem or repay all or any part of the Debt or capital stock provided for
therein, or (d) ▇▇▇▇▇ ▇▇▇▇▇▇ shall no longer be the chief executive officer of
the Company and shall not have been replaced with a qualified replacement within
(A) 90 days of such event, if the Company shall have received prior notice of
such event or (B) 120 days of such event, if the Company shall not have received
prior notice of such event.
(j) VOLUNTARY BANKRUPTCY PROCEEDING. The Company or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other proceeding shall
be commenced against the Company or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Company or any Subsidiary thereof or for all or any substantial
part of their respective assets, domestic or foreign, and such case or
proceeding shall continue without dismissal or stay for a period of sixty (60)
consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
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(l) FAILURE OF AGREEMENTS. Any provision of this Agreement or of any
other Loan Document shall for any reason cease to be valid and binding on the
Company or Subsidiary party thereto or any such Person shall so state in
writing, or this Agreement or any other Loan Document shall for any reason cease
to create a valid and perfected first priority Lien on, or security interest in,
any of the collateral purported to be covered thereby, in each case other than
in accordance with the express terms hereof or thereof and excluding any such
collateral with a fair market value of less than $2,000,000 in the aggregate.
(m) TERMINATION EVENT. The occurrence of any of the following events:
(i) the Company or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Company or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $2,000,000 occurs
or exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Company or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $2,000,000.
(n) JUDGMENT. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments which are not covered by insurance to
exceed $2,000,000 in any Fiscal Year shall be entered against the Company or any
of its Subsidiaries by any court and such judgment or order shall continue
without discharge or stay for a period of thirty (30) days.
(o) LOSS OF LICENSE. Any Communications License of the Company or any
Subsidiary thereof shall expire, terminate, be canceled or otherwise lost or any
application therefor be rejected, which event could reasonably be expected to
have a Material Adverse Effect.
(p) TRANSACTION AGREEMENT AND RELATED TRANSACTIONS.
(i) Any default or event of default shall occur under the
Transaction Agreement which default or event of default shall continue
unremedied for a period of thirty (30) days after written notice thereof has
been given to the Company by the Administrative Agent.
(ii) Any event of default shall occur and be continuing under
the Bridge Loan Documents or the Preferred Equity Documents.
(iii) Any holder of Preferred Equity shall exercise its right
to put its shares of Preferred Equity to the Company in accordance with the
terms of the Preferred Equity Documents.
(q) LIMITED SUBSIDIARIES. Any Limited Subsidiary shall not
receive the PUC Authorizations set forth in Section 9.21 by December 30,
2002.
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(r) DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS. The Company and its
Subsidiaries shall fail to deliver the documents required by Section 9.12(e) in
accordance with the time limits set forth therein with respect to each Deposit
Account and each "securities account" (as defined in the UCC) set forth on
SCHEDULE 7.1(AA).
SECTION 12.2 REMEDIES. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Company:
(a) ACCELERATION; TERMINATION OF CREDIT FACILITY. Declare the principal
of and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(other than any Hedging Agreement) (including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and all other
Obligations (other than obligations owing under any Hedging Agreement), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any right of the Borrowers to request borrowings or Letters of Credit
thereunder; PROVIDED that upon the occurrence of an Event of Default specified
in Section 12.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than obligations owing under any Hedging Agreement)
shall automatically become due and payable.
(b) LETTERS OF CREDIT. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers.
(c) RIGHTS OF COLLECTION. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations. In connection
therewith, the Company and its Subsidiaries hereby consent to the appointment of
a trustee, receiver, custodian, liquidator or the like for the Company or any
Subsidiary thereof or for all or any substantial part of their respective
assets.
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SECTION 12.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Company, any Borrower, the Administrative Agent and the Lenders or
their respective agents or employees shall be effective to change, modify or
discharge any provision of this Agreement or any of the other Loan Documents or
to constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
SECTION 13.1 APPOINTMENT. Each of the Lenders hereby irrevocably
designates and appoints Wachovia as Administrative Agent and as Collateral Agent
of such Lender under this Agreement and the other Loan Documents for the term
hereof and each such Lender irrevocably authorizes Wachovia as Administrative
Agent and as Collateral Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent and/or the Collateral Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent and the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the other Loan
Documents or otherwise exist against the Administrative Agent and/or the
Collateral Agent. Any reference to the Administrative Agent or the Collateral
Agent in this Article XIII shall be deemed to refer to the Administrative Agent
or the Collateral Agent solely in its capacity as Administrative Agent or the
Collateral Agent and not in its capacity as a Lender.
SECTION 13.2 DELEGATION OF DUTIES. (a) The Administrative Agent and the
Collateral Agent may each execute any of its respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent and the Collateral Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Administrative Agent or the Collateral Agent with reasonable
care.
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(b) Wachovia may delegate any or all of its powers and duties as
Administrative Agent or Collateral Agent hereunder and under the other Loan
Documents to Wachovia Bank, National Association and/or other affiliates or
agents as agreed to by such Persons.
