Exhibit 10.77.3
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$100,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Among
INTERSTATE FIBERNET, INC.
And
NATIONSBANK OF TEXAS, N.A.
as Administrative Lender
and
LENDERS
Dated as of February 24, 1998
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$100,000,000
INTERSTATE FIBERNET, INC.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.01. Definitions ................................................... 2
1.02. Accounting and Other Terms .................................... 21
ARTICLE II. THE LOAN FACILITY
2.01. Revolving Loan ................................................ 21
2.02. Making Advances ............................................... 21
2.03. Evidence of Debt for Borrowed Money ........................... 23
2.04. Optional Prepayments .......................................... 23
2.05. Mandatory Prepayments ......................................... 24
2.06. Repayment ..................................................... 25
2.07. Interest ...................................................... 25
2.08. Default Interest .............................................. 26
2.09. Continuation and Conversion Elections ......................... 26
2.10. Fees .......................................................... 27
2.11. Reduction of Commitment ....................................... 28
2.12. Funding Losses ................................................ 29
2.13. Computations and Manner of Payments ........................... 29
2.14. Yield Protection; Changed Circumstances ....................... 30
2.15. Use of Proceeds ............................................... 33
2.16. Collateral and Collateral Call ................................ 33
2.17. Conditions Precedent to the Increase of the Commitment ........ 34
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit ................................. 36
3.02. Letters of Credit Fee ......................................... 36
3.03. Reimbursement Obligations ..................................... 37
3.04. Lenders' Obligations .......................................... 38
3.05. Administrative Lender's Obligations ........................... 39
ARTICLE IV. CONDITIONS PRECEDENT
i
4.01. Conditions Precedent to Closing ............................... 39
4.02. Conditions Precedent to the Initial Advance and the
Issuance of the Initial Letter of Credit ...................... 39
4.03. Conditions Precedent to All Revolving Advances and
Letters of Credit ............................................. 41
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties ................................ 42
5.02. Survival of Representations and Warranties .................... 49
ARTICLE VI. GENERAL COVENANTS
6.01. Preservation of Existence and Similar Matters ................. 49
6.02. Business; Compliance with Applicable Law ...................... 50
6.03. Maintenance of Properties ..................................... 50
6.04. Accounting Methods and Financial Records ...................... 50
6.05. Insurance ..................................................... 50
6.06. Payment of Taxes and Claims ................................... 50
6.07. Visits and Inspections ........................................ 51
6.08. Payment of Debt for Borrowed Money ............................ 51
6.09. Use of Proceeds ............................................... 51
6.10. Indemnity ..................................................... 51
6.11. Environmental Law Compliance .................................. 52
6.12. Acquisitions, Generally ....................................... 53
6.13. Subsidiary Designation ........................................ 53
6.14. Subsidiary Creation or Acquisition ............................ 53
ARTICLE VII. INFORMATION COVENANTS
7.01. Quarterly Financial Statements and Information ................ 54
7.02. Annual Financial Statements and Information ................... 54
7.03. Compliance Certificates ....................................... 54
7.04. Copies of Other Reports and Notices ........................... 54
7.05. Notice of Litigation, Default and Other Matters ............... 55
7.06. ERISA Reporting Requirements .................................. 56
ARTICLE VIII. NEGATIVE COVENANTS
8.01. Financial Covenants ........................................... 57
ii
8.02. Debt for Borrowed Money ....................................... 59
8.03. Liens ......................................................... 59
8.04. Investments ................................................... 60
8.05. Liquidation, Disposition or Acquisition of Assets,
Merger, New Subsidiaries ...................................... 60
8.06. Guaranties; Contingent Liabilities ............................ 62
8.07. Restricted Payments ........................................... 62
8.08. Affiliate Transactions ........................................ 64
8.09. Compliance with ERISA ......................................... 64
8.10. Capital Stock ................................................. 65
8.11. Sale and Leaseback ............................................ 65
8.12. Sale or Discount of Receivables ............................... 65
8.13. Limitation on Restrictive Agreements .......................... 65
8.14. Amendment of 1997 Senior Notes and 1998 Senior Notes .......... 65
8.15. The Interest Reserve Escrow Account ........................... 65
8.16. Name Changes .................................................. 66
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default ............................................. 66
9.02. Remedies upon Default ......................................... 69
9.03. Cumulative Rights ............................................. 70
9.04. Waivers ....................................................... 70
9.05. Performance by Administrative Lender or any Lender ............ 70
9.06. Expenditures .................................................. 71
9.07. Control ....................................................... 71
ARTICLE X. THE ADMINISTRATIVE LENDER
10.01. Authorization and Action ...................................... 71
10.02. Administrative Lender's Reliance, Etc ......................... 72
10.03. NationsBank of Texas, N.A. and Affiliates ..................... 72
10.04. Lender Credit Decision ........................................ 72
10.05. Indemnification by Lenders .................................... 72
10.06. Successor Administrative Lender ............................... 73
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers ........................................ 74
11.02. Notices ....................................................... 74
11.03. Parties in Interest ........................................... 76
iii
11.04. Assignments and Participations ................................ 77
11.05. Sharing of Payments ........................................... 78
11.06. Right of Set-off .............................................. 78
11.07. Costs, Expenses, and Taxes .................................... 78
11.08. Rate Provision ................................................ 79
11.09. Severability .................................................. 80
11.10. Exceptions to Covenants ....................................... 80
11.11. Counterparts .................................................. 80
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL ........................... 80
11.13. ENTIRE AGREEMENT .............................................. 81
11.14. Amendment, Restatement, Extension and Renewal ................. 81
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Table of Schedules and Exhibits
Schedules
Schedule 2.16(a) - Certain Excluded Assets from Collateral
Schedule 5.01(a) - Jurisdictions of Qualification, Ownership and
Capital Structure - Borrower
Schedule 5.01(f) - Non-Compliance with FCC or any applicable PUC
Schedule 5.01(h) - Existing Litigation
Schedule 5.01(r) - Description of Pledged Stock
Schedule 8.02 - Existing Debt and Liabilities
Schedule 8.03 - Existing Liens
Schedule 8.04 - Existing Investments
Schedule 8.08 - Permitted Affiliate Non-Market Transactions
Exhibits
Exhibit A - Form of Revolving Note
Exhibit B - Form of Increase Revolving Note
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Borrowing Notice
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Unlimited Guaranty
Exhibit H - Form of Pledge Agreement
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$100,000,000
INTERSTATE FIBERNET, INC.
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of February
24, 1998, among INTERSTATE FIBERNET, INC., a Delaware corporation (the
"Borrower"), the Lenders (as defined below) and NATIONSBANK OF TEXAS, N.A., as a
Lender and Administrative Lender.
BACKGROUND.
WHEREAS, Borrower, Administrative Lender and certain other lenders entered
into that certain Credit Agreement, dated as of September 17, 1997, as amended
by that certain First Amendment to Credit Agreement, dated as of October 20,
1997, and that certain Second Amendment to Credit Agreement, dated as of
February 2, 1998 (collectively referred to herein as the "Original Credit
Agreement"); and
WHEREAS, the Borrower and the Administrative Lender have agreed to amend
and restate the Original Credit Agreement to delete the term loan, provide for
an uncommitted potential increase of the revolving loan up to an additional
$50,000,000, to extend the maturity date, change certain financial covenants and
to make certain other changes; and
WHEREAS, the Borrower and the Administrative Lender hereby enter into a
First Amended and Restated Credit Agreement which provides for one revolving
loan facility in the amount of $50,000,000 (which such loan facility shall also
include a letter of credit availability of not more than $2,500,000), with the
uncommitted potential to increase up to an amount in the aggregate of
$100,000,000.
AGREEMENT.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have the
respective meanings indicated below (such meanings to be applicable equally to
both the singular and plural forms of such terms):
"Administrative Lender" means NationsBank of Texas, N.A., in its capacity
as Administrative Lender hereunder, or any successor Administrative Lender
appointed pursuant to Section 10.06 hereof.
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof, which shall include Revolving Advances.
"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled By or is Under Common Control with
another Person.
"Agreement" means this First Amended and Restated Credit Agreement, as
hereafter amended, modified, increased, extended, restated or supplemented from
time to time.
"Annualized Operating Cash Flow" means the product of (a) Operating Cash
Flow for the most recently completed six month period, times (b) two.
"Applicable Law" means (a) in respect of any Person, all provisions of Laws
of Tribunals applicable to such Person, and all orders and decrees of all courts
and arbitrators in proceedings or actions to which the Person in question is a
party and (b) in respect of contracts made or performed in the State of Texas,
"Applicable Law" also means the laws of the United States of America, including,
without limiting the foregoing, 12 USC Sections 85 and 86, as amended to the
date hereof and as the same may be amended at any time and from time to time
hereafter, and any other statute of the United States of America now or at any
time hereafter prescribing the maximum rates of interest on loans and extensions
of credit, and the laws of the State of Texas, including, without limitation,
Article 5069-1H, Title 79, Revised Civil Statutes of Texas, 1925, ("Art. 1H"),
as amended, if applicable, and if Art. 1H is not applicable, Article 5069-1D,
Title 79, Revised Civil Statutes of Texas, 1925, ("Art. 1D"), as amended, and
any other statute of the State of Texas now or at any time hereafter prescribing
maximum rates of interest on loans and extensions of credit; provided however,
that pursuant to Article 5069-15.10(b), Title 79, Revised Civil Statutes of
Texas, 1925, as amended, the Borrower agrees that the provisions of Chapter 15,
Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not apply to
Advances hereunder.
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"Applicable Margin" means, (a) with respect to LIBOR Advances, 2.125% per
annum, and (b) with respect to Base Advances, 1.125% per annum provided that, so
long as there exists no Event of Default, the Applicable Margin will be adjusted
as set forth in the last paragraph of this definition to the following per annum
percentages applicable in the following situations:
LIBOR Advance Base Advance
Applicability Percentage Percentage
------------- ---------- ----------
(i) If the Total 2.125% 1.125%
Leverage Ratio is
greater than or equal to
8.00 to 1.00
(ii) If the Total 1.875% 0.875%
Leverage Ratio is less
than 8.00 to 1.00 but
is greater than or equal to
7.00 to 1.00
(iii) If the Total 1.750% 0.750%
Leverage Ratio is less
than 7.00 to 1.00 but
is greater than or equal to
6.00 to 1.00
(iv) If the Total 1.625% 0.625%
Leverage Ratio is less
than 6.00 to 1.00
but is greater than or equal
to 5.00 to 1.00
(v) If the Total 1.375% 0.375%
Leverage Ratio is less
than 5.00 to 1.00
but is greater than or equal
to 4.50 to 1.00
(vi) If the Total 1.125% 0.125%
Leverage Ratio is less
than 4.50 to 1.00
but is greater than or equal
to 4.00 to 1.00
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(vii) If the Total 1.000% 0.000%
Leverage Ratio is less
than 4.00 to 1.00
The Applicable Margin payable by the Borrower shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a quarterly
basis according to the performance of the Parent, the Borrower and the
Subsidiaries of Borrower as tested by the Total Leverage Ratio. Except as set
forth in the following sentence, any such increase or reduction in the
Applicable Margin provided for herein shall be effective three Business Days
after receipt by Administrative Lender of the applicable financial statements
and corresponding Compliance Certificate. If financial statements and a
Compliance Certificate of the Borrower setting forth the Total Leverage Ratio
are not received by the Administrative Lender by the date required pursuant to
Section 7.01 or 7.02 hereof, the Applicable Margin shall be determined as if the
Total Leverage Ratio exceeds 8.00 to 1.00 until such time as such financial
statements and Compliance Certificate are received. For the final quarter of any
fiscal year of the Borrower, the Borrower may provide the unaudited financial
statements of the Borrower, subject only to year-end adjustments, for the
purpose of adjusting the Applicable Margin.
"Application" means any stand-by letter of credit application delivered to
Administrative Lender for or in connection with any stand-by Letter of Credit
pursuant to Article III hereof, in Administrative Lender's standard form for
stand-by letters of credit.
"Art. 1D" has the meaning specified in the definition herein of "Applicable
Law".
"Art. 1H" has the meaning specified in the definition herein of "Applicable
Law".
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee in accordance with the terms and conditions of
Section 11.04 hereof, and accepted by Administrative Lender, in the form of
Exhibit F hereto.
"Auditor" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P., or other independent certified
public accountants selected by the Borrower and acceptable to Administrative
Lender.
"Authorized Officer" means, with respect to the Parent, the Borrower and
its Subsidiaries respectively, any of the Chief Executive Officer, the
President, the Chief Financial Officer, the Vice President of Finance, the
General Counsel or the Treasurer of the Borrower.
4
"Bank Affiliate" means the holding company of any Lender, or any wholly
owned direct or indirect subsidiary of such holding company or of such Lender.
"Base Advance" means an Advance under the Revolving Loan bearing interest
at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a) the
Highest Lawful Rate, and (b) the sum of the Applicable Margin plus the higher of
(i) a fluctuating rate per annum as shall be in effect from time to time
announced or published by NationsBank of Texas, N.A. as its prime rate, and
which may not necessarily be the lowest interest rate charged by NationsBank of
Texas, N.A., and (ii) the Federal Funds Rate in effect at such time plus .50%.
"Borrowing" means a borrowing of the same Type made on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Business Day" means a day on which banks are open for the transaction of
business as required by this Agreement in Dallas, Texas and, with respect to any
LIBOR Advance, a domestic business day in London, England and a day on which
commercial banks are open for international business in London, England
(including dealings in United States dollar deposits), and as otherwise relevant
to the determination to be made or the action to be taken.
"Capital Expenditures" means capital expenditures, as defined in accordance
with GAAP.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation, each class of partnership interests
(including without limitation, general, limited and preference units) in any
Person that is a partnership, and each membership interest in any Person that is
a limited liability company.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
reference to any provision of the Code shall include all successor provisions
thereto.
"Collateral" has the meaning ascribed thereto in Section 2.16(a) hereof.
5
"Commitment" means, with respect to the Revolving Loan, $50,000,000 as
reduced pursuant to Section 2.11 hereof, and as increased pursuant to the terms
of Section 2.17 hereof.
"Commitment Fee" means the fee described in Section 2.10(b) hereof.
"Communications Act" means, collectively, the Communications Act of 1934,
as amended by the Telecommunications Act of 1996, and as further amended, and
the rules and regulations promulgated thereunder, as from time to time in
effect.
"Compliance Certificate" means a certificate of an Authorized Officer in
the form of Exhibit C hereto, (a) certifying that such individual has no
knowledge that a Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action being taken or proposed to be taken with
respect thereto, (b) setting forth detailed calculations with respect to the
covenants described in Section 8.01 hereof and (c) certifying to the appropriate
Applicable Margin.
"Consequential Loss" with respect to (a) the Borrower's payment of all or
any portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) subject to Administrative Lenders' prior consent, a LIBOR Advance made
on a date other than the date on which the Advance is to be made according to
Section 2.02(a) or Section 2.09 hereof to the extent such Advance is made on
such other date at the request of the Borrower, or (c) any of the circumstances
specified in Section 2.04 hereof on which a Consequential Loss may be incurred,
means any loss, cost or expense incurred by any Lender as a result of the timing
of the payment or Advance or in liquidating, redepositing, redeploying or
reinvesting the principal amount so paid or affected by the timing of the
Advance or the circumstances described in Section 2.04 hereof, which amount
shall be the sum of (i) the interest that, but for the payment or timing of
Advance, such Lender would have earned in respect of that principal amount,
reduced, if such Lender is able to redeposit, redeploy, or reinvest the
principal amount, by the interest earned by such Lender as a result of
redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim.