SECTION 13.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor the Collateral Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for actions occasioned by its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Company or its
Subsidiaries or any officer thereof contained in this Agreement or the other
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent or the
Collateral Agent under or in connection with, this Agreement or the other Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the other Loan Documents or for any failure
of the Company or any Subsidiary thereof to perform its obligations hereunder or
thereunder. The Administrative Agent and the Collateral Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Company or any
of its Subsidiaries.
SECTION 13.4 RELIANCE. The Administrative Agent and the Collateral
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Company and the Borrowers), independent accountants and other experts selected
by the Administrative Agent or the Collateral Agent. The Administrative Agent
and the Collateral Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 15.10 hereof. The Administrative Agent and the
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Document, any other specified
group of Lenders or all the Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action except for its own gross negligence or willful misconduct.
The Administrative Agent and the Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, any other specified group of Lenders or all the Lenders), and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
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SECTION 13.5 NOTICE OF DEFAULT. The Administrative Agent and the
Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder other than a Default or
Event of Default of the types specified in Section 12.1(a) or (b) unless it has
received notice from a Lender, the Company or any Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent or
the Collateral Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent or the Collateral Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; PROVIDED that unless and until the
Administrative Agent and/or the Collateral Agent shall have received such
directions, the Administrative Agent and/or the Collateral Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders, EXCEPT to the extent that other provisions of
this Agreement expressly require that any such action be taken or not be taken
only with the consent and authorization or the request of the Lenders or
Required Lenders or any other specified group of Lenders, as applicable.
SECTION 13.6 NON-RELIANCE ON THE ADMINISTRATIVE AGENT, COLLATERAL AGENT
AND OTHER LENDERS. Each Lender expressly acknowledges that neither the
Administrative Agent, the Collateral Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent or the Collateral Agent hereinafter taken, including any
review of the affairs of the Company or any of its Subsidiaries, shall be deemed
to constitute any representation or warranty by the Administrative Agent or the
Collateral Agent to any Lender. Each Lender represents to the Administrative
Agent and the Collateral Agent that it has, independently and without reliance
upon the Administrative Agent or the Collateral Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries and made its own decision to make its Loans and issue or
participate in Letter of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or the Collateral 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 analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent or
the Collateral Agent hereunder or by the other Loan Documents, the
Administrative Agent and the Collateral Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company or any of its Subsidiaries which may come into
the possession of the Administrative Agent or the Collateral Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
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SECTION 13.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent and the Collateral Agent in their respective capacities as
such and (to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to the respective
amounts of their Revolving Credit Commitment Percentages, Term A Loan
Percentages, Term B Loan Percentages, Term C Loan Percentages and Term D Loan
Percentages, as applicable, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Administrative Agent or the Collateral Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent or the Collateral Agent under or in connection with any of
the foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from (a) in the
case of the Administrative Agent, the Administrative Agent's bad faith, gross
negligence or willful misconduct or (b) in the case of the Collateral Agent, the
Collateral Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 13.7 shall survive the payment of the Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
SECTION 13.8 THE ADMINISTRATIVE AGENT OR COLLATERAL AGENT IN ITS
INDIVIDUAL CAPACITY. The Administrative Agent and/or the Collateral Agent in its
individual capacity and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Company and its Subsidiaries as though the Administrative Agent and/or the
Collateral Agent were not the Administrative Agent and/or the Collateral Agent
hereunder. With respect to any Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued by it or participated in
by it, the Administrative Agent and/or the Collateral Agent in its individual
capacity shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not an Administrative Agent and/or the Collateral Agent, and the terms "Lender"
and "Lenders" shall include the Administrative Agent and/or the Collateral Agent
in its individual capacity.
SECTION 13.9 RESIGNATION OF THE ADMINISTRATIVE AGENT OR COLLATERAL
AGENT; SUCCESSOR ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Subject to the
appointment and acceptance of a successor as provided below, the Administrative
Agent and/or the Collateral Agent may resign at any time by giving thirty (30)
days prior notice thereof to the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent and/or the Collateral Agent, which successor shall have
minimum capital and surplus of at least $500,000,000.
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If no successor Administrative Agent or Collateral Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the Administrative Agent's and/or the Collateral
Agent's giving of notice of resignation, then the Administrative Agent or
Collateral Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent or Collateral Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent or Collateral Agent hereunder by a successor
Administrative Agent or Collateral Agent, such successor Administrative Agent or
Collateral Agent shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent or Collateral
Agent, and the retiring Administrative Agent or Collateral Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After any retiring Administrative Agent's or Collateral Agent's
resignation hereunder as Administrative Agent or Collateral Agent, the
provisions of this Article XIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent or Collateral Agent.
SECTION 13.10 OTHER AGENTS. The Syndication Agent and the Documentation
Agent, each in its capacity as such, shall have no duties or responsibilities
and no liabilities under this Agreement or any other Loan Document.
ARTICLE XIV
UNCONDITIONAL GUARANTY
SECTION 14.1 GUARANTY OF OBLIGATIONS. The Company hereby
unconditionally guarantees to the Administrative Agent for the ratable benefit
of the Agents and the Lenders, and their respective successors, endorsees,
transferees and assigns, the prompt payment and performance of all Obligations
of the Borrowers, whether primary or secondary (whether by way of endorsement or
otherwise), whether now existing or hereafter arising, whether or not from time
to time reduced or extinguished (except by payment thereof) or hereafter
increased or incurred, whether or not recovery may be or hereafter become barred
by the statute of limitations, whether enforceable or unenforceable as against
any such Borrower, whether or not discharged, stayed or otherwise affected by
any bankruptcy, insolvency or other similar law or proceeding, whether created
directly with any Agent or Lender or acquired by any Agent or Lender through
assignment, endorsement or otherwise, whether matured or unmatured, whether
joint or several, as and when the same become due and payable (whether at
maturity or earlier, by reason of acceleration, mandatory repayment or
otherwise), in accordance with the terms of any such instruments evidencing any
such obligations, including all renewals, extensions or modifications thereof
(all Obligations of each such Borrower to any Agent or Lender, including all of
the foregoing, being hereinafter collectively referred to as the "GUARANTEED
OBLIGATIONS").
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SECTION 14.2 NATURE OF GUARANTY. The Company agrees that this Guaranty
is a continuing, unconditional guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be primary,
absolute and unconditional, irrespective of, and unaffected by (a) the
genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this Agreement or any other Loan Document or any other agreement,
document or instrument to which any such Borrower is or may become a party, (b)
the absence of any action to enforce this Guaranty, this Agreement or any other
Loan Document or the waiver or consent by the Administrative Agent or any Lender
with respect to any of the provisions of this Guaranty, this Agreement or any
other Loan Document, (c) the existence, value or condition of, or failure to
perfect its Lien against, any security for or other guaranty of the Guaranteed
Obligations or any action, or the absence of any action, by the Administrative
Agent or any Lender in respect of such security or guaranty (including, without
limitation, the release of any such security or guaranty) or (d) any other
action or circumstances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor; it being agreed by the Company
that its obligations under this Guaranty shall not be discharged until the final
and indefeasible payment and performance, in full, of the Guaranteed Obligations
and the termination of the Commitments. The Company expressly waives all rights
it may now or in the future have under any statute, or at law or in equity, or
otherwise, to compel the Administrative Agent or any Lender to proceed in
respect of the Guaranteed Obligations against any such Borrower or any other
party or against any security for or other guaranty of the payment and
performance of the Guaranteed Obligations before proceeding against, or as a
condition to proceeding against, the Company. The Company further expressly
waives and agrees not to assert or take advantage of any defense based upon the
failure of the Administrative Agent or any Lender to commence an action in
respect of the Guaranteed Obligations against any such Borrower, the Company or
any other party or any security for the payment and performance of the
Guaranteed Obligations. The Company agrees that any notice or directive given at
any time to the Administrative Agent or any Lender which is inconsistent with
the waivers in the preceding two sentences shall be null and void and may be
ignored by the Administrative Agent or Lender, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this Guaranty
for the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless the Administrative Agent and the Required
Lenders have specifically agreed otherwise in writing. The foregoing waivers are
of the essence of the transaction contemplated by the Loan Documents and, but
for this Guaranty and such waivers, the Agents and Lenders would decline to
enter into this Agreement.
SECTION 14.3 DEMAND BY THE ADMINISTRATIVE AGENT. In addition to the
terms set forth in Section 14.2, and in no manner imposing any limitation on
such terms, if all or any portion of the then outstanding Guaranteed Obligations
under this Agreement are declared to be immediately due and payable, then the
Company shall, upon demand in writing therefor by the Administrative Agent to
the Company, pay all or such portion of the outstanding Guaranteed Obligations
then declared due and payable. Payment by the Company shall be made to the
Administrative Agent, to be credited and applied upon the Guaranteed
Obligations, in immediately available funds to an account designated by the
Administrative Agent or at the Administrative Agent's office or at any other
address that may be specified in writing from time to time by the Administrative
Agent.
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SECTION 14.4 WAIVERS. In addition to the waivers contained in Section
14.2, the Company waives, and agrees that it shall not at any time insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshalling of assets or redemption laws,
or exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by the Company of its obligations
under, or the enforcement by the Administrative Agent or the Lenders of, this
Guaranty. The Company further hereby waives diligence, presentment, demand,
protest and notice of whatever kind or nature with respect to any of the
Guaranteed Obligations and waives the benefit of all provisions of law which are
or might be in conflict with the terms of this Guaranty. The Company represents,
warrants and agrees that its obligations under this Guaranty are not and shall
not be subject to any counterclaims, offsets or defenses of any kind against the
Administrative Agent, the Lenders or any such Borrower whether now existing or
which may arise in the future.