"Contingent Liability" means, as to any Person, any obligation or Guaranty,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or obligation of any other Person in any manner,
whether directly or indirectly, including without limitation any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase
6
Property or services for the purpose of assuring the owner of such Debt of its
payment, or (c) to maintain the solvency, working capital, equity, cash flow,
fixed charge or other coverage ratio, or any other financial condition of the
primary obligor so as to enable the primary obligor to pay any Debt or to comply
with any agreement relating to any Debt or obligation, but excluding endorsement
of checks, drafts and other instruments in the ordinary course of business,
provided that this definition of "Contingent Liability" shall not include
Guaranties by the Borrower or any Subsidiary of the Borrower of any obligations
of the Borrower or any wholly owned Subsidiary of the Borrower that has executed
an Unlimited Guaranty.
"Continue," "Continuation" and "Continued" each refer to the continuation
pursuant to Section 2.09 hereof of a LIBOR Advance from one Interest Period to
the next Interest Period.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event (a) any Person which beneficially owns
(i) 10% or more (in number of votes) of the securities having ordinary voting
power for the election of directors of a corporation shall be conclusively
presumed to control such corporation and (ii) 10% or more of the interest in
capital or profits of a partnership shall be conclusively presumed to control
such partnership, and (b) no Person shall be deemed to be an Affiliate of a
corporation solely by reason of his being an officer or director of such
corporation.
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
"Debt" means all obligations, contingent or otherwise, which in accordance
with GAAP are required to be classified on the balance sheet as liabilities, and
in any event including (without duplication) (a) Capital Leases, (b) Contingent
Liabilities that are required to be disclosed and quantified in notes to
consolidated financial statements in accordance with GAAP, (c) liabilities
secured by any Lien on any Property, regardless of whether such secured
liability is with or without recourse, and (d) installment payment non-compete
agreements.
"Debt for Borrowed Money" means, as to any Person, at any date, without
duplication, all Debt of such Person that constitutes (a) all obligations of
such Person for borrowed money, letters of credit (or applications for letters
of credit) or other similar instruments, (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or
services,
7
except trade accounts payable arising in the ordinary course of business, (d)
all obligations under Capital Leases, (e) installment payment non-compete
agreements, and (f) all Contingent Liabilities relating to obligations of
another Person (other than a wholly owned Subsidiary of the Borrower that has
executed an Unlimited Guaranty) of the type described in (a) through (e) above.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"Default" means any event specified in Section 9.01 hereof, whether or not
any requirement in connection with such event for the giving of notice, lapse of
time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment of
any distribution or dividend (other than a stock dividend) on, or the making of
any pro rata distribution, loan, advance, or investment to or in any holder of,
any partnership interest or shares of Capital Stock or other equity interest of
such Person (or the establishment of a sinking fund or otherwise setting aside
of funds for any such purpose), or (b) any purchase, redemption, or other
acquisition or retirement for value of any shares of partnership interest or
Capital Stock or other equity interest of such Person (or the establishment of a
sinking fund or otherwise setting aside of funds for any such purpose).
"Effective Date" means the date that each of the conditions set forth in
Section 4.02 hereof have been satisfied.
"Environmental Claim" means any written notice by any Tribunal alleging
liability for damage to the environment, or by any Person alleging liability for
personal injury (including sickness, disease or death), resulting from or based
upon (a) the presence or release (including sudden or non-sudden, accidental or
non-accidental, leaks or spills) of any Hazardous Material at, in or from
property, whether or not owned by the Borrower or any of its Subsidiaries, or
(b) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss.9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C ss.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss.1251 et seq.), the Clean Air Act (42 U.S.C.
ss.7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all analogous future federal, or present or future state or local, Laws.
8
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of the Borrower or any Obligor, or is under
common control with Borrower or any Obligor, within the meaning of Section
414(c) of the Code, and the regulations and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the meaning of Section
4043 of ERISA, unless the 30-day notice requirement with respect thereto has
been waived by the PBGC, (b) the issuance by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), (c) the withdrawal by the Parent, the Borrower, any
Subsidiary of the Borrower, or an ERISA Affiliate from a Multiple Employer Plan
during a Plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (d) the failure by the Parent, the Borrower, any
Subsidiary of the Borrower, or any ERISA Affiliate to make a payment to a Plan
required under Section 302 of ERISA, (e) the adoption of an amendment to a Plan
requiring the provision of security to such Plan, pursuant to Section 307 of
ERISA, or (f) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
that constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan.
"Event of Default" means any of the events specified in Section 9.01 of
this Agreement, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"FCC" means the Federal Communications Commission, or any governmental
agency succeeding to the functions thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of Dallas, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such date on such
transactions
9
received by Administrative Lender from three federal funds brokers of recognized
standing selected by it.
"Fee Letter" means that certain Fee Letter, dated September 17, 1997,
between the Borrower and the Administrative Lender, and all other fee letters
executed among the Borrower or any Lender[s], as such letters may be amended,
modified, substituted, replaced, or increased from time to time.
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board and other changes in accounting methods permitted by generally accepted
accounting principles.
"Guarantors" means the Parent and each Subsidiary of the Borrower existing
on the Closing Date or formed or acquired by the Borrower or any direct or
indirect Subsidiary of the Borrower from time to time thereafter.
"Guaranty" means a guaranty executed by any Person of the obligations of
another Person, or any agreement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes liable upon, the obligation of any other Person, or agrees
to maintain the net worth or working capital or other financial condition of any
other Person, or otherwise assures any creditor or such other Person against
loss, including, without limitation, any comfort letter, or take-or-pay contract
and shall include without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Hazardous Materials" means all materials subject to any Environmental Law,
including without limitation materials listed in 49 C.F.R. ss. 172.101,
Hazardous Substances, explosive or radioactive materials, hazardous or toxic
wastes or substances, petroleum or petroleum distillates, asbestos, or material
containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean Water
Act, 33 U.S.C. ss. 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. ss. 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, any Lender is then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, any Lender is
10
permitted to charge on the Obligations shall change after the date hereof, the
Highest Lawful Rate shall be automatically increased or decreased, as the case
may be, from time to time as of the effective time of each change in the Highest
Lawful Rate without notice to the Borrower. For purposes of determining the
Highest Lawful Rate under Applicable Law, the indicated rate ceiling shall be
(a) the weekly ceiling described in and computed in accordance with the
provisions of Art. 1H, or (b) either the annualized ceiling or quarterly ceiling
computed pursuant to Section .008 of Art. 1D; provided, however, that at any
time the weekly ceiling, the annualized ceiling or the quarterly ceiling, as
applicable, shall be less than 18% per annum or more than 24% per annum, the
provisions of Sections .009(a), .009(b) or .009(c) of said Art. 1D shall control
for purposes of such determination, as applicable.
"Income Tax Expense" means the aggregate Taxes accrued by the Parent, the
Borrower and its Subsidiaries for the relevant period of determination.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, on any date of determination for the
Parent, the Borrower and its consolidated Subsidiaries, the ratio of (i)
Annualized Operating Cash Flow to (b) Interest Expense actually paid during the
most recently completed twelve month period minus the sum of (i) one-time
prepayment penalties incurred as a result of the extinguishment on the Effective
Date of interest rate protection agreements of the Borrower in an amount not in
excess of $2,800,000 and (ii) any interest expense associated exclusively with
the ▇▇▇▇ to market on the Effective Date of interest rate protection agreements
of the Borrower in an amount not in excess of $2,800,000, but in each case
specifically excluding any interest paid out of the Interest Reserve Escrow
Account.
"Interest Expense" means, for the Parent, the Borrower and its Subsidiaries
on a consolidated basis, the gross interest expense for any period on Total
Debt, determined in accordance with GAAP, and including commitment fees
incurred, whether accrued or paid and all fees and expenses with respect to
letters of credit, minus the sum of (a) interest income for such period, (b)
interest actually paid-in-kind, (c) any one-time facility fees paid in
connection with this Agreement and in connection with any pre-existing Debt of
the Parent, the Borrower and its Subsidiaries and (d) an amount not to exceed
$9,500,000 in accrued interest paid by the Borrower to ITC Holding prior to
September 17, 1997.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date the Advance is made or continued as a LIBOR Advance and
ending one, two, three, six or, to the extent available as determined by
Administrative Lender, twelve months thereafter (as the Borrower shall select),
provided, however, that:
11
(a) the Borrower may not select any Interest Period that ends after
any principal repayment date unless, after giving effect to such selection,
the aggregate principal amount of LIBOR Advances having Interest Periods
that end on or prior to such principal repayment date, shall be at least
equal to the principal amount of Advances due and payable on and prior to
such date;
(b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided,
however, that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower and
any Lender.
"Interest Reserve Escrow Account" means the account of the Borrower (as
assignee of the Parent) pursuant to the terms of the 1997 Senior Notes, into
which a deposit was made from the proceeds of the 1997 Senior Notes to pay the
first three years of interest expense due and payable on the 1997 Senior Notes.
"Investment" means any acquisition of all or substantially all of the
assets of any Person, or any direct or indirect purchase or other acquisition
of, or a beneficial interest in, any Capital Stock or other securities of any
other Person, or any direct or indirect loan, advance, or capital contribution
to or investment in any other Person, including without limitation the
incurrence or sufferance of Debt or accounts receivable of any other Person that
are not current assets or do not arise from sales to that other Person in the
ordinary course of business.
"ITC Holding" means ITC Holding Company, Inc., a Delaware corporation.
"Law" means any constitution, statute, law, ordinance, regulation, rule,
order, writ, injunction, or decree of any Tribunal.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each transferee which hereafter becomes a party to this Agreement
pursuant to Section 11.04 hereof or
12
pursuant to an amendment to this Agreement, so long as each is owed any portion
of the Obligation or is obligated to make any Advance hereunder.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of each Lender, branch or affiliate
identified on each Lender's signature page hereto, and (b) subsequently, such
other office of each Lender, branch or affiliate as each Lender may designate to
the Borrower and Administrative Lender as the office from which the Advances of
each Lender will be made and maintained and for the account of which all
payments of principal and interest on the Advances and the Commitment Fee and
the Unused Fee will thereafter be made. Lenders may have more than one Lending
Office for the purpose of making Base Advances and LIBOR Advances.
"Letter of Credit Commitment" means, on any date of determination, an
amount equal to the lesser of (a) $2,500,000 and (b) the Commitment minus all
outstanding Advances under the Revolving Loan.
"Letters of Credit" means the irrevocable standby letters of credit issued
by Administrative Lender under and pursuant to Article III hereof, as each may
be amended, modified, substituted, increased, replaced, renewed or extended from
time to time.
"LIBOR Advance" means an Advance under the Revolving Loan bearing interest
at the LIBOR Rate.
"LIBOR Lending Office" means, with respect to each Lender, the office
designated as its "LIBOR Lending Office" on each Lender's signature page hereto,
or such other office of Lender or any of its affiliates hereafter designated by
notice to the Borrower and Administrative Lender.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefore, a rate per annum equal to the lesser of (a) the Highest Lawful Rate
and (b) the sum of (i) the Applicable Margin, plus (ii) the rate per annum
(rounded upwards, if necessary, to the nearest one-one hundredth (1/100th) of
one percent (1%)) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period. If for any reason such rate is not available, the term
"LIBOR Rate" shall mean, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest one-one
hundredth (1/100th) of one percent (1%)) appearing on Reuters Screen LIBO page
as the London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate
13
is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"License" means, as to the Parent, the Borrower, or any Subsidiary of the
Borrower, any license, permit, consent, certificate of need, authorization,
certification, accreditation, franchise, approval, or grant of rights by, or any
filing or registration with, any Tribunal or third Person (including without
limitation, the FCC or any applicable PUC) necessary for such Person to own,
build, maintain, or operate its business or Property.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind, including without limitation any agreement to give or not to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement or other similar form of public notice under the
Laws of any jurisdiction (except for the filing of a financing statement or
notice in connection with an (a) operating lease or (b) the true consignment of
goods to the Borrower or any Subsidiary of the Borrower as consignee).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted by or before any Tribunal or arbitrator, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
"Loan Papers" means this Agreement, the Notes, the Pledge Agreement, the
Unlimited Guaranties, the Fee Letter[s], financing statements, any Interest Rate
Protection Agreement and related documents entered into by the Borrower with any
Lender or any Bank Affiliate, all Letters of Credit, all Applications and all
other agreements between the Borrower or any Subsidiary of the Borrower and the
Administrative Lender related to any Letter of Credit, other fee letters,
Assignment and Acceptances, post-closing letters, all security agreements,
pledges, mortgages, deeds of trust, assignments, leasehold mortgages, leasehold
deeds of trust, collateral assignments and other agreements and documentation
relating to the Liens securing the Obligations, and all other documents,
instruments, agreements, or certificates executed or delivered from time to time
by any Person in connection with this Agreement or as security for the
Obligations hereunder, granting Collateral or otherwise, as each such agreement
may be amended, modified, substituted, replaced or extended from time to time.
"Majority Lenders" means any combination of Lenders having at least 51.00%
of the aggregate amount of outstanding Advances hereunder, provided, however,
that if no Advances are outstanding, such term means any combination of one or
more Lenders having Specified Percentages equal to at least 51.00%.
14
"Material Adverse Change" means any circumstance or event that is or could
reasonably be expected to (a) be material and adverse to the financial
condition, business operations, prospects, or Properties of the Parent, the
Borrower and its Subsidiaries on a consolidated basis, (b) materially and
adversely affect the validity or enforceability of any Loan Paper or (c) cause a
Default or Event of Default.
"Maturity Date" means the earlier of February 24, 2003, or such earlier
date on which the total amount of outstanding Obligations are due and payable
(including, without limitation, whether by acceleration, scheduled reduction of
the Commitment to zero, mandatory or voluntary commitment reduction of the
Commitment to zero, installment payments or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, a Lender is permitted to charge on the Obligations.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower, or
any ERISA Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Parent, the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and
at least one Person other than the Parent, the Borrower, any Subsidiary of the
Borrower, and any ERISA Affiliate, or (b) was so maintained and in respect of
which the Parent, the Borrower, any Subsidiary of the Borrower, or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Net Proceeds" means the gross cash proceeds received by the Parent, the
Borrower or any Subsidiary of the Borrower in connection with or as a result of
any asset sale not in the ordinary course of business, minus (so long as each of
the following are estimated in good faith by the management of the Borrower and
certified to the Lenders in reasonable detail by an Authorized Officer) (a)
actual taxes estimated in good faith by the Borrower's board of directors
incurred as a result of such sale (after giving effect to all tax benefits
available to the Borrower or such Subsidiary), and (b) reasonable and customary
transaction costs payable by the Parent, the Borrower or any Subsidiary of the
Borrower that are related to such sale and payable to a Person other than an
Affiliate of the Borrower and its Subsidiaries.