SECTION 14.5 MODIFICATION OF LOAN DOCUMENTS, ETC. If the Administrative
Agent or the Lenders shall at any time or from time to time, with or without the
consent of, or notice to, the Company (a) change or extend the manner, place or
terms of payment of, or renew or alter all or any portion of, the Guaranteed
Obligations, (b) take any action under or in respect of the Loan Documents in
the exercise of any remedy, power or privilege contained therein or available to
it at law, in equity or otherwise, or waive or refrain from exercising any such
remedies, powers or privileges, (c) amend or modify, in any manner whatsoever,
the Loan Documents, (d) extend or waive the time for performance by the Company,
any such Borrower or any other Person of, or compliance with, any term, covenant
or agreement on its part to be performed or observed under a Loan Document
(other than this Guaranty), or waive such performance or compliance or consent
to a failure of, or departure from, such performance or compliance, (e) take and
hold security or collateral for the payment of the Guaranteed Obligations or
sell, exchange, release, dispose of, or otherwise deal with, any property
pledged, mortgaged or conveyed, or in which the Administrative Agent or the
Lenders have been granted a Lien, to secure any Debt of the Company or any such
Borrower to any Agent or the Lenders, (f) release anyone who may be liable in
any manner for the payment of any amounts owed by the Company or any such
Borrower to any Agent or Lender, (g) modify or terminate the terms of any
intercreditor or subordination agreement pursuant to which claims of other
creditors of the Company or any such Borrower are subordinated to the claims of
any Agent or Lender or (h) apply any sums by whomever paid or however realized
to any amounts owing by the Company or any such Borrower to any Agent or Lender
on account of the Obligations in such manner as the Administrative Agent or any
Lender shall determine in its reasonable discretion; then neither the
Administrative Agent nor any Lender shall incur any liability to the Company as
a result thereof, and no such action shall impair or release the obligations of
the Company under this Guaranty.
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SECTION 14.6 REINSTATEMENT. The Company agrees that, if any payment
made by any Borrower or any other Person applied to the Obligations is at any
time annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
Collateral are required to be returned by any Agent or Lender to any such
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, the Company, under any Applicable Law or equitable cause, then, to
the extent of such payment or repayment, the Company's liability hereunder (and
any Lien or Collateral securing such liability) shall be and remain in full
force and effect, as fully as if such payment had never been made, and, if prior
thereto, this Guaranty shall have been canceled or surrendered (and if any Lien
or Collateral securing the Company's liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien or Collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of the Company in respect
of the amount of such payment (or any Lien or Collateral securing such
obligation).
SECTION 14.7 NO SUBROGATION. Until all amounts owing to the Agents and
Lenders on account of the Obligations are paid in full and the Commitments are
terminated, the Company hereby waives any claims or other rights which it may
now or hereafter acquire against any such Borrower that arise from the existence
or performance of the Company's obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, any right to participate in any claim or remedy of the
Administrative Agent or the Lenders against any such Borrower or any Collateral
which the Administrative Agent or the Lenders now have or may hereafter acquire,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, by any payment made hereunder or otherwise, including
without limitation, the right to take or receive from any such Borrower,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to the Company on account of such rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by the Company in trust for the Administrative Agent, segregated from other
funds of the Company, and shall, forthwith upon receipt by the Company, be
turned over to the Administrative Agent in the exact form received by the
Company (duly indorsed by the Company to the Administrative Agent, if required)
to be applied against the Obligations, whether matured or unmatured, in such
order as set forth herein.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1 NOTICES.
(a) METHOD OF COMMUNICATION. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) ADDRESSES FOR NOTICES. Notices to any party shall be sent to
it at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Company or
Borrowers: Choice One Communications Inc.
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Wachovia, as Wachovia Investors, Inc.
Administrative Agent: Charlotte Plaza CP-23
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on
SCHEDULE 1.1(A) hereto or in any
questionnaire delivered by any
Lender to the Administrative
Agent after the Closing Date.
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(c) ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 15.2 EXPENSES; INDEMNITY. The Borrowers on a joint and several
basis will (a) pay all out-of-pocket expenses (i) of the Administrative Agent
and the Lenders in connection with the preparation, execution and delivery of
this Agreement and each other Loan Document, whenever the same shall be executed
and delivered, including without limitation all out-of-pocket syndication and
due diligence expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and (ii) of the Administrative Agent in connection with the
preparation, execution and delivery of any waiver, amendment or consent by the
Administrative Agent or the Lenders relating to this Agreement or any other Loan
Document, including without limitation reasonable fees and disbursements of
counsel for the Administrative Agent, (b) pay all reasonable out-of-pocket
expenses of the Administrative Agent and each Lender actually incurred in
connection with the administration and enforcement of any rights and remedies of
the Administrative Agent and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim, investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Lender is a party
thereto) and the prosecution and defense thereof, arising out of or in any way
connected with the Agreement, any other Loan Document or the Loans, including
without limitation reasonable attorney's and consultant's fees, except to the
extent that any of the foregoing directly result from the gross negligence or
willful misconduct of the party seeking indemnification therefor.