"1998 Senior Note Indenture" means the indenture dated as of March , 1998
between the Parent, as issuer, and United States Trust Company of New York, as
Trustee.
15
"1998 Senior Notes" means those certain senior notes due 2008 evidencing
unsecured indebtedness issued by the Parent in March of 1998, in accordance with
the terms of Section 8.02(c) hereof.
"1997 Senior Notes" means those certain $200,000,000 11% Senior Notes due
2007, evidencing unsecured indebtedness issued by the Parent as more fully
described in that certain Offering Memorandum of the Parent dated May 29, 1997,
as exchanged pursuant to that Offer to Exchange all outstanding 11% Senior Notes
due June 1, 2007 for registered 11% Senior Notes Due June 1, 2007.
"Note" means each Note of the Borrower evidencing Advances hereunder,
substantially in the form of Exhibit A hereto with respect to Advances made
under the Revolving Loan, and substantially in the form of Exhibit B hereto with
respect to Advances made under any increase of the Revolving Loan, together in
each case, with any extension, renewal or amendment thereof, or substitution
therefor.
"Obligations" means all present and future obligations, indebtedness and
liabilities, and all renewals and extensions of all or any part thereof, of the
Borrower and each Obligor to Lenders and Administrative Lender arising from, by
virtue of, or pursuant to this Agreement, any of the other Loan Papers and any
and all renewals and extensions thereof or any part thereof, or future
amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Lender for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and consents, and in connection with the
enforcement or the collection of all or any part thereof, and reasonable
attorneys' fees incurred by the Lenders in connection with the enforcement or
the collection of all or any part of the Obligations during the continuance of
an Event of Default, in each case whether such obligations, indebtedness and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several. Without limiting the generality of the foregoing, "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other Person (other than Administrative Lender or Lenders) to Administrative
Lender or Lenders under any Loan Paper, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower, any other Obligor
or any other Person (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
"Obligor" means (a) the Parent, (b) the Borrower, (c) each Subsidiary of
the Borrower, (d) each other Person liable for performance of any of the
Obligations and (e) each other Person the Property of which secures the
performance of any of the Obligations.
16
"Operating Cash Flow" means, for the Parent, the Borrower and the
Subsidiaries of the Borrower, for any period, the consolidated net income (loss)
for such period taken as a single accounting period, plus the sum of the
following amounts for such period to the extent included in the determination of
such consolidated net income or loss, without duplication: (a) depreciation
expense, (b) amortization expense and other non-cash charges reducing income,
(c) net Interest Expense, and (d) Income Tax Expense.
"Optional Redemption Rights" means the option of the Parent to redeem not
more than 35% of the outstanding 1997 Senior Notes for an amount not to exceed
111% of the principal amount being redeemed, as permitted only if in accordance
with the terms of Section 8.07(g) hereof.
"Original Credit Agreement" shall have the meaning ascribed thereto in the
BACKGROUND section of this Agreement.
"Parent" means ITC_DeltaCom, Inc., a Delaware corporation.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Acquisition" means acquisitions made by the Parent, the Borrower
or any Subsidiary of the Borrower in comparable telecommunications businesses to
that of the Borrower; provided that the Borrower has complied with all
applicable provisions of this Agreement.
"Permitted Liens" means, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations
hereunder;
(b) (i) Liens on real estate for real estate Taxes not yet delinquent,
(ii) Liens created by lease agreements, statute or common law to secure the
payments of rental amounts and other sums not yet due thereunder, (iii)
Liens on leasehold interests created by the lessor in favor of any
mortgagee of the leased premises, and (iv) Liens for Taxes, assessments,
governmental charges, levies or claims that are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves
shall have been set aside on such Person's books, but only so long as no
foreclosure, restraint, sale or similar proceedings have been commenced
with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen and other similar Liens incurred in the ordinary course of
business for sums not yet due or being contested
17
in good faith, if such reserve or appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person;
(f) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay
of execution upon any such appeal or proceeding for review shall have been
secured, provided that (i) such Person shall have established adequate
reserves for such judgments or awards, (ii) such judgments or awards shall
be fully insured and the insurer shall not have denied coverage, or (iii)
such judgments or awards shall have been bonded to the satisfaction of the
Majority Lenders; and
(g) Any Liens existing on September 17, 1997 which are described on
Schedule 8.03 hereto and not otherwise described elsewhere in the
definition of Permitted Liens, and Liens resulting from the refinancing of
the related Debt for Borrowed Money, provided that the Debt for Borrowed
Money secured thereby shall not be increased and the Liens shall not cover
additional assets of the Parent, the Borrower, or any such Subsidiary.
"Person" means an individual, partnership, joint venture, corporation,
limited liability company, trust, Tribunal, unincorporated organization, and
government, or any department, agency, or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" means the Pledge Agreement of even date herewith,
executed by the Parent, the Borrower and any Subsidiary of the Borrower,
granting a Lien on Capital Stock of the Borrower and each of the Borrower's
Subsidiaries as security for the Obligations, substantially in the form of
Exhibit H hereto, as such agreement may be amended, modified, renewed or
extended from time to time, and "Pledge Agreement" shall also include each such
pledge agreement pledging the Capital Stock of all other Subsidiaries of the
Borrower created or acquired from time to time, and all amendments,
modifications, renewals and extensions to any thereof.
"Pledged Stock" means all of the Capital Stock of the Borrower and of each
of the Subsidiaries of the Borrower.
18
"Prohibited Transaction" has the meaning specified in Section 4975 of the
Code or Section 406 of Title I of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned or hereafter acquired in fee simple or leased by
the Parent, the Borrower and its Subsidiaries.
"Pro Rata" means, as to any Lender, in accordance with its percentage of
the aggregate amount of outstanding Advances; provided, however, that if no
Advances are outstanding, such term means in accordance with such Lender's
Specified Percentage.
"PUC" means any state regulatory agency or body that exercises jurisdiction
over the rates or services or the ownership, construction or operation of any
Network Facility or long distance telecommunications systems or over Persons who
own, construct or operate a network facility or long distance telecommunications
systems, 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 such state.
"Quarterly Date" means the last Business Day of each March, June, September
and December during the term of this Agreement.
"Ratable" means, as to any Lender, in accordance with its Specified
Percentage.
"Refinancing Advance" means any Advance which is used to pay the principal
amount (or any portion thereof) of an Advance at the end of its Interest Period
and which, after giving effect to such application, does not result in an
increase in the aggregate amount of outstanding Advances.
"Release Date" means the date on which the Notes have been paid, all other
Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"Restricted Payments" means, for the Parent, the Borrower and the
Subsidiaries of the Borrower, (a) any direct or indirect Distribution, dividend
or other payment on account of any equity interest in, or shares of Capital
Stock or other securities of, the Parent, the Borrower and its Subsidiaries (or
the establishment of any sinking fund or otherwise the setting aside of any
funds with respect thereto); (b) any management, consulting or other similar
fees, or any interest thereon, payable by the Parent, the Borrower or any of its
Subsidiaries to any Affiliate of the Parent or the Borrower (or the
establishment of any sinking fund or otherwise the setting aside of any funds
with respect thereto), but specifically excluding any consulting fees payable by
the Parent, the Borrower or any Subsidiary of the Borrower to a Person that is
not an Affiliate of the Borrower or the Parent; (c) loans or advances to
employees and/or shareholders of the Parent,
19
the Borrower and its Subsidiaries, except advances to such employees for moving
and travel expenses in the ordinary course of business; and (d) payments of
principal and/or interest, or the setting aside of funds with respect thereto
(except for the Interest Reserve Escrow Account) on any Total Debt except the
Obligations.
"Restricted Subsidiary" means a Subsidiary which is a "Restricted
Subsidiary" within the meaning of the 1998 Senior Note Indenture as of the
Effective Date.
"Revolving Advance" means any Advance made under the Revolving Loan.
"Revolving Loan" means the loan made by a Lender pursuant to Section 2.01
of this Agreement.
"Rights" means rights, remedies, powers, and privileges.
"Senior Debt" means, on any date of determination, Total Debt on such date
minus the sum of (a) the aggregate outstanding principal amount of the 1997
Senior Notes and the 1998 Senior Notes, (b) to the extent included in Total
Debt, accrued and unpaid interest on the 1997 Senior Notes and the 1998 Senior
Notes, plus (c) cash balances of the Parent, the Borrower and the Subsidiaries
of the Borrower which in the aggregate exceed $5,000,000, provided that, for
purposes of this subsection (c), amounts in the Interest Reserve Escrow Account
may not be included in the calculation of "cash balances".
"Senior Leverage Ratio" means on any date of determination, the ratio of
Senior Debt on such date to Annualized Operating Cash Flow on such date.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Parent, accounted for more than 10% of the
consolidated revenues of the Parent and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Parent and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Parent for such fiscal year.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, other than a Multiple Employer Plan of the Parent or the
Borrower.
"Solvent" means, with respect to any Person, that on such date (a) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such
20
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
Property would constitute an unreasonably small capital.
"Special Counsel" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.,
Dallas, Texas, or such other individual or firm acting as special counsel to
Administrative Lender, as designated by Administrative Lender from time to time.
"Specified Percentage" means, as to any Lender, the percentage indicated
beside its name on the signature pages hereof, or as adjusted or specified (i)
in accordance with Section 2.17 hereof, (ii) in any Assignment and Acceptance or
(iii) in any amendment to this Agreement.
"Subsidiary" of any Person means any corporation, limited liability
company, partnership, joint venture, trust or estate of which (or in which) 50%
or more of:
(a) the outstanding Capital Stock having voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether at the time Capital Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency),
(b) the interest in the capital or profits of such partnership or
joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Taxes" means all taxes, assessments, imposts, fees, or other charges at
any time imposed by any Laws or Tribunal.
"Total Debt" means all Debt for Borrowed Money of the Parent, the Borrower
and the Subsidiaries of the Borrower, which would be shown on a consolidated
balance sheet in accordance with GAAP, including, without limitation, (a)
Capital Lease obligations, (b) Debt of any other Person secured by a Lien on the
property of the Borrower or any Subsidiary of the Borrower in an amount equal to
the lesser of (i) such Debt of such Person and (ii) the value of such pledged
property, (c) Contingent Liabilities, (d) Withdrawal Liability and (e) overdue
interest on any Debt for Borrowed Money (but not accrued interest that is not
overdue).
"Total Leverage Ratio" means, on any date of determination, the ratio of
(a) Total Debt on such date to (b) Annualized Operating Cash Flow, provided that
(i) the calculation of Total
21
Debt for purposes of the Total Leverage Ratio will be net of the sum of (A) any
cash balances in excess of $5,000,000 plus (B) the balance of the Interest
Reserve Escrow Account, and (ii) for purposes of this calculation, Operating
Cash Flow shall be calculated as if all assets acquired on any date during the
period of determination were acquired on the first day in such period of
determination, and all assets sold on any date during the period of
determination were sold on the first day in such period of determination.
"Tribunal" means any state, commonwealth, federal, foreign, territorial, or
other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of Texas on
the Closing Date.
"Unlimited Guaranty" means the Guaranty, executed in substantially similar
form by the Parent and by each Subsidiary of the Borrower, guarantying payment
and performance of the Obligations, substantially in the form of Exhibit G
attached hereto, as such agreement may be amended, modified, renewed or extended
from time to time, and each subsequent Guaranty in the form of Exhibit G hereto
executed by any newly acquired or created Subsidiary of the Borrower, as each
such agreement may be amended, modified, renewed or extended from time to time.
"Unused Fee" means the fee described in Section 2.10(b) hereof.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, unless otherwise expressly stated herein. References herein to one
gender shall be deemed to include all other genders. Except where the context
otherwise requires, (a) definitions imparting the singular shall include the
plural and vice versa and (b) all references to time are deemed to refer to
Dallas time.
22
ARTICLE II. THE LOAN FACILITY
2.01. Revolving Loan. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make Advances to the
Borrower on a Business Day during the period from the Effective Date to the
Maturity Date, in an aggregate principal amount not to exceed at any time
outstanding such Lender's Specified Percentage of the difference between the
Commitment and the sum of the undrawn face amount of all outstanding Letters of
Credit, plus reimbursement obligations under Article III hereof. Subject to the
terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow the Advances; provided, however, that at no time shall the sum of (i)
all outstanding Revolving Advances, plus (ii) the undrawn face amount of all
outstanding Letters of Credit, plus (iii) reimbursement obligations under
Article III hereof exceed the Commitment.
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written notice of the
Borrower, received by Administrative Lender not later than (i) 10:00 a.m. three
Business Days prior to the date of the proposed Borrowing, in the case of
Revolving Advances which are LIBOR Advances and (ii) 10:00 a.m. on the date of
such Borrowing, in the case of Revolving Advances which are Base Advances. Each
such notice of a Borrowing (a "Borrowing Notice") shall be by telecopy or
telephone, promptly confirmed by letter, in substantially the form of Exhibit D
hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be a Business
Day;
(ii) the Type of Advances of which the Borrowing is to be comprised;
(iii) the amount of such proposed Borrowing which, (A) shall not
exceed the unused portion of the Commitment less outstanding Letters of
Credit and (B) shall (I) in the case of a Borrowing of Base Advances under
the Revolving Loan, be in an amount of not less than $2,000,000 or an
integral multiple of $1,000,000 in excess thereof (or any lesser amount if
such amount is the remaining undrawn portion under the Commitment), and
(II) in the case of a Borrowing of LIBOR Advances under the Revolving Loan,
be in an amount of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof; and
(iv) if the Borrowing is to be comprised of LIBOR Advances, the
duration of the initial Interest Period applicable to such Advances.
23
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any Borrowing or Refinancing Advance, as applicable,
comprised of LIBOR Advances, such Interest Period shall be three months.
Administrative Lender shall promptly notify Lenders of each such notice. Each
Lender shall, before 1:00 p.m. on the date of each Advance under the Revolving
Loan hereunder (other than a Refinancing Advance), make available to
Administrative Lender, at its office at NationsBank Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, such Lender's Specified Percentage of the aggregate
Advances under the Revolving Loan to be made on that day in immediately
available funds.
(b) Unless any applicable condition specified in Article IV has not been
satisfied, Administrative Lender will make the funds promptly available to the
Borrower (other than with respect to a Refinancing Advance) by either (i) wiring
such amounts pursuant to any wiring instructions, or (ii) depositing such amount
in the account of the Borrower at the Administrative Lender, in each case as
specified by the Borrower to the Administrative Lender in writing.
(c) After giving effect to any Borrowing, (i) there shall not be more than
seven different Interest Periods in effect and (ii) the aggregate principal
amount of outstanding Advances under the Revolving Loan, Letters of Credit, and
reimbursement obligations under Article III shall not exceed the Commitment.
(d) No Interest Period applicable to any Advance shall extend beyond the
Maturity Date.
(e) Unless a Lender shall have notified Administrative Lender prior to the
date of any Revolving Advance that it will not make available its Specified
Percentage of any Revolving Advance, Administrative Lender may assume that such
Lender has made the appropriate amount available in accordance with Section
2.02(a) hereof, and Administrative Lender may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If and to the extent any
Lender shall not have made such amount available to Administrative Lender, such
Lender and the Borrower severally agree to repay to Administrative Lender
immediately on demand such corresponding amount together with interest thereon,
from the date such amount is made available to the Borrower until the date such
amount is repaid to Administrative Lender, at (i) in the case of the Borrower,
the Base Rate, and (ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Specified Percentage of
any Revolving Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Specified Percentage of any Revolving
Advance. In no event, however, shall any Lender be responsible for the failure
of any other Lender to make available any portion of any Revolving Advance.
24
(g) The Borrower shall indemnify each Lender against any Consequential Loss
incurred by each Lender as a result of (i) any failure to fulfill, on or before
the date specified for the Advance, the conditions to the Advance set forth
herein (including a Refinancing Advance) or (ii) the Borrower's requesting that
an Advance (including a Refinancing Advance) not be made on the date specified
in the Borrowing Notice.
2.03. Evidence of Debt for Borrowed Money.
(a) The Advances made by each Lender under the Revolving Loan shall be
evidenced by a Note in the amount of such Lender's Specified Percentage of the
Commitment in effect on the Effective Date, or the amount of any increase in the
Commitment as determined in accordance with the terms of Section 2.17 hereof.
(b) Administrative Lender's and each Lender's records shall be presumptive
evidence as to amounts owed Administrative Lender and such Lender under the
Notes and this Agreement.
2.04. Optional Prepayments.
(a) The Borrower may, upon at least two Business Days prior written notice
to Administrative Lender stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of any
Advances in whole or in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid without premium or penalty other than
any Consequential Loss; provided, however, that in the case of a prepayment of a
Base Advance, the notice of prepayment may be given by telephone by 10:00 a.m.
on the date of prepayment. Each partial prepayment shall, in the case of Base
Advances under the Revolving Loan, be in an aggregate principal amount of not
less than $100,000 or a larger integral multiple of $50,000 in excess thereof
and, in the case of LIBOR Advances under the Revolving Loan, be in an aggregate
principal amount of not less than $500,000 or a larger integral multiple of
$100,000 in excess thereof. If any notice of prepayment is given, the principal
amount stated therein, together with accrued interest on the amount prepaid and
the amount, if any, due under Section 2.12 and Section 2.14 hereof, shall be due
and payable on the date specified in such notice unless the Borrower revokes its
notice, provided that, if the Borrower revokes its notice of prepayment prior to
such date specified, the Borrower shall reimburse the Administrative Lender for
the account of all Lenders for all Consequential Losses suffered by each Lender
as a result of the Borrower's failure to prepay. A certificate of each Lender
claiming compensation under this Section 2.04(a), setting forth in reasonable
detail the calculation of the additional amount or amounts to be paid to it
hereunder shall be presumptive evidence of the validity of such claim.
25
(b) No prepayments of Advances made solely pursuant to this Section 2.04
and applied to the Revolving Loan shall cause the Commitment to be reduced. All
prepayments made pursuant to this Section 2.04 shall be first applied to Base
Advances then to LIBOR Advances, all without premium or penalty, except the
Borrower must pay together with any such prepayments, any Consequential Losses.
2.05. Mandatory Prepayments.
(a) Asset Sales. To the extent that the Parent, the Borrower or any of its
Subsidiaries consummates any sale of any asset or any of its Properties other
than in the ordinary course of business, then the Parent, the Borrower and its
Subsidiaries shall immediately use 100% of the Net Proceeds of any such
transaction to repay the Obligations under the Revolving Loan; provided,
however, so long as there exists no Default or Event of Default, none of the
Parent, the Borrower or any of its Subsidiaries shall be required to use the
first $5,000,000 in the aggregate over the term of this Agreement from all such
asset sales collectively to prepay the Obligations.
(b) Public or Private Issuance of Equity. To the extent that the Parent,
the Borrower or any of its Subsidiaries consummates any public or private
issuance of equity (this provision in and of itself not constituting permission
to do so), then the Parent, the Borrower and its Subsidiaries shall, (i) to the
extent that any net proceeds from any such transaction are received within 12
months after September 17, 1997 and such net proceeds are in excess of
$125,000,000, immediately use 50% of such net proceeds in excess of $125,000,000
to repay the Obligations under the Revolving Loan, or (ii) to the extent that
clause (i) above is not applicable but the net proceeds from any such
transaction are in excess of $50,000,000, immediately use 50% of such net
proceeds in excess of $50,000,000 to repay the Obligations under the Revolving
Loan.
(c) Public or Private Issuance of Debt. To the extent that the Parent, the
Borrower or any of its Subsidiaries consummates any public or private issuance
of Debt (this provision in and of itself not constituting permission to do so),
then the Parent, the Borrower and its Subsidiaries shall immediately use 50% of
the net proceeds of any such transaction in excess of $210,000,000 (excluding
the 1997 Senior Notes but including the 1998 Senior Notes) to repay the
Obligations under the Revolving Loan.
(d) Mandatory Prepayments, Generally. Any prepayments made pursuant to this
Section 2.05 shall be first applied to Base Advances then to LIBOR Advances, all
without premium or penalty, except the Borrower must pay together with any such
prepayments, any Consequential Losses.
26
2.06. Repayment.
(a) LIBOR Advances. The principal amount of each LIBOR Advance is due and
payable on the last day of the applicable Interest Period, which principal
payment may be made by means of a Refinancing Advance in accordance with the
terms of Section 2.09 hereof (and subject to the other provisions of this
Agreement).
(b) Commitment Reduction. On the date of a reduction of the Commitment
pursuant to Section 2.11 hereof, the aggregate amount of outstanding Revolving
Advances in excess of such Commitment as reduced shall be immediately due and
payable (which such principal repayments may not be made by means of Refinancing
Advances).
(c) Repayments, Generally. All outstanding Advances and other Obligations
shall be due and payable in full on the Maturity Date. Any repayments made
pursuant to this Section shall be without premium or penalty, except the
Borrower must pay together with any such prepayments, any Consequential Losses.
Advances shall be applied to Base Advances first, and then to LIBOR Advances.
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof, the
Borrower shall pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal shall be paid in full, at either
the Base Rate or the LIBOR Rate, as set forth in subsection (i) or (ii) below,
as selected by the Borrower in accordance with Section 2.02 hereof and as
follows:
(i) Base Advances. Base Advances shall bear interest at a rate per
annum equal to the Base Rate as in effect from time to time. If the amount
of interest payable in respect of any interest computation period is
reduced to the Highest Lawful Rate and the amount of interest payable in
respect of any subsequent interest computation period would be less than
the Maximum Amount, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to
the Maximum Amount; provided that at no time shall the aggregate amount by
which interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to this
sentence.
(ii) LIBOR Advances. LIBOR Advances shall bear interest at the rate
per annum equal to the LIBOR Rate applicable to such Advance.
(iii) Payment Dates. Accrued and unpaid interest on Base Advances
shall be paid quarterly in arrears on each Quarterly Date and on the
Maturity Date. Accrued and unpaid interest in respect of each LIBOR Advance
shall be paid on the last day of the appropriate Interest Period, on the
Maturity Date and on the date of any prepayment or
27
repayment of such Advance; provided, however, that if any Interest Period
for a LIBOR Advance exceeds three months, interest shall also be paid on
the date which falls three months after the beginning of such Interest
Period.
2.08. Default Interest. During the continuation of any Event of Default,
the Borrower shall pay, on demand, interest (after as well as before judgment to
the extent permitted by Law) on the principal amount of all Advances outstanding
and on all other Obligations due and unpaid hereunder at a per annum rate equal
to the lesser of the (a) the Highest Lawful Rate and (b) the Base Rate plus 2%.
LIBOR Advances shall not be available for selection by the Borrower during the
continuance of an Event of Default.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative
Lender and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion of
outstanding Revolving Advances which are Base Advances (in an aggregate
amount not less than $500,000 or an integral multiple of $100,000 in excess
thereof) into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period therefor, all
or any portion of outstanding Revolving Advances which are LIBOR Advances
comprised in the same Borrowing (in an aggregate amount not less than
$100,000 or an integral multiple of $50,000 in excess thereof) into Base
Advances; or
(iii) elect to continue, at the end of any Interest Period therefor,
any Revolving Advances which are LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$500,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Advances at the end of each respective Interest Period.
(b) The Borrower shall deliver a notice of conversion or continuation (a
"Conversion or Continuation Notice"), in substantially the form of Exhibit E
hereto, to Administrative Lender not later than (i) 10:00 a.m. three Business
Days prior to the proposed date of conversion or continuation, if the Revolving
Advances (or any portion of either thereof) are to be converted into or
continued as LIBOR Advances; and (ii) 10:00 a.m. on the Business Day of the
proposed
28
conversion, if the Revolving Advances (or any portion thereof) are to be
converted into Base Advances.
Each such Conversion or Continuation Notice shall be by telecopy or
telephone, promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Revolving Advances to be converted or
continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, the Borrower shall have failed to select a new Interest Period to be
applicable to such LIBOR Advances or if an Event of Default shall then have
occurred and be continuing, the Borrower shall be deemed to have elected to
convert such LIBOR Advances into Base Advances effective as of the expiration
date of such current Interest Period.
(d) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Advances, there shall not
be outstanding Advances with more than seven different Interest Periods.
2.10. Fees.
(a) Facility Fee. Subject to Section 11.08 hereof, the Borrower shall pay
to Administrative Lender (for the sole account of Administrative Lender) an
origination and facility fee as set forth in any Fee Letters.
(b) Commitment Fee. Subject to Section 11.08 hereof, the Borrower shall pay
to Administrative Lender for the Ratable account of Lenders a commitment fee
(the "Commitment Fee") on the average daily amount of the difference between (i)
the Commitment and (ii) the sum of (A) all outstanding Revolving Advances and
(B) the face amount of all outstanding Letters of Credit, payable in arrears on
each Quarterly Date commencing with the first Quarterly Date after the Closing
Date, and continuing until the Maturity Date, accordance with the per annum rate
described in the following situations:
29
Applicability Percentage
------------- ----------
(I) If the Total 0.500%
Leverage Ratio is
greater than or equal to
7.00 to 1.00
(II) If the Total 0.375%
Leverage Ratio is less
than 7.00 to 1.00 but
is greater than or equal to
6.00 to 1.00
(III) If the Total 0.300%
Leverage Ratio is less
than 6.00 to 1.00
(c) Other Fees. Borrower shall pay to Administrative Lender and the Lenders
such other fees as set forth in any Fee Letter addressed to the Administrative
Lender or any Lender.
2.11. Reduction of Commitment.
(a) Mandatory Termination of the Commitment. The Commitment shall be
reduced to zero and terminate on the Maturity Date.
(b) Mandatory Reduction Due to Asset Sales. The Commitment shall be reduced
immediately and automatically in an amount equal to any amount required by
Section 2.05(a) hereof to prepay the Revolving Loan as a result of any asset
sales.
(c) Mandatory Reduction Due to Issuances of Public or Private Equity. The
Commitment shall be reduced immediately and automatically in an amount equal to
any amount required by Section 2.05(b) hereof to prepay outstanding Advances
under the Revolving Loan (regardless of whether there are actually any
outstanding Revolving Advances) as a result of any issuances of public or
private equity.
(d) Mandatory Reduction Due to Issuances of Public or Private Debt. The
Commitment shall be reduced immediately and automatically in an amount equal to
any amount required by Section 2.05(c) hereof to prepay outstanding Advances
under the Revolving Loan (regardless of whether there are actually any
outstanding Revolving Advances) as a result of any issuances of public or
private Debt.
(e) Voluntary Commitment Reductions. The Borrower may from time to time,
upon notice to Administrative Lender not later than 1:00 p.m., three Business
Days in advance,
30
terminate in whole or reduce in part the Commitment, as designated by the
Borrower; provided, however, that the Borrower shall pay the accrued interest
and the applicable accrued Commitment Fee on the amount of such reduction and
all amounts due, and any partial reduction shall be in an aggregate amount which
is an integral multiple of $5,000,000.
(f) Commitment Reductions, Generally. To the extent outstanding Revolving
Advances exceed the Commitment after any reduction thereof, the Borrower shall
repay, on the date of such reduction, any such excess amount and all accrued
interest thereon, the applicable Commitment Fee on the amount of such reduction
and all amounts due. Once reduced or terminated, the Commitment may not be
increased or reinstated. No reduction of the Commitment, either voluntary or
mandatory under Sections 2.11(b), 2.11(c), 2.11(d) or 2.11(e) hereof, shall
relieve or alter the mandatory reduction and termination of the Commitment
pursuant to Section 2.11(a) hereof.
2.12. Funding Losses. The Borrower may prepay the outstanding principal
balance of any Advance, in full at any time or in part from time to time in
accordance with the terms of Section 2.04 hereof, provided, that as a condition
precedent to the Borrower's right to make, and any Lender's obligation to
accept, any such prepayment, each such prepayment shall be in the amount of 100%
of the principal amount to be prepaid, plus accrued unpaid interest thereon to
the date of prepayment, plus any other sums which have become due to
Administrative Lender and Lenders under the Loan Papers on or before the
prepayment date but have not been paid, plus (subject to Section 11.08 hereof)
any Consequential Loss.
The Borrower agrees that each Lender is not obligated to actually reinvest
the amount prepaid in any specific obligation as a condition to receiving any
Consequential Loss, or otherwise.
2.13. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other Loan
Papers not later than 1:00 p.m. on the day when due in same day funds (by wire
transfer or otherwise) to Administrative Lender, for the account of Lenders
unless otherwise specifically provided herein, at Administrative Lender's office
at NationsBank Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, for further credit
to the account of Interstate FiberNet, Inc. No later than the end of each day
when each payment hereunder is made, the Borrower shall notify Loan Operations
at (▇▇▇) ▇▇▇-▇▇▇▇ or such other Person as Administrative Lender may from time to
time specify.
(b) Unless Administrative Lender shall have received notice from the
Borrower prior to the date on which any payment is due hereunder that the
Borrower will not make payment in full, Administrative Lender may assume that
such payment is so made on such date and may, in
31
reliance upon such assumption, make distributions to Lenders. If and to the
extent the Borrower shall not have made such payment in full, each Lender shall
repay to Administrative Lender forthwith on demand the applicable amount
distributed, together with interest thereon at the Federal Funds Rate, from the
date of distribution until the date of repayment. The Borrower hereby authorizes
each Lender, if and to the extent payment is not made when due hereunder, to
charge the amount so due against any account of the Borrower with such Lender.
(c) Subject to Section 11.08 hereof, interest on LIBOR Advances under the
Loan Papers shall be calculated on the basis of actual days elapsed but computed
as if each year consisted of 360 days. Subject to Section 11.08 hereof, interest
on Base Advances, the Commitment Fee, the Unused Fee and other amounts due under
the Loan Papers shall be calculated on the basis of actual days elapsed but
computed as if each year consisted of 365 or 366 days, as applicable. Such
computations shall be made including the first day but excluding the last day
occurring in the period for which such interest, payment, Commitment Fee or
Unused Fee is payable. Each determination by Administrative Lender or a Lender
of an interest rate, fee or commission hereunder shall be presumptive evidence
of the validity of such claim. All payments under the Loan Papers shall be made
in United States dollars, and without setoff, counterclaim, or other defense.