SECTION 15.3 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 15.10 are hereby authorized by the Borrowers at any time or from
time to time, without notice to the Borrowers or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account
of the Borrowers against and on account of the Obligations irrespective of
whether or not (a) the Lenders shall have made any demand under this Agreement
or any of the other Loan Documents or (b) the Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 11.2 and although such Obligations shall be contingent or unmatured.
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SECTION 15.4 GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of New York.
SECTION 15.5 CONSENT TO JURISDICTION. The Company and each Borrower
hereby irrevocably consents to the personal jurisdiction of the state and
federal courts located in New York County, New York, in any action, claim or
other proceeding arising out of any dispute in connection with this Agreement,
the Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations. The Company and
each Borrower hereby irrevocably consents to the service of a summons and
complaint and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the Notes
or the other Loan Documents, any rights or obligations hereunder or thereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 15.1. Nothing in this Section 15.5
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding against
the Company and each Borrower or its properties in the courts of any other
jurisdictions. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by Applicable Law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in any
court specified above and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 15.6 WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH
LENDER, THE COMPANY AND EACH BORROWER HEREBY ACKNOWLEDGE THAT THEY IRREVOCABLY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE (AS HEREINAFTER DEFINED) IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. FOR THE PURPOSE OF THIS AGREEMENT, "DISPUTE" MEANS ANY DISPUTE,
CLAIM OR CONTROVERSY ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT. "DISPUTES" MAY INCLUDE, WITHOUT
LIMITATION, TORT CLAIMS, COUNTERCLAIMS, CLAIMS BROUGHT AS CLASS ACTIONS, CLAIMS
ARISING FROM LOAN DOCUMENTS EXECUTED IN THE FUTURE, DISPUTES AS TO WHETHER A
MATTER IS SUBJECT TO ARBITRATION, OR CLAIMS CONCERNING ANY ASPECT OF THE PAST,
PRESENT OR FUTURE RELATIONSHIPS ARISING OUT OF OR CONNECTED WITH THE LOAN
DOCUMENTS.
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SECTION 15.7 REVERSAL OF PAYMENTS. To the extent the Company or any
Borrower makes a payment or payments to the Administrative Agent for the benefit
of one or more Lenders or the Administrative Agent receives any payment or
proceeds of the collateral which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 15.8 INJUNCTIVE RELIEF; PUNITIVE DAMAGES.
(a) The Company and each Borrower recognize that, in the event any such
Person fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Lenders. Therefore, the Company and each Borrower agree that the
Lenders, at the Lenders' option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
(b) The Agents, Lenders and the Company and each Borrower (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 15.9 ACCOUNTING MATTERS. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Company or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Company, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Company's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Company or
Borrowers and the Lenders shall have amended this Agreement to the extent
necessary to reflect any such changes in the financial covenants and other terms
and conditions of this Agreement.
103
SECTION 15.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the Company, the Borrowers, the Administrative Agent and
the Lenders, all future holders of the Notes, and their respective successors
and assigns, except that the Company and each Borrower shall not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) ASSIGNMENT BY LENDERS. Each Lender may, with the consent of the
Borrowers (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Notes held by it); PROVIDED that:
(i) no consent of the Administrative Agent or
Borrowers shall be required of any such assignment to an Affiliate of
the assigning Lender or any of its Subsidiaries or in the case of any
assigning Lender that is a fund that invests in commercial loans, to
any other fund that invests in commercial loans and that is managed or
advised by the same investment advisor or fund manager as such
assigning Lender or an Affiliate of such investment advisor or fund
manager, so long as the assignment otherwise complies with the terms
hereof;
(ii) with respect to its Revolving Credit Commitment,
Term A Loan Commitment, Term B Loan Commitment, Term C Loan Commitment
or Term D Loan Commitment and the respective Loans thereunder, each
such assignment shall be of a constant, and not a varying, percentage
of all such assigning Lender's rights and obligations under the
Revolving Credit Facility, the Term A Loan Facility, the Term B Loan
Facility, the Term C Loan Facility or the Term D Loan Facility, as
applicable;
(iii) if less than all of the assigning Lender's
Revolving Credit Commitment, Term A Loan Commitment, Term B Loan
Commitment, Term C Loan Commitment or Term D Loan Commitment, as
applicable, is to be assigned, the Commitment so assigned shall not be
less than $1,000,000;
(iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in the form of
EXHIBIT G attached hereto (an "ASSIGNMENT AND ACCEPTANCE"), together
with any Note or Notes subject to such assignment;
(v) such assignment shall not, without the consent of
the Borrowers, require the Borrowers to file a registration statement
with the SEC or apply to or qualify the Loans or the Notes under the
blue sky laws of any state;
(vi)such lender assignee expressly acknowledges
and agrees to be bound by the terms of the Intercreditor Agreement;
and
104
(vii) the assigning Lender shall pay to the
Administrative Agent an assignment fee of $3,500 upon the execution by
such Lender of the Assignment and Acceptance; PROVIDED that no such fee
shall be payable upon any assignment by a Lender to an Affiliate
thereof or any of its Subsidiaries or in the case of any assigning
Lender that is a fund that invests in commercial loans, to any other
fund that invests in commercial loans and that is managed or advised by
the same investment advisor or fund manager as such assigning Lender or
an Affiliate of such investment advisor or fund manager.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) RIGHTS AND DUTIES UPON ASSIGNMENT. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) ISSUANCE OF NEW NOTES. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of EXHIBIT G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrowers; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrowers.
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Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment (or aggregate principal amount of Loans, if no
Commitment is assumed) assumed by it pursuant to such Assignment and Acceptance
and a new Note or Notes to the order of the assigning Lender in an amount equal
to the Commitment (or aggregate principal amount of Loans, if no Commitment is
retained) retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled and returned to the Borrowers.
(f) PARTICIPATIONS. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); PROVIDED that:
(i) each such participation shall be in an amount
not less than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment, Term A
Loan Commitment, Term B Loan Commitment, Term C Loan Commitment or Term
D Loan Commitment, as applicable) shall remain unchanged;
(iii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the
Notes held by it for all purposes of this Agreement;
(v) the Company, the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement;
(vi) such Lender shall not permit such participant
the right to approve any waivers, amendments or other modifications to
this Agreement or any other Loan Document other than waivers,
amendments or modifications which would reduce the principal of or the
interest rate on any Loan or Reimbursement Obligation in which such
Participant is participating, extend the term or increase the amount of
the Commitment in which such Participant is participating, reduce the
amount of any fees to which such participant is entitled, extend any
scheduled payment date for principal of any Loan in which such
Participant is participating or, except as expressly contemplated
hereby or thereby, release substantially all of the Collateral; and
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(vii) any such disposition shall not, without the
consent of the Borrowers, require the Borrowers to file a registration
statement with the SEC to apply to qualify the Loans or the Notes under
the blue sky law of any state.
(g) DISCLOSURE OF INFORMATION; CONFIDENTIALITY. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Company and the Borrowers obtained pursuant to the Loan Documents in accordance
with their customary procedures for handling confidential information; PROVIDED
that the Administrative Agent may disclose information relating to this
Agreement to GOLD SHEETS and other similar bank trade publications, such
information to consist of deal terms and other information customarily found in
such publications; and PROVIDED FURTHER that the Administrative Agent and
Lenders may disclose any such information to the extent such disclosure is
required by law or requested by any regulatory authority. Any Lender may, in
connection with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 15.10, disclose to the assignee,
participant, proposed assignee or proposed participant, any information relating
to the Company and the Borrowers furnished to such Lender by or on behalf of the
Borrowers; PROVIDED that prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall agree with the
Borrowers or such Lender to preserve the confidentiality of any confidential
information relating to the Borrowers received from such Lender.
(h) CERTAIN PLEDGES OR ASSIGNMENTS. Nothing herein shall prohibit
any Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 15.11 AMENDMENTS, WAIVERS AND CONSENTS. Any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents
(other than any Hedging Agreement, the terms and conditions of which may be
amended, modified or waived by the parties thereto, and except that amendments
and waivers of Sections 6.2(g)(iii), 7.1(cc) and 9.23 shall only require the
consent of Lenders who hold Company New Warrants, and the same percentage of
such holders as is required under the terms of the Company New Warrants to
approve amendments and waivers thereto shall be required for such amendments and
waivers hereunder) may be amended or waived by the Lenders, and any consent
given by the Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders (or by the Administrative Agent with the
consent of the Required Lenders) and delivered to the Administrative Agent and,
in the case of an amendment (other than in respect of the Intercreditor
Agreement), signed by the Company, on behalf of itself and the Borrowers;
PROVIDED that in addition no amendment, waiver or consent shall:
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(a) (i) increase the Revolving Credit Commitment of any
Revolving Credit Lender, (ii) reduce the rate of interest or fees
payable on any Revolving Credit Loan, Revolving Credit Commitment or
Reimbursement Obligation, (iii) reduce or forgive the principal amount
of any Revolving Credit Loan or the amount of any Reimbursement
Obligation, (iv) extend the originally scheduled time or times of
payment of the principal of any Revolving Credit Loan or Reimbursement
Obligation or the time or times of payment of interest on any Revolving
Credit Loan or Reimbursement Obligation or any fee or commission with
respect thereto, (v) permit any subordination of the principal or
interest on any Revolving Credit Loan or Reimbursement Obligation or
any Lien securing any Obligation in respect of any Revolving Credit
Loan or Reimbursement Obligation (other than as contemplated hereby or
by the Intercreditor Agreement) or (vi) extend the time of the
obligation of the Revolving Credit Lenders to make or issue or
participate in Letters of Credit, in any case, without the written
consent of each Revolving Credit Lender;
(b) (i) increase the Term A Loan Commitment of any Lender,
(ii) reduce the rate of interest or fees payable on any Term A Loan or
Term A Loan Commitment, (iii) reduce or forgive the principal amount of
any Term A Loan, (iv) permit any subordination of the principal or
interest on any Term A Loan or any Lien securing any Obligation in
respect of any Term A Loan (other than as contemplated hereby or by the
Intercreditor Agreement) or (v) extend the originally scheduled time or
times of payment of the principal of any Term A Loan or the time or