(d) Whenever any payment to be made hereunder or under any other Loan
Papers shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in the computation of interest or fees, if applicable;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Reference to any particular index or reference rate for determining any
applicable interest rate under this Agreement is for purposes of calculating the
interest due and is not intended as and shall not be construed as requiring any
Lender to actually obtain funds for any Advance at any particular index or
reference rate.
32
2.14. Yield Protection; Changed Circumstances.
(a) If any Lender determines that either (i) the adoption of any Applicable
Law, rule, regulation or guideline regarding capital adequacy and applicable to
commercial banks or financial institutions generally or any change therein, or
any change, after the date hereof, in the interpretation or administration
thereof by any Tribunal, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) compliance by any Lender (or
Lending Office of any Lender) with any request or directive applicable to
commercial banks or financial institutions generally regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency has the effect of reducing the rate of return on such Lender's
capital as a consequence of its obligations hereunder to a level below that
which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time, within fifteen days after demand by such Lender, the
Borrower shall pay to such Lender such additional amount or amounts as will
adequately compensate such Lender for such reduction. Each Lender will notify
the Borrower of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Section 2.14(a) as promptly
as practicable after such Lender obtains actual knowledge of such event;
provided, no Lender shall be liable for its failure or the failure of any other
Lender to provide such notification. A certificate of such Lender claiming
compensation under this Section 2.14(a), setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder shall
be presumptive evidence of the validity of such claim. If such Lender demands
compensation under this Section 2.14(a), the Borrower may at any time, on at
least five Business Days' prior notice to such Lender (i) repay in full the then
outstanding principal amount of LIBOR Advances, of such Lender, together with
accrued interest thereon, or (ii) convert the LIBOR Advances to Base Advances in
accordance with the provisions of this Agreement; provided, however, that the
Borrower shall be liable for the Consequential Loss arising pursuant to those
actions.
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes, or its obligation to make a LIBOR Advance, or imposes on any Lender
any other condition affecting a Letter of Credit; and the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining its
Letter of Credit, LIBOR Advances, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under the Notes, the Letters
of Credit or reimbursement obligations by an amount deemed by such Lender, to be
material, then, within five days after demand by such Lender, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for
33
such increased cost or reduction. Each Lender will (i) notify the Borrower of
any event occurring after the date of this Agreement that entitles such Lender
to compensation pursuant to this Section 2.14(b), as promptly as practicable
after such Lender obtains actual knowledge of the event; provided, no Lender
shall be liable for its failure or the failure of any other Lender to provide
such notification and (ii) use good faith and reasonable efforts to designate a
different Lending Office for LIBOR Advances, of such Lender if the designation
will avoid the need for, or reduce the amount of, the compensation and will not,
in the sole opinion of such Lender, be disadvantageous to such Lender. A
certificate of such Lender claiming compensation under this Section 2.14(b),
setting forth in reasonable detail the computation of the additional amount or
amounts to be paid to it hereunder shall be presumptive evidence of the validity
of such claim. If such Lender demands compensation under this Section 2.14(b),
the Borrower may at any time, on at least five Business Days' prior notice to
such Lender (i) repay in full the then outstanding principal amount of LIBOR
Advances, of such Lender, together with accrued interest thereon, or (ii)
convert the LIBOR Advances to Base Advances in accordance with the provisions of
this Agreement; provided, however, that the Borrower shall be liable for the
Consequential Loss arising pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
issue or maintain Letters of Credit, make LIBOR Advances or to continue to fund
or maintain LIBOR Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower, (i) each LIBOR Advance will
automatically, upon such demand, convert into a Base Advance, (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Lender and the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist, and (iii) the obligation of such Lender to make or
maintain Letters of Credit shall be suspended until such Lender notifies
Administrative Lender and the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or Event
of Default, (i) each LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of each Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended.
(e) If any Lender notifies Administrative Lender that the LIBOR Rate for
any Interest Period for any LIBOR Advances will not adequately reflect the cost
to such Lender of making, funding or maintaining LIBOR Advances for such
Interest Period, Administrative Lender shall promptly so notify the Borrower,
whereupon (i) each such LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be
34
suspended until such Lender notifies Administrative Lender that such Lender has
determined that the circumstances causing such suspension no longer exist and
Administrative Lender notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.14 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.14.
(g) The obligations of the Borrower under this Section 2.14 shall survive
any termination of this Agreement, provided that, in no event shall the Borrower
be required to make a payment under this Section 2.14 with respect to any event
of which the Lender making such claim had knowledge more than 12 months prior to
demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.14 shall be
presumptively correct. Any certificate delivered to the Borrower by a Lender
pursuant to this Section 2.14 shall include in reasonable detail the basis for
such Lender's demand for additional compensation and a certification that the
claim for compensation is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender.
(i) Notwithstanding any other provision of this Agreement, no Lender not
organized under the Laws of the United States or any State (or which has a Bank
Affiliate not organized under the Laws of the United States or any State) shall
be entitled to compensation pursuant to this Section 2.14 with respect to any
amount which would otherwise be due under this Section 2.14 but which is the
result of an act of a Tribunal of the country in which such Lender or Bank
Affiliate is organized.
2.15. Use of Proceeds. The proceeds of the Advances shall be available (and
the Borrower shall use such proceeds) solely (a) on the Effective Date, to
refinance existing indebtedness of the Borrower, (b) for Permitted Acquisitions,
(c) for Capital Expenditures permitted under the terms of this Agreement, (d)
for working capital and (e) for other lawful corporate purposes.
2.16. Collateral and Collateral Call.
(a) Collateral. Payment of the Obligations will be secured by (i) a first
perfected security interest in 100% of the Capital Stock of the Borrower and
each of the Subsidiaries of the Borrower, (ii) Guaranties of the Obligations by
each Guarantor, (iii) a first perfected security interest (except for Permitted
Liens) in all tangible and intangible assets and Properties of the
35
Borrower and each of the Subsidiaries of the Borrower that can be perfected by
filing a UCC-1 financing statement centrally in the States of Georgia, Florida,
Alabama, Mississippi, Louisiana, Texas, North Carolina and South Carolina, (iv)
certain licenses (recognizing that in connection with the exercise by
Administrative Lender of its rights hereunder with respect to such licenses that
it may be necessary to obtain the prior consent or approval of Tribunals and
other Persons to a transfer or assignment, including, without limitation, the
approval of the FCC), contract rights with respect to contracts between the
Borrower and (A) the Southern Development and Investment Group, Inc., (B) the
Kansas City Southern Railway Company, and (C) the Illinois Central Railroad
Company, and (v) certain real estate switch sites (collectively, together with
all other Properties or assets of the Borrower, Subsidiaries and other Persons
securing the Obligations from time to time, the "Collateral", but "Collateral"
shall specifically exclude (unless any Lien is granted in accordance with the
terms of Section 2.16(b) below), (A) amounts deposited in the Interest Reserve
Escrow Account in accordance with the terms of Section 8.15 hereof, (B) motor
vehicles, patents, trademarks and fixtures and real property (both leasehold and
fee owned, but none of which is a switch location) and (C) certain agreed to
licenses, contract rights and agreements which require consent from a third
party (such licenses, contract rights and agreements being described on Schedule
2.16(a) hereto)). The Borrower agrees that it will, and will cause its
Subsidiaries to execute and deliver, or cause to be executed and delivered, such
documents as the Administrative Lender may from time to time reasonably request
to create and perfect a first Lien (subject to Permitted Liens) for the benefit
of the Administrative Lender and the Lenders in the Collateral. The Borrower
agrees to use its best efforts to obtain a landlord's consent to assignment and
leasehold mortgage in connection with switch sites located in Columbia, South
Carolina and Arab, Alabama.
(b) Collateral Call. The Borrower agrees upon the creation, formation or
acquisition of any direct or indirect Subsidiary of the Borrower, to immediately
pledge 100% of the Capital Stock of any such Subsidiary to secure the
Obligations, pursuant to a pledge agreement substantially in the form of Exhibit
H hereto, and to promptly deliver to the Administrative Lender all certificates
or other documentation evidencing 100% of such Capital Stock and, if such
Capital Stock is stock of a corporation, together with stock powers executed in
blank. The Borrower agrees, upon the acquisition of any assets (whether through
Capital Stock or otherwise) to immediately pledge/mortgage or grant a first
priority security interest in (subject to Permitted Liens), as applicable, such
assets of the type as are included in the definition of Collateral as set forth
above to the Administrative Lender on behalf of the Lenders to secure the
Obligations (and pursuant to agreements similar to those executed in connection
with the Original Credit Agreement). The Borrower agrees to use its best efforts
to (and cause its Subsidiaries to use their best efforts to), upon the request
of the Majority Lenders, grant the Administrative Lender on behalf of Lenders a
first priority Lien or security interest (subject to Permitted Liens) in any
asset of the Borrower or any of its Subsidiaries having a fair market value in
excess of $1,000,000 and not constituting motor vehicles.
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2.17. Conditions Precedent to the Increase of the Commitment.
Upon written request by the Borrower to Lenders of its choice (including,
as set forth below, other lenders not initially party to this Agreement or the
other Loan Papers), and only so long as each Lender determines in its sole
discretion in writing to make such increase available to the Borrower, the
Commitment shall, subject to the further terms and conditions set forth below,
increase to a maximum of $100,000,000 in the manner set forth below:
(a) On any date of proposed increase, the representations and
warranties contained in Article V hereof are true and correct on such date,
as though made on and as of such date, except to the extent expressly made
only as of a prior date; and
(b) On any date of proposed increase, no Default or Event of Default
shall exist on any such date, and no Default or Event of Default would
result from such increase in the Commitment; and
(c) On any date of proposed increase, there shall have occurred no
material adverse change in the Borrower's business, assets or financial
condition since December 31, 1997; and
(d) On any date of proposed increase, the sum of (i) all Advances
outstanding, plus (ii) the aggregate undrawn face amount of all outstanding
Letters of Credit (after giving effect to any proposed Letter of Credit to
be made on such date), plus (iii) (without duplication) the sum of the
aggregate reimbursement obligations, shall not exceed the Commitment; and
(e) Upon satisfaction of each of the conditions precedent in this
Section 2.17, the Borrower shall be entitled to increase the Commitment not
more than twice, in each case by not less than $10,000,000 (or $5,000,000
multiples thereof). Each Lender specified by the Borrower shall have
received not less than thirty days' prior written notice from the Borrower
requesting such Commitment increase. Each such Lender electing to
participate in such Commitment increase shall commit to an amount not less
than $5,000,000, but shall accept any allocation amount designated by the
Borrower and the Administrative Lender that is equal to or less than its
proposed portion of the Commitment increase; and
(f) Notwithstanding anything herein or in any other Loan Paper to the
contrary, the Borrower and the Administrative Lender may agree to add other
creditors in connection with any such proposed increase; and
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(g) Each of the two proposed increases shall be in a minimum amount of
$10,000,000 and $5,000,000 multiples thereof; and
(h) The Administrative Lender shall have received a pro-forma
Compliance Certificate in form and substance acceptable to the Lenders and
demonstrating compliance with the terms of this Agreement and the Loan
Papers for one full year after the date of such proposed increase; and
(i) The Administrative Lender shall have received financial
projections in form and substance acceptable to the Lenders and
demonstrating compliance with the financial covenants set forth in Section
8.01 hereof throughout the term of this Agreement; and
(j) The Administrative Lender shall have received a certificate from
the Borrower to the effect that (i) such increase has received all required
regulatory approvals, if necessary, and is in compliance with all
applicable Laws, and (ii) no other approvals or consents from any Person
are required by any such Person except to the extent they have been
received; and
(k) The Administrative Lender and each Lender (including any new
Lenders party hereto) shall have received new promissory notes evidencing
the increase in the Commitment, and the Borrower and each new Lender agrees
to execute any and all such documents deemed necessary by the
Administrative Lender in order to effectuate this Section 2.17 (whether
UCC-1s, new documentation relating to any Collateral, Guaranty or
otherwise); and
(l) On the date of increase, the Administrative Lender shall deliver
to each Lender evidence of new Specified Percentages adjusted to give
effect to the increase in the Commitment; and
(m) On or prior to the date of increase, each new lender being added
to the credit facility shall deliver to the Borrower and the Administrative
Lender documentation acceptable to the Administrative Lender evidencing
such new Lender's acceptance of this Agreement and all the other Loan
Papers in form and substance reasonably acceptable to the Administrative
Lender (and making such lender a party to this Agreement and the other Loan
Papers).
In connection with any increase to the Commitment in accordance with the
terms of this Section 2.17, each existing Lender (regardless of whether such
Lender is participating in such increase) agrees to execute any and all
agreements requested by the Administrative Lender to effectuate the intent of
this Section 2.17.
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ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit. The Borrower shall give the
Administrative Lender not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Lender
shall promptly notify each Lender of such request. Upon receipt of the
Borrower's properly completed and duly executed Applications, and subject to the
terms of such Applications and to the terms of this Agreement, the
Administrative Lender agrees to issue Letters of Credit on behalf of the
Borrower in an aggregate face amount not in excess of the lesser of (a) Letter
of Credit Commitment and (b) the remainder of the Commitment minus the sum of
all outstanding Revolving Advances plus the aggregate face amount of all
outstanding Letters of Credit. No Letter of Credit shall have a maturity
extending beyond the earliest of (i) the Maturity Date, or (ii) one year from
the date of its issuance, or (iii) such earlier date as may be required to
enable the Borrower to satisfy its repayment obligations under Section 2.06
hereof. Subject to such maturity limitations and so long as no Default or Event
of Default has occurred and is continuing or would result from the renewal of a
Letter of Credit, the Letters of Credit may be renewed by the Administrative
Lender in its discretion. The Lenders shall participate ratably in any liability
under the Letters of Credit and in any unpaid reimbursement obligations of the
Borrower with respect to any Letter of Credit in their Specified Percentages.
The amount of the Letters of Credit issued and outstanding and the unpaid
reimbursement obligations of the Borrower for such Letters of Credit shall
reduce the amount of Commitment available, so that at no time shall the sum of
(i) all outstanding Revolving Advances in the aggregate, plus (ii) the aggregate
face amount of all outstanding Letters of Credit, plus (iii) (without
duplication) all outstanding reimbursement obligations related to Letters of
Credit, exceed the Commitment, and at no time shall the sum of all Revolving
Advances by any Lender made plus its ratable share of amounts available to be
drawn under the Letters of Credit and the unpaid reimbursement obligations of
the Borrower in respect of such Letters of Credit exceed its Specified
Percentage of the Commitment.