times of payment of interest on any Term A Loan or any fee or
commission with respect thereto, in any case, without the written
consent of each Term A Lender;
(c) (i) increase the Term B Loan Commitment of any Lender,
(ii) reduce the rate of interest or fees payable on any Term B Loan,
(iii) reduce or forgive the principal amount of any Term B Loan, (iv)
permit any subordination of the principal or interest on any Term B
Loan or any Lien securing any Obligation in respect of any Term B Loan
(other than as contemplated hereby or by the Intercreditor Agreement)
or (v) extend the originally scheduled time or times of payment of the
principal of any Term B Loan or the time or times of payment of
interest on any Term B Loan or any fee or commission with respect
thereto, in any case, without the written consent of each Term B
Lender;
(d) (i) increase the Term C Loan Commitment of any Lender,
(ii) reduce the rate of interest or fees payable on any Term C Loan,
(iii) reduce or forgive the principal amount of any Term C Loan, (iv)
permit any subordination of the principal or interest on any Term C
Loan or any Lien securing any Obligation in respect of any Term C Loan
(other than as contemplated hereby or by the Intercreditor Agreement)
or (v) extend the originally scheduled time or times of payment of the
principal of any Term C Loan or the time or times of payment of
interest on any Term C Loan or any fee or commission with respect
thereto, in any case, without the written consent of each Term C
Lender;
108
(e) (i) increase the Term D Loan Commitment of any Lender,
(ii) reduce the rate of interest or fees payable on any Term D Loan,
(iii) reduce or forgive the principal amount of any Term D Loan, (iv)
permit any subordination of the principal or interest on any Term D
Loan or any Lien securing any Obligation in respect of any Term D Loan
or (v) extend the originally scheduled time or times of payment of the
principal of any Term D Loan or the time or times of payment of
interest on any Term D Loan or any fee or commission with respect
thereto, in any case, without the written consent of each Term D
Lender;
(f) (i) release the Company or any Borrower from its
Obligations hereunder or under any other Loan Document, (ii) permit any
assignment (other than as specifically permitted or contemplated in
this Agreement) of any of the Company's or Borrower's rights and
obligations hereunder or under any other Loan Document, (iii) release
any material portion of the Collateral or release any Security Document
or any Guarantor (other than asset sales permitted pursuant to Section
11.6 and as otherwise specifically permitted or contemplated in this
Agreement or the applicable Security Document), (iv) amend or waive any
provision of this Agreement relating to the allocation of prepayments
hereunder or (v) amend the provisions of this Section 15.11 without in
each case the prior written consent of each Lender;
(g) so long as MSDWCP is a Lender, adversely affect MSDWCP as
a Lender in a manner different from such effect on the other Term C
Lenders without the consent of MSDWCP; or
(h) amend the definition or Required Lenders without the
consent of each Lender (other than MSDWCP).
In addition, (x) no amendment, waiver or consent to the provisions of (a)
Article XIII shall be made without the written consent of the Administrative
Agent and (b) Article III without the written consent of the Issuing Lender and
(y) the execution counterparts of all amendments or waivers with respect to the
Loan Documents requested by the Company shall be submitted to all of the Lenders
(including MSDWCP, so long as it holds any Extensions of Credit).
Also, it is understood and agreed that all references to the date September 12,
2002 in the Extension Letter with respect to the Consent and Waiver shall be
deemed to be references to the date September 13, 2002.
SECTION 15.12 PERFORMANCE OF DUTIES. The Company's and the Borrowers'
obligations under this Agreement and each of the Loan Documents shall be
performed thereby at their sole cost and expense.
SECTION 15.13 ALL POWERS COUPLED WITH INTEREST. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
109
SECTION 15.14 SURVIVAL OF INDEMNITIES. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XV and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before.
SECTION 15.15 TITLES AND CAPTIONS. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 15.16 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 15.17 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 15.18 TERM OF AGREEMENT. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. The
Administrative Agent is hereby permitted to release all Liens (a) on the
collateral provided pursuant to the Security Documents in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders, upon
repayment of the outstanding principal of and all accrued interest on the Loans,
payment of all outstanding fees and expenses hereunder and the termination of
the Lender's Commitments and (b) on any collateral provided pursuant to any
Security Document which is sold, transferred or otherwise disposed of to any
Person (other than the Company or any Borrower) pursuant to a transaction
permitted hereunder. No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such termination.
SECTION 15.19 INCONSISTENCIES WITH OTHER DOCUMENTS; INDEPENDENT EFFECT
OF COVENANTS.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; PROVIDED that any provision of the Security Documents which imposes
additional burdens on the Company or its Subsidiaries or further restricts the
rights of the Company or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
110
(b) The Company and the Borrowers expressly acknowledge and agree that
each covenant contained in Articles IX, X or XI hereof shall be given
independent effect. Accordingly, neither the Company nor any Borrower shall
engage in any transaction or other act otherwise permitted under any covenant
contained in Articles IX, X or XI if, before or after giving effect to such
transaction or act, the Company or such Borrower shall or would be in breach of
any other covenant contained in Articles IX, X or XI.