3.02. Letters of Credit Fee. In consideration for the issuance of each
Letter of Credit, the Borrower shall pay to (a) the Administrative Lender for
its sole account, an application and processing fee in the amount of the higher
of (i) $350.00 and (ii) the product of 1/8th of 1% multiplied by the face amount
of such Letter of Credit on each Letter of Credit, due and payable on the date
of issuance of each Letter of Credit, and (b) the Administrative Lender for the
account of the Administrative Lender and the Lenders in accordance with their
Specified Percentages, a per annum fee for each Letter of Credit equal to the
higher of (i) $350.00 and (ii) the product of 1.00% multiplied by the face
amount of each such Letter of Credit. Each fee for each Letter of Credit under
subsection (b) above shall be due and payable to the Administrative Lender
quarterly as it accrues, on each Quarterly Date during the term of the Letter of
Credit and on the expiration or renewal and/or extension of each such Letter of
Credit, beginning with
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the first such Quarterly Date after the issuance of each Letter of Credit and
ending on the expiration date of each such Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Borrower hereby agrees to reimburse Administrative Lender
immediately upon demand by Administrative Lender, and in immediately available
funds, for any payment or disbursement made by Administrative Lender under any
Letter of Credit. Payment shall be made by the Borrower with interest on the
amount so paid or disbursed by Administrative Lender from and including the date
payment is made under any Letter of Credit to and including the date of payment,
at the lesser of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate
in effect from time to time plus 2% per annum; provided, however, that if the
Borrower would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.03 to borrow Revolving Advances in amounts at least equal to their
reimbursement obligation for a drawing under any Letter of Credit, a Base
Advance by each Lender, in an amount equal to such Lender's Specified
Percentage, shall automatically be deemed made on the date of any such payment
or disbursement made by Administrative Lender in the amount of such obligation
and subject to the terms of this Agreement.
(b) The Borrower hereby also agrees to pay to Administrative Lender
immediately upon demand by Administrative Lender and in immediately available
funds, as security for their reimbursement obligations in respect of the Letters
of Credit under Section 3.03(a) hereof and any other amounts payable hereunder
and under the Notes, an amount equal to the aggregate amount available to be
drawn under Letters of Credit then outstanding, irrespective of whether the
Letters of Credit have been drawn upon, upon an Event of Default. Any such
payments shall be deposited in a separate account designated "Interstate
FiberNet Special Account" or such other designation as Administrative Lender
shall elect. All such amounts deposited with Administrative Lender shall be and
shall remain funds of the Borrower on deposit with Administrative Lender and may
be invested by Administrative Lender as Administrative Lender shall determine.
Such amounts may not be used by Administrative Lender to pay the drawings under
the Letters of Credit; however, such amounts may be used by Administrative
Lender as reimbursement for Letter of Credit drawings which Administrative
Lender has paid. During the existence of an Event of Default but after the
expiration of any Letter of Credit that was not drawn upon, the Borrower may
direct the Administrative Lender to use any cash collateral for any such expired
Letter of Credit, if any, to reduce the amount of the Obligations. Any amounts
remaining in the Interstate FiberNet Special Account, after the date of the
expiration of all Letters of Credit and after all Obligations have been paid in
full, shall be repaid to the Borrower promptly after such expiration and such
payment in full.
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(c) The obligations of the Borrower under this Section 3.03 will continue
until all Letters of Credit have expired and all reimbursement obligations with
respect thereto have been paid in full by the Borrower and until all other
Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative Lender upon
demand for all amounts paid under the Letters of Credit as set forth in Section
3.03(a) hereof; provided, however, if the Borrower for any reason fails to
reimburse Administrative Lender in full upon demand, whether by borrowing
Revolving Advances to pay such reimbursement obligations or otherwise, the
Lenders shall reimburse Administrative Lender in accordance with each Lender's
Specified Percentage for amounts due and unpaid from the Borrower as set forth
in Section 3.04 hereof; provided, however, that no such reimbursement made by
the Lenders shall discharge the Borrower's obligations to reimburse
Administrative Lender.
(e) The Borrower shall indemnify and hold Administrative Lender or any
Lender, its officers, directors, representatives and employees harmless from
loss for any claim, demand or liability which may be asserted against
Administrative Lender or such indemnified party in connection with actions taken
under the Letters of Credit or in connection therewith (including losses
resulting from the negligence of Administrative Lender or such indemnified
party), and shall pay Administrative Lender for reasonable fees of attorneys
(who may be employees of Administrative Lender) and legal costs paid or incurred
by Administrative Lender in connection with any matter related to the Letters of
Credit, except for losses and liabilities incurred as a direct result of the
gross negligence or wilful misconduct of Administrative Lender or such
indemnified party. If the Borrower for any reason fails to indemnify or pay
Administrative Lender or such indemnified party as set forth herein in full, the
Lenders shall indemnify and pay Administrative Lender upon demand, in accordance
with each Lender's Specified Percentage of such amounts due and unpaid from the
Borrower. The provisions of this Section 3.03(e) shall survive the termination
of this Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and
irrevocably to reimburse Administrative Lender (to the extent Administrative
Lender is not otherwise reimbursed by the Borrower in accordance with Section
3.03(a) hereof) on demand for such Lender's Specified Percentage of each draw
paid by Administrative Lender under any Letter of Credit. All amounts payable by
any Lender under this subsection shall include interest thereon at the Federal
Funds Rate, from the date of the applicable draw to the date of reimbursement by
such Lender. No Lender shall be liable for the performance or nonperformance of
the obligations of any other Lender under this Section. The obligations of the
Lenders under this Section shall continue after the Maturity Date and shall
survive termination of any Loan Papers.
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3.05. Administrative Lender's Obligations.
(a) Administrative Lender makes no representation or warranty, and assumes
no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Administrative Lender assumes no responsibility for
the financial condition of the Borrower and its Subsidiaries or for the
performance of any obligation of the Borrower. Administrative Lender may use its
discretion with respect to exercising or refraining from exercising any rights,
or taking or refraining from taking any action which may be vested in it or
which it may be entitled to take or assert with respect to any Letter of Credit
or any Application.
(b) Administrative Lender shall be under no liability to any Lender, with
respect to anything the Administrative Lender may do or refrain from doing in
the exercise of its judgment, the sole liability and responsibility of
Administrative Lender being to handle each Lender's share on as favorable a
basis as Administrative Lender handles its own share and to promptly remit to
each Lender its share of any sums received by Administrative Lender under any
Application. Administrative Lender shall have no duties or responsibilities
except those expressly set forth herein and those duties and liabilities shall
be subject to the limitations and qualifications set forth herein.
(c) Neither Administrative Lender nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender waives its right to
institute legal action against Administrative Lender for wrongful payment of any
Letter of Credit due to Administrative Lender's gross negligence or willful
misconduct. Administrative Lender shall incur no liability to any Lender, the
Borrower or any Affiliate of the Borrower or Lender in acting upon any notice,
document, order, consent, certificate, warrant or other instrument reasonably
believed by Administrative Lender to be genuine or authentic and to be signed by
the proper party.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to Closing. The obligation of each Lender to
sign this Agreement is subject to receipt by the Administrative Lender of each
of an executed letter effectively terminating the Term Loan (as defined in the
Original Credit Agreement) and executed signature pages of this Agreement.
4.02. Conditions Precedent to the Initial Advance and the Issuance of the
Initial Letter of Credit. The obligation of each Lender to make the initial
Advance under the Revolving Loan,
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or issue the initial Letter of Credit, is subject to receipt by the
Administrative Lender of each of the following, in form and substance
satisfactory to the Administrative Lender, with a copy (except for the Notes)
for each Lender:
(a) A loan certificate of the Borrower certifying as to the accuracy
of its representations and warranties in the Loan Papers, certifying that
no Default or Event of Default (as defined in the Original Credit
Agreement) has occurred under the Original Credit Agreement and/or under
this Agreement, and including a certificate of incumbency with respect to
each Authorized Officer, and including a representation that the following
items delivered in connection with the Original Credit Agreement are
unchanged and remain valid: (i) copies of the Articles of Incorporation of
the Parent, the Borrower and each of its Subsidiaries, which were certified
to be true, complete and correct by the secretary of state of each such
Person's respective state of incorporation, (ii) copies of the By-Laws of
the Parent, the Borrower and each of its Subsidiaries, (iii) copies of
certain contracts identified to the Administrative Lender, each certified
to be true, complete and correct by an Authorized Officer, and (v) copies
of a certificate of good standing and a certificate of existence for the
Parent, the Borrower and each of its Subsidiaries state of incorporation
and the States of Georgia, Florida, Alabama, Mississippi, Louisiana, Texas,
North Carolina and South Carolina, as applicable;
(b) duly executed Notes, payable to the order of each Lender, one in
an amount for each Lender equal to its Specified Percentage of the
Commitment;
(c) a loan certificate of the Borrower certifying that a copy of the
resolutions of the Parent, the Borrower and each of its Subsidiaries
authorizing them to execute, deliver and perform this Agreement, the Notes
and the other Loan Papers to which each of them is a party is attached and
is a true and accurate copy;
(d) duly executed and completed affirmations, in form and substance
acceptable to the Administrative Lender of: (i) pledge agreement by Parent,
the Borrower and, to the extent applicable, each Subsidiary of the
Borrower, (ii) Unlimited Guaranty of the Obligations by the Parent and each
of the Subsidiaries of the Borrower and (iii) all security agreements,
mortgages, deeds of trust, assignment agreements, and other collateral
agreements by the Parent, the Borrower and any Subsidiary of the Borrower,
executed in connection with the Original Credit Agreement;
(e) all other Loan Papers to be delivered on the Effective Date duly
executed and completed, dated after the Closing Date but on or before the
Effective Date;
(f) opinions addressed to Administrative Lender on behalf of the
Lenders of corporate counsel to the Parent, the Borrower and each
Subsidiary of the Borrower, addressed to
43
the Administrative Lender on behalf of the Lenders and in form and
substance satisfactory to the Lenders, dated after the Closing Date but on
or before the Effective Date;
(g) reimbursement for Administrative Lender of its reasonable fees and
expenses and for Special Counsel's reasonable fees and expenses rendered
through the Effective Date;
(h) evidence that all corporate proceedings of the Parent, the
Borrower and each Subsidiary of the Borrower taken in connection with the
transactions contemplated by this Agreement and the other Loan Papers,
shall be reasonably satisfactory in form and substance to the Lenders and
Special Counsel; and the Lenders shall have received copies of all
documents or other evidence which the Administrative Lender, Special
Counsel or any Lender may reasonably request in connection with such
transactions;
(i) a duly completed Compliance Certificate evidencing no Default or
Event of Default dated as of the Effective Date;
(j) The 1998 Senior Notes shall have been issued by the Parent in form
and substance acceptable to the Administrative Lender, and cash proceeds of
not less than $95,000,000 shall have been received by the Parent. The
Borrower shall have received an equity contribution from the Parent in an
amount not less than the greater of (i) the net proceeds of the 1998 Senior
notes issuance and (ii) $95,000,000.; and
(k) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection
with the transactions contemplated hereby, including without limitation the
status, organization or authority of the Parent, the Borrower or any
Subsidiary of the Borrower, and the enforceability of and security for the
Obligations.
4.03. Conditions Precedent to All Revolving Advances and Letters of Credit.
The obligation of each Lender to make each Revolving Advance hereunder
(excluding each Refinancing Advance), and the obligation of the Administrative
Lender to issue any Letter of Credit shall be subject to the further conditions
precedent that on the date of such Revolving Advance or such issuance of such
Letter of Credit:
(a) All of the representations and warranties of the Borrower under
this Agreement shall be true and correct at such time in all material
respects, both before and after giving effect to the application of the
proceeds of the Revolving Advance or the issuance of the Letter of Credit,
except those representations and warranties that specifically speak as of a
particular date;
(b) The incumbency of the Authorized Officers shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to Section 4.02(a) or as
44
subsequently modified and reflected in a certificate of incumbency
delivered to the Administrative Lender. The Lenders may, without waiving
this condition, consider it fulfilled and a representation by the Borrower
made to such effect if no written notice to the contrary, dated on or
before the date of such Revolving Advance or the issuance of such Letter of
Credit, is received by the Administrative Lender from the Borrower prior to
the making of such Revolving Advance or such Letter of Credit;
(c) There shall not exist a Default or an Event of Default hereunder
and none shall exist as a result of making any such Revolving Advance or
such Letter of Credit, and the Administrative Lender shall have received
written or telephonic certification thereof by an Authorized Officer (which
certification, if telephonic, shall be followed promptly by written
certification);
(d) No event shall have occurred that could reasonably be expected to
cause a Material Adverse Change since December 31, 1997;
(e) In the case of each Letter of Credit, Borrower shall have
delivered to the Administrative Lender a duly executed and complete
Application acceptable to Administrative Lender; and
(f) In the case of any Revolving Advance, the aggregate outstanding
Revolving Advances after giving effect to such proposed Revolving Advance,
plus the sum of the face amount of all outstanding Letters of Credit plus
all reimbursement obligations under Article III hereof, shall not exceed
the Commitment.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties. The Borrower hereby represents and
warrants to each Lender as follows:
(a) The respective jurisdictions of incorporation and percentage
ownership of the Subsidiaries of the Borrower on the Closing Date and
listed on Schedule 5.01(a) hereto are true and correct. Each of the Parent,
the Borrower and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state of organization.
Each of the Parent, the Borrower and its Subsidiaries has the corporate
power and corporate authority to own its properties and to carry on its
business as now being conducted. Each of the Parent, the Borrower and its
Subsidiaries is duly qualified, in good standing and authorized to do
business in each jurisdiction in which the character of its Properties or
the nature of its business requires such qualification or authorization,
except where the failure to so qualify could not reasonably be expected to
cause a Material Adverse Change.
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(b) The Borrower has corporate power and has taken all necessary
corporate action to authorize it to borrow hereunder. Each of the Parent,
the Borrower and its Subsidiaries has corporate power and has taken all
necessary corporate action to execute, deliver and perform the Loan Papers
to which it is party in accordance with the terms thereof, and to
consummate the transactions contemplated thereby. Each Loan Paper has been
duly executed and delivered by the Parent, the Borrower or such Subsidiary
executing it. Each of the Loan Papers to which the Parent, the Borrower,
and its Subsidiaries are party is a legal, valid and binding obligation of
the Parent, the Borrower or such Subsidiary, as applicable, enforceable in
accordance with its terms, subject, to enforcement of remedies, to the
following qualifications: (i) equitable principles generally, and (ii)
bankruptcy, insolvency, liquidation, reorganization, reconstruction and
other similar laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency or similar
event of the Parent, the Borrower or any Subsidiary of the Borrower).
(c) The execution, delivery and performance by the Parent, the
Borrower and its Subsidiaries of the other Loan Papers to which they are
respectively a party, and the consummation of the transactions contemplated
thereby, do not and will not (i) require any consent or approval not
already obtained, (ii) violate any Applicable Law, (iii) conflict with,
result in a breach of, or constitute a default under the articles of
incorporation or by-laws of the Parent, the Borrower or any Subsidiary of
the Borrower, or under any material License, indenture, agreement or other
instrument, to which the Parent, the Borrower or any Subsidiary of the
Borrower is a party or beneficiary of, or by which they or their respective
Properties may be bound, or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Parent, the Borrower or any Subsidiary of the
Borrower, except Permitted Liens.
(d) The Parent, the Borrower and its Subsidiaries are primarily
engaged in the operation of telecommunications and pursuing activities
related thereto.
46
(e) On the Closing Date, all material Licenses of the Parent, the
Borrower and its Subsidiaries have been duly authorized and obtained, and
are in full force and effect. The Parent, the Borrower and its Subsidiaries
are in compliance in all material respects with all provisions thereof. On
the Closing Date, no material License is the subject of any pending or, to
the best of the Borrower's knowledge, threatened challenge or revocation.
On each date after the Closing Date on which this representation is deemed
to be made, no material License is the subject of any pending or, to the
best of the Borrower's knowledge, threatened challenge or revocation, which
such event could reasonably be expected to cause a Material Adverse Change.
The Parent, the Borrower and its Subsidiaries are not required to obtain
any material License that has not already been obtained from, or effect any
material filing or registration that has not already been effected with,
the FCC, any applicable PUC or any other federal, state or local regulatory
authority in connection with the execution and delivery of this Agreement
or any other Loan Paper, or the performance thereof (other than any
enforcement of remedies by the Administrative Lender on behalf of the
Lenders), in accordance with their respective terms, including any
borrowings hereunder.
(f) The Parent, the Borrower and its Subsidiaries are in compliance in
all material respects with all material Applicable Laws. The Parent, the
Borrower and its Subsidiaries have duly and timely filed all reports,
statements and filings that are required to be filed by any of them under
the Communications Act, and are in all material respects in compliance
therewith, including without limitation the rules and regulations of the
FCC and each applicable PUC. Except as set forth on Schedule 5.01(f)
hereto, as of the Closing Date, the Borrower is not aware of any event or
circumstance constituting noncompliance (or any Person alleging
noncompliance) with any rule or regulation of the FCC or any applicable
PUC. On each date after the Closing Date on which this representation is
deemed to be made, the Borrower is not aware of any event or circumstance
constituting noncompliance (or any Person alleging noncompliance) with any
rule or regulation of the FCC or any applicable PUC, which such event or
circumstance could reasonably be expected to cause a Material Adverse
Change.
(g) On the Closing Date, the Parent, the Borrower and its Subsidiaries
have good and indefeasible title to, or a valid leasehold interest in, all
of their material assets and Properties. On each date after the Closing
Date on which this representation is deemed to be made, the Parent, the
Borrower and its Subsidiaries have good and indefeasible title to, or a
valid leasehold interest in, all of their material assets and Properties,
in which any such failure could reasonably be expected to cause a Material
Adverse Change. None of the assets of the Parent, the Borrower and its
Subsidiaries is subject to any Liens, except Permitted Liens. No financing
statement or other Lien filing authorized by the Parent, the Borrower or
any Subsidiary of the Borrower (except relating to Permitted Liens) is on
file in any state or jurisdiction that names the Parent, the Borrower or
any of its Subsidiaries as debtor or covers (or purports to cover) any
assets of the Parent, the Borrower or any of its Subsidiaries. The Parent,
the Borrower and its
47
Subsidiaries have not signed any such financing statement or filing, nor
any security agreement authorizing any Person to file any such financing
statement or filing.
(h) On the Closing Date, except as reflected on Schedule 5.01(h)
hereto, there is no action, suit, proceeding or any other Litigation
pending against, or, to the best of the Borrower's knowledge, threatened
against the Parent, the Borrower or any of its Subsidiaries, or in any
other manner relating directly and materially adversely to the Parent, the
Borrower, any of its Subsidiaries, or any of their material Properties, in
any court or before any arbitrator of any kind or before or by any
governmental body. On each date after the Closing Date on which this
representation is deemed to be made, there is no action, suit, proceeding
or any other Litigation pending against, or, to the best of the Borrower's
knowledge, threatened against the Parent, the Borrower or any of its
Subsidiaries, or in any other manner relating to the Borrower, any of its
Subsidiaries, or any of their Properties, in any court or before any
arbitrator of any kind or before or by any governmental body, which could
reasonably be expected to cause a Material Adverse Change.
(i) All federal, state and other Tax returns of the Parent, the
Borrower and its Subsidiaries required by law to be filed have been duly
filed and all federal, state and other Taxes, assessments and other
governmental charges or levies upon the Parent, the Borrower, its
Subsidiaries or any of their Properties, income, profits and assets, which
are due and payable, have been paid, except those that are diligently
contested in good faith by the Borrower and for which a reserve has been
established in accordance with GAAP, and no Lien (other than a Permitted
Lien) has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced.
(j) The Borrower has furnished or caused to be furnished to the
Lenders copies of its financial statements at September 30, 1997, which are
prepared in good faith and complete in all material respects. Each such
statement presents fairly in all material respects and in accordance with
GAAP, the financial position of the Parent, the Borrower and its
Subsidiaries as at such dates, and the results of operations for the
periods then ended. The Parent, the Borrower and its Subsidiaries have no
material liabilities, contingent or otherwise, nor material losses, except
as disclosed in writing to the Lenders prior to the Closing Date or as
disclosed on any subsequent financial statements. On the Effective Date
after giving effect to the Advances made on such date, the Parent, the
Borrower and each of its Subsidiaries is Solvent.
(k) On the Closing Date, since the date of the most recent financial
statements delivered to the Lenders, no event or circumstances have
occurred or arisen that could reasonably be expected to cause a Material
Adverse Change.
(l) None of the Parent, the Borrower or its Controlled Group maintains
or contributes to any Plan other than those disclosed to the Administrative
Lender in writing. Each
48
such Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, and any other applicable Federal or state
law, rule or regulation. With respect to each Plan of the Parent, the
Borrower and each member of its Controlled Group (other than a
Multiemployer Plan), all reports required under ERISA or any other
Applicable Law to be filed with any governmental authority, the failure of
which to file could reasonably result in liability of the Parent, the
Borrower or any member of its Controlled Group in excess of $100,000, have
been duly filed. All such reports are true and correct in all material
respects as of the date given. No such Plan of the Parent, the Borrower or
any member of its Controlled Group has any accumulated funding deficiency
(as defined in Section 412(a) of the Code) (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. None of the Parent,
the Borrower or any member of its Controlled Group has failed to make any
contribution or pay any amount due or owing as required by Section 412 of
the Code or Section 302 of ERISA or the terms of any such Plan prior to the
due date under Section 412 of the Code and Section 302 of ERISA. There has
been no ERISA Event or any event requiring disclosure under Section
4041(c)(3)(C), 4068(f), 4063(a) or 4043(b) of ERISA with respect to any
Plan or trust of the Borrower or any member of its Controlled Group since
the effective date of ERISA. The value of the assets of each Plan (other
than a Multiemployer Plan) of the Parent, Borrower and each member of its
Controlled Group equaled or exceeded the present value of the benefit
liabilities, as defined in Title IV of ERISA, of each such Plan as of the
most recent valuation date using Plan actuarial assumptions at such date.
There are no pending or, to the best of the Borrower's knowledge,
threatened claims, lawsuits or actions (other than routine claims for
benefits in the ordinary course) asserted or instituted against, and
neither the Parent, the Borrower, nor any member of its Controlled Group
has knowledge of any threatened Litigation or claims against, (i) the
assets of any Plan or trust or against any fiduciary of a Plan with respect
to the operation of such Plan, or (ii) the assets of any employee welfare
benefit plan within the meaning of Section 3(1) or ERISA, or against any
fiduciary thereof with respect to the operation of any such plan. None of
the Parent, the Borrower or any member of its Controlled Group has engaged
in any non-exempt prohibited transactions, within the meaning of Section
406 or Section 4.08 of ERISA or Section 4975 of the Code, in connection
with any Plan. None of the Parent, the Borrower or any member of its
Controlled Group has incurred or reasonably expects to incur (A) any
liability under Title IV of ERISA (other than premiums due under Section
4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event has
occurred which with the giving of notice under Section 4219 of ERISA would
result in such liability) under Section 4201 of ERISA as a result of a
complete or partial withdrawal (within the meaning of Section 4203 or 4205
of ERISA) from a Multiemployer Plan, or (C) any liability under Section
4062 of ERISA to the PBGC or to a trustee appointed under Section 4042 of
ERISA. None of the Parent, the Borrower, any member of its Controlled
Group, or any organization to which the Borrower or any member of its
Controlled Group is a successor or parent corporation within the meaning of
ERISA Section 4069(b), has engaged in a transaction within the meaning of
ERISA Section 4069. None of the Borrower or any member of its Controlled
Group maintains or has established any welfare
49
benefit plan within the meaning of Section 3(1) of ERISA which provides for
continuing benefits or coverage for any participant or any beneficiary of
any participant after such participant's termination of employment except
as may be required by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA") and the regulations thereunder, and at the
expense of the participant or the beneficiary of the participant, or
retiree medical liabilities. Each of the Borrower and its Controlled Group
which maintains a welfare benefit plan within the meaning of Section 3(1)
of ERISA has complied in all material respects with any applicable notice
and continuation requirements of COBRA and the regulations thereunder.
(m) The Borrower is not engaged principally or as one of its important
activities in the business of extending credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System, and
no part of the proceeds of the Advances will be used to purchase or carry
any margin stock (as defined by Regulation U) or to extend credit to others
for the purpose of purchasing or carrying any margin stock. Not more than
25% of the assets of any of the Parent, the Borrower or any of its
Subsidiaries are margin stock (as defined by Regulation U), and none of the
Pledged Stock or other Capital Stock of the Parent, the Borrower and the
Subsidiaries of the Borrower is margin stock. None of the Borrower and its
Subsidiaries, nor any agent acting on their behalf, have taken or will
knowingly take any action which might cause this Agreement or any Loan
Papers to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect
now or as the same may hereafter be in effect.
(n) The Parent, the Borrower and its Subsidiaries are in compliance
with all of the provisions of their articles of incorporation and by-laws.
As of the Closing Date, no event has occurred or failed to occur, which has
not been remedied or waived, the occurrence or non-occurrence of which
constitutes, or which with the passage of time or giving of notice or both
would constitute, (i) an Event of Default or (ii) a default by the Parent,
the Borrower or any of its Subsidiaries under any material contract, or
other material indenture, agreement or other instrument, or any judgment,
decree or order to which the Borrower or any of its Subsidiaries is a party
or by which they or any of their material Properties is bound. On each date
after the Closing Date on which this representation is deemed to be made,
no event has occurred or failed to occur, which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes, or which
with the passage of time or giving of notice or both would constitute, (i)
an Event of Default or (ii) a default by the Parent, the Borrower or any of
its Subsidiaries under any material contract or other material indenture,
agreement or other instrument, or any judgment, decree or order to which
the Parent, the Borrower or any of its Subsidiaries is a party or by which
they or any of their material Properties is bound, that could reasonably be
expected to cause a Material Adverse Change.
50
(o) The Borrower is not required to register under the provisions of
the Investment Company Act of 1940, as amended. Neither the entering into
or performance by the Borrower of this Agreement nor the issuance of the
Notes violates any provision of such act or requires any consent, approval,
or authorization of, or registration with, the Securities and Exchange
Commission or any other governmental or public body of authority pursuant
to any provisions of such act.
(p) On the Closing Date, none of the Parent, the Borrower nor any
Subsidiary of the Borrower has any actual knowledge or reason to believe
that any substance deemed hazardous by any applicable Environmental Law,
has been installed on any real property now owned by the Parent, the
Borrower or any of its Subsidiaries, except (i) for hazardous substances
the presence of which is not in violation of law and (ii) as disclosed to
the Lenders. On each date after the Closing Date on which this
representation is deemed to be made, none of the Parent, the Borrower nor
any Subsidiary of the Borrower has any actual knowledge or reason to
believe that any substance deemed hazardous by any applicable Environmental
Law, has been installed in violation of law on any real property now owned
by the Parent, the Borrower or any of its Subsidiaries except as disclosed
to the Lenders and which could not, in the reasonable judgment of the
Borrower, cause a Material Adverse Change. As of the Closing Date, the
Parent, the Borrower and its Subsidiaries are not in violation of or
subject to any existing, pending or, to the best of the Borrower's
knowledge, threatened investigation or inquiry by any governmental
authority or to any material remedial obligations under any applicable
Environmental Laws, and this representation and warranty would continue to
be true and correct following disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to any real property of the Parent, the Borrower and its
Subsidiaries. On each date after the Closing Date on which this
representation is deemed to be made, the Parent, the Borrower and its
Subsidiaries are not in violation of or subject to any existing, pending
or, to the best of the Borrower's knowledge, threatened investigation or
inquiry by any governmental authority or to any material remedial
obligations under any applicable Environmental Laws which could cause a
Material Adverse Change, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to any real property of the Parent, the
Borrower and its Subsidiaries. The Parent, the Borrower and its
Subsidiaries are not required to obtain any permits, Licenses or similar
authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures, and equipment forming a part of any real property
of the Parent, the Borrower or any Subsidiary of the Borrower by reason of
any applicable Environmental Laws, except those that have been obtained. As
of the Closing Date, the Parent, Borrower and its Subsidiaries have no
actual knowledge or reason to believe, after reasonable investigation, that
any hazardous substances or solid wastes have been disposed of or otherwise
released on or to the real property of the Borrower or any of its
Subsidiaries in violation of any applicable Environmental Law. On each date
after the Closing Date on which this representation is deemed to be made,
the Borrower and its Subsidiaries have no actual knowledge or reason to
51
believe, that any hazardous substances or solid wastes have been disposed
of or otherwise released on or to the real property of the Parent, the
Borrower or any of its Subsidiaries, within the meaning of the applicable
Environmental Laws, except as disclosed to the Lenders and which such
disposal or release could not cause a Material Adverse Change.
(q) On the Closing Date, there is no Litigation, or, to the best of
the Borrower's knowledge, threatened Litigation or pending or threatened
claim of breach or default, with respect to any material contract, or any
loan agreement or document evidencing any Debt for Borrowed Money of the
Parent, the Borrower, or its Subsidiaries that has not been disclosed in
writing to the Lenders.
(r) All Pledged Stock has been duly authorized and validly issued, and
is fully paid and nonassessable. The Capital Stock described on Schedule
5.01(r) hereto constitutes all the issued and outstanding Capital Stock of
the Borrower and the Subsidiaries of the Borrower or the Subsidiaries of
another Subsidiary of the Borrower, except such shares that have been
issued after the Closing Date, pledged to the Administrative Lender to
secure the Obligations and delivered to the Administrative Lender together
with stock powers executed in blank. No Person has conversion rights with
respect to, or any subscription rights, calls, commitments or claims of any
character for, or any repurchase or redemption options relating to, the
Pledged Stock, other than those that have been waived. The Pledged Stock
when issued or sold, was either (i) registered or qualified under
applicable federal or state securities laws, or (ii) exempt therefrom.
(s) No broker's, finder's or other fee or commission will be payable
by the Borrower (other than to the Lenders hereunder) with respect to the
making of the Commitment or the Advances hereunder. The Borrower agrees to
indemnify and hold harmless the Administrative Lender and each Lender from
and against any claims, demand, liability, proceedings, costs or expenses
asserted with respect to or arising in connection with any such fees or
commissions.
(t) No event has occurred which permits (or with the passage of time
would permit) the revocation or termination of any material License, which
could result in the imposition of any restriction thereon of such a nature
that could reasonably be expected to cause a Material Adverse Change.