SECTION 15.20 COMPANY AS AGENT FOR BORROWERS; OBLIGATIONS JOINT
AND SEVERAL; AGREEMENTS FOR CONTRIBUTION.
(a) The Borrowers hereby irrevocably appoint and authorize the Company
(i) to provide the Administrative Agent with all notices with respect to
Extensions of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action on
behalf of the Borrowers as it deems appropriate to obtain Extensions of Credit
and to exercise such other powers as are reasonably incidental thereto to carry
out the purposes of this Agreement.
(b) All of the Borrowers shall be jointly and severally liable for the
Obligations, however incurred, and references to the Borrowers with respect to
the Obligations or any portion thereof shall mean each Borrower on a joint and
several basis; PROVIDED that notwithstanding anything else herein to the
contrary, the Obligations owing by any Limited Subsidiary in excess of
$350,000,000 while designated a Limited Subsidiary shall mature and be payable
in full on the date that is 364 days after the Closing Date (the "END DATE");
and PROVIDED FURTHER that notwithstanding anything else herein to the contrary,
unless each Limited Subsidiary has received the PUC Authorizations set forth in
Section 9.21 by the End Date, all Obligations of all the Borrowers and the
Company shall become due and payable on the End Date.
(c) To the extent any Borrower is required, by reason of its
Obligations hereunder, to pay to the Administrative Agent and the Lenders an
amount greater than the amount of Extensions of Credit actually made available
to or for the account of such Borrower, such Borrower shall have an enforceable
right of contribution against the remaining Borrowers, and the remaining
Borrowers shall be jointly and severally liable, for repayment of the full
amount of such excess payment. Subject only to the subordination provided in the
following subsection (f), such Borrower further shall be subrogated to any and
all rights of the Administrative Agent and the Lenders against the remaining
Borrowers to the extent of such excess payment.
(d) To the extent that any Borrower would, but for the operation of
this Section 15.20 and by reason of its Obligations hereunder or its obligations
to other Subsidiaries under this Section 15.20, be rendered insolvent for any
purpose under Applicable Law, each of the Borrowers hereby agrees to indemnify
such Borrower in an amount at least equal to the amount necessary to prevent
such Borrower from having been rendered insolvent by reason of the incurring of
any such obligations.
111
(e) To the extent that any Borrower would, but for the operation of
this Section 15.20, be rendered insolvent under any Applicable Law by reason of
its incurring of obligations to any other Borrower under the foregoing
subsections (c) and (d) above, such Borrower shall, in turn, have rights of
contribution and indemnity, to the full extent provided in the foregoing
subsections (c) and (d) above, against the remaining Borrowers, such that all
Obligations of all of the Borrowers hereunder and under this Section 15.20 shall
be allocated in a manner such that no Borrower shall be rendered insolvent for
any purpose under Applicable Law by reason of its incurring of such obligations.
(f) The rights of any Borrower to contribution, subrogation and
indemnity under this Section 15.20 or under Applicable Law shall in all events
and all respects be subject and subordinate to the rights of the Administrative
Agent and the Lenders under this Agreement and subject to the prior full, final
and indefeasible payment to the Administrative Agent and the Lenders of all
Obligations and no such right may be exercised until all of such Obligations
have been fully, finally and indefeasibly paid and such payments are in no event
subject to avoidance under title 11 of the United States code or any other
Applicable Law.
[Signature pages to follow]
112
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
BORROWERS:
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
CHOICE ONE COMMUNICATIONS SERVICES INC.
US XCHANGE INC.
US XCHANGE OF INDIANA, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C.
US XCHANGE OF WISCONSIN, L.L.C.
US XCHANGE OF MICHIGAN, L.L.C.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President Finance
& Chief Financial Officer
for each of the entities set forth above
GUARANTOR:
CHOICE ONE COMMUNICATIONS INC.
By: /S/▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President Finance
& Chief Financial Officer
113
WACHOVIA INVESTORS, INC.,
as Administrative Agent, Collateral Agent and Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent and Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Manager - Operations
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent and Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
CIBC INC., as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Director
114
PNC BANK, NATIONAL ASSOCIATION,
By: /s/ ▇▇▇▇ ▇. Best
--------------------------------------------------------
Name: ▇▇▇▇ ▇. Best
Title: Vice President
THE BANK OF NEW YORK, as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
115
FORTIS CAPITAL CORP., as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
IBM CREDIT CORPORATION, as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager Special Handling
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Title: Vice President
116
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL PARTNERS IV, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
MSDW IV 892 INVESTORS, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL INVESTORS IV, L.P.
By: MSDW Capital Partners IV, LLC,
its general partner
By: MSDW Capital Partners IV, Inc.,
its Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director