(u) To the best knowledge of the Borrower, as of the Closing Date, the
Parent, the Borrower and its Subsidiaries have obtained all material
patents, trademarks, service-marks, trade names, copyrights, Licenses and
other rights, free from burdensome restrictions, that are necessary for the
operation of their business as presently conducted and as proposed to be
conducted. On each date after the Closing Date on which this representation
is deemed to be made, the Parent, the Borrower and its Subsidiaries have
obtained all patents, trademarks, service-marks, trade names, copyrights,
Licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their business as presently conducted and as
52
proposed to be conducted, except those, the failure of which to obtain
could not be reasonably expected to cause a Material Adverse Change.
Nothing has come to the attention of the Parent, the Borrower or any of its
Subsidiaries to the effect that (i) any process, method, part or other
material presently contemplated to be employed by the Parent, the Borrower
or any Subsidiary of the Borrower may infringe any patent, trademark,
service-▇▇▇▇, trade name, copyright, License or other right owned by any
other Person, or (ii) there is pending or overtly threatened any claim or
Litigation against or affecting the Parent, the Borrower or any Subsidiary
of the Borrower contesting its right to sell or use any such process,
method, part or other material, which could reasonably be expected to cause
a Material Adverse Change.
(v) Neither this Agreement nor any other document, certificate or
statement which has been furnished to any Lender by or on behalf of the
Parent, the Borrower or any Subsidiary of the Borrower in connection
herewith contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statement contained
herein and therein not misleading at the time it was furnished. On the
Closing Date, there is no fact known to the Parent or the Borrower and not
known to the public generally that could reasonably be expected to cause a
Material Adverse Change, which has not been set forth in this Agreement or
in the documents, certificates and statements furnished to the Lenders by
or on behalf of the Borrower prior to the date hereof in connection with
the transaction contemplated hereby. On each date after the Closing Date on
which this representation is deemed to be made, there is no fact known to
the Parent or the Borrower and not known to the public generally that could
reasonably be expected to cause a Material Adverse Change, which has not
been disclosed to the Lenders in writing.
(w) The Parent is not, the Borrower is not, nor is any Subsidiary of
the Borrower, a party to any contractual relationship which is breached or
in default solely as a result of any change in the ownership, management or
Board of Directors of the Parent or the Borrower, unless the Borrower has
agreed to a substantially similar provision in this Agreement.
5.02. Survival of Representations and Warranties. All representations and
warranties made under this Agreement and the other Loan Papers shall be deemed
to be made at and as of the Closing Date and at and as of the date of each
Advance, and each shall be true and correct in all material respects when made.
All such representations and warranties shall survive, and not be waived by, the
execution hereof by any Lender, any investigation or inquiry by any Lender, or
by the making of any Advance under this Agreement.
53
ARTICLE VI. GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
6.01. Preservation of Existence and Similar Matters.
(a) The Borrower shall, and shall cause the Parent and each Subsidiary of
the Borrower to, preserve and maintain, or timely obtain and thereafter preserve
and maintain (i) material rights, franchises, authorizations, consents,
privileges and all other material Licenses from federal, state and local
governmental bodies and any Tribunal (regulatory or otherwise) which the Parent
or the Borrower or such Subsidiary deems reasonably necessary or advisable to
conduct its business in the ordinary course, and (ii) its existence (except as
permitted by Section 8.05 hereof); and
(b) The Borrower shall, and shall cause the Parent and each Subsidiary of
the Borrower to, qualify and remain 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 or authorization, except where the failure
to do so could not cause a Material Adverse Change.
6.02. Business; Compliance with Applicable Law. The Parent, the Borrower
and its Subsidiaries shall (a) engage primarily in the business of
telecommunications, and activities related thereto, and (b) comply in all
material respects with the requirements of all Applicable Law.
6.03. Maintenance of Properties. The Borrower shall, and shall cause the
Parent and each Subsidiary of the Borrower to, maintain or cause to be
maintained all their material Properties necessary to the conduct of their
business (whether owned or held under lease) in reasonably good repair, working
order and condition, taken as a whole, and from time to time make or cause to be
made all appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
6.04. Accounting Methods and Financial Records. The Borrower shall, and
shall cause the Parent and each Subsidiary of the Borrower to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made and
all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. The Parent, the Borrower and each of
its Subsidiaries shall maintain a fiscal year ending on December 31.
54
6.05. Insurance. The Borrower shall, and shall cause the Parent and each
Subsidiary of the Borrower to, maintain insurance from responsible companies in
such amounts and against such risks as shall be customary and usual in the
industry for companies of similar size and capability, but in no event less than
the amount and types insured as of the Closing Date; provided, however, the
Borrower, the Parent and each Subsidiary may self-insure its outside plant
physical facilities, consisting of the fiber optic cable network. Each insurance
policy shall name the Administrative Lender as additional insured and provide
for at least 30 days' prior notice to the Administrative Lender of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise.
6.06. Payment of Taxes and Claims. The Borrower shall, and shall cause the
Parent and each Subsidiary of the Borrower to, pay and discharge all Taxes,
assessments and governmental charges or levies imposed upon it or its income or
Properties prior to the date on which penalties attach thereto, and all lawful
material claims for labor, materials and supplies which, if unpaid, might become
a Lien upon any of their Properties, except those Taxes, assessments and charges
contested by the Borrower diligently in good faith, and for which adequate
reserves have been established in accordance with GAAP. The Borrower shall, and
shall cause each Subsidiary of the Borrower to, timely file all information
returns required by federal, state or local Tax authorities.
6.07. Visits and Inspections. The Borrower shall, and shall cause the
Parent and each Subsidiary of the Borrower to, promptly, permit representatives
of the Administrative Lender or any Lender from time to time, upon prior notice
reasonable under the circumstances, to (a) visit and inspect the Properties of
the Parent, the Borrower and each Subsidiary of the Borrower as often as the
Administrative Lender or any Lender shall deem advisable, (b) inspect and make
extracts from and copies of the Parent's, Borrower's and each Subsidiary of the
Borrower's books and records, and (c) discuss with the Parent's, the Borrower's
and each Subsidiary of the Borrower's directors, officers, employees and, after
notice to the Borrower, the auditors of the Parent and the Borrower, its
business, assets, liabilities, financial positions, results of operations and
business prospects.
6.08. Payment of Debt for Borrowed Money. The Borrower shall, and shall
cause the Parent and each Subsidiary of the Borrower to, pay its Debt for
Borrowed Money when and as the same becomes due.
6.09. Use of Proceeds. The Borrower shall use the proceeds of Advances
solely (a) for Permitted Acquisitions, (b) for Capital Expenditures permitted
under the terms of this Agreement, (c) for working capital and (d) for other
lawful corporate purposes.
55
6.10. Indemnity.
(a) The Borrower agrees to defend, protect, indemnify and hold harmless the
Administrative Lender, each Lender, each of their respective Affiliates, and
each of their respective (including such Affiliates') officers, directors,
employees, agents, attorneys, shareholders and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively, "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect or consequential and whether based on any federal, state, or
local laws and regulations), under common law or at equitable cause, or on
contract, tort or otherwise, arising from or connected with the past, present or
future operations of the Borrower or its predecessors in interest, in any manner
relating to or arising out of this Agreement, the Loan Papers, or any act, event
or transaction or alleged act, event or transaction relating or attendant
thereto, the making of any participations in the Advances and the management of
the Advances, including in connection with, or as a result, in whole or in part,
of any negligence of Administrative Lender or any Lender (other than those
matters raised exclusively by a participant against the Administrative Lender or
any Lender and not the Borrower), or the use or intended use of the proceeds of
the Advances hereunder, or in connection with any investigation of any potential
matter covered hereby, but excluding any claim or liability that arises as the
result of the gross negligence or willful misconduct of any Indemnitee, as
finally judicially determined by a court of competent jurisdiction
(collectively, the "Indemnified Matters").
(b) In addition, the Borrower shall periodically, upon request, reimburse
each Indemnitee for its reasonable legal and other actual expenses (including
the cost of any investigation and preparation) incurred in connection with any
Indemnified Matter. If for any reason the foregoing indemnification is
unavailable to any Indemnitee or insufficient to hold any Indemnitee harmless
with respect to Indemnified Matters, then the Borrower shall contribute to the
amount paid or payable by such Indemnitee as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Borrower and the Borrower's stockholders on
the one hand and such Indemnitee on the other hand but also the relative fault
of the Borrower and such Indemnitee, as well as any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations under
this Section shall be in addition to any liability which the Borrower may
otherwise have, shall extend upon the same terms and conditions to each
Indemnitee, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the
56
Borrower, the Administrative Lender, the Lenders and all other Indemnitees. This
Section shall survive any termination of this Agreement and payment of the
Obligations.
6.11. Environmental Law Compliance. The use which the Parent, the Borrower
or any Subsidiary of the Borrower intends to make of any real Property owned by
it will not result in the disposal or other release of any hazardous substance
or solid waste on or to such real Property in violation of any Environmental
Law. As used herein, the terms "hazardous substance" and "release" as used in
this Section shall have the meanings specified in CERCLA (as defined in the
definition of applicable Environmental Laws), and the terms "solid waste" and
"disposal" shall have the meanings specified in RCRA (as defined in the
definition of applicable Environmental Laws); provided, however, that if CERCLA
or RCRA is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment; and provided further, to the extent that any other law applicable to
the Parent, the Borrower, any Subsidiary of the Borrower or any of their
Properties establishes a meaning for "hazardous substance," "release," "solid
waste," or "disposal" which is broader than that specified in either CERCLA or
RCRA, such broader meaning shall apply. The Borrower agrees to indemnify and
hold the Administrative Lender and each Lender harmless from and against, and to
reimburse them with respect to, any and all claims, demands, causes of action,
loss, damage, liabilities, costs and expenses (including reasonable attorneys'
fees and courts costs) of any kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any of them at any time and from
time to time by reason of or arising out of (a) the failure of the Parent, the
Borrower or any Subsidiary of the Borrower to perform any obligation hereunder
regarding asbestos or applicable Environmental Laws, (b) any violation on or
before the Release Date of any applicable Environmental Law in effect on or
before the Release Date, and (c) any act, omission, event or circumstance
existing or occurring on or prior to the Release Date (including without
limitation the presence on such real Property or release from such real Property
of hazardous substances or solid wastes disposed of or otherwise released on or
prior to the Release Date), resulting from or in connection with the ownership
of the real Property, regardless of whether the act, omission, event or
circumstance constituted a violation of any applicable Environmental Law at the
time of its existence or occurrence, or whether the act, omission, event or
circumstance is caused by or relates to the negligence of any indemnified
Person; provided, that the Borrower shall not be under any obligation to
indemnify the Administrative Lender or any Lender to the extent that any such
liability arises as the result of the gross negligence or willful misconduct of
such Person, as finally judicially determined by a court of competent
jurisdiction. The provisions of this paragraph shall survive the Release Date
and shall continue thereafter in full force and effect.
6.12. Acquisitions, Generally. In connection with any Permitted Acquisition
made by the Parent, the Borrower or any Subsidiary of the Borrower during the
term of this Agreement, the Borrower shall or shall cause the Parent or such
Subsidiary to, (a) not less than ten Business Days prior to the proposed
acquisition date, deliver to Administrative Lender a detailed written
57
description of the proposed Permitted Acquisition in form reasonably acceptable
to the Administrative Lender, and (b) prior to the consummation of the
acquisition a statement certified by an Authorized Officer that (i) the proposed
transaction complies with the definition of Permitted Acquisition set forth in
Article I hereof and with the terms and conditions set forth in Section 8.05(b)
and/or, to the extent applicable, Section 8.05(d) hereof, and (ii) no Default or
Event of Default exists prior to or after giving effect to any requested Advance
or the consummation of such acquisition, or will exist upon consummation of the
proposed acquisition and related borrowings and transactions, together with a
Compliance Certificate computed after giving effect to such acquisition and
borrowings.
6.13. Subsidiary Designation. The Borrower agrees that a Subsidiary will be
a Restricted Subsidiary if such Subsidiary, together with its Subsidiaries, (i)
for the most recent fiscal year of the Parent, accounted for more than 10% of
the consolidated revenues of the Parent and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Parent and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Parent for such fiscal year.
6.14. Subsidiary Creation or Acquisition. If and for so long as any of the
1997 Senior Notes are outstanding, none of the Parent, the Borrower or any
Subsidiary may create or acquire any Subsidiary without the prior written
consent of the Administrative Agent.
ARTICLE VII. INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled), the Borrower shall furnish or cause
to be furnished to each Lender:
7.01. Quarterly Financial Statements and Information. Within 45 days after
the end of each fiscal quarter, consolidated and consolidating balance sheets of
the Parent, the Borrower and its Subsidiaries as at the end of such quarter and
the related consolidated and consolidating statements of income and consolidated
statements of changes in cash for such quarter and for the elapsed portion of
the year ended with the last day of such quarter, all of which shall be
certified by an Authorized Officer, to, in his or her opinion, present fairly in
all material respects, in accordance with GAAP, the financial position and
results of operations of the Parent, the Borrower and its Subsidiaries as at the
end of and for such period, and for the elapsed portion of the year ended with
the last day of such period.
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7.02. Annual Financial Statements and Information.
(a) Within 120 days after the end of each fiscal year, a copy of (i) the
consolidated balance sheet of the Parent, the Borrower and its Subsidiaries, as
of the end of the current and prior fiscal years and (ii) consolidated
statements of earnings, statements of changes in shareholders' equity, and
statements of changes in cash as of and through the end of such fiscal year, all
of which are prepared in accordance with GAAP, and certified by independent
certified public accountants acceptable to the Lenders, whose opinion shall be
in scope and substance in accordance with generally accepted auditing standards
and shall be unqualified.
(b) As soon as available, but in any event within 60 days following the end
of each fiscal year, a copy of the annual consolidated operating budget of the
Parent, the Borrower and its Subsidiaries for the succeeding fiscal year.
7.03. Compliance Certificates. At the time financial statements are
furnished pursuant to Section 7.01 and Section 7.02 hereof, a duly completed
Compliance Certificate evidencing no Default or Event of Default.
7.04. Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Parent, the Borrower or any Subsidiary of
the Borrower by accountants in connection with any annual, interim or special
audit, including without limitation any report prepared in connection with the
annual audit referred to in Section 7.02 hereof, and any other comment letter
submitted to management in connection with any such audit, (ii) each financial
statement, report, notice or proxy statement sent by the Parent, the Borrower or
any Subsidiary of the Borrower to stockholders generally, (iii) each regular or
periodic report and any registration statement or prospectus (or material
written communication in respect of any thereof) filed by the Parent, the
Borrower or any Subsidiary of the Borrower with any securities exchange, with
the Securities and Exchange Commission or any successor agency, and (iv) all
press releases concerning material financial aspects of the Parent, the Borrower
or any Subsidiary of the Borrower;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s) or
other evidence of indebtedness or other security of the Parent, the Borrower or
any Subsidiary of the Borrower in excess of $250,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, (ii) any occurrence or non-occurrence of
any event which constitutes or which with the passage of time or giving of
notice or both could constitute a material breach by the Parent, the Borrower or
any Subsidiary of the Borrower under any material agreement or instrument other
than this Agreement to which the Parent, the Borrower or any Subsidiary of the
Borrower is a party or by
59
which any of their Properties may be bound, or (iii) any event, circumstance or
condition which could reasonably be expected to cause a Material Adverse Change,
a written notice specifying the details thereof (or the nature of any claimed
default or event of default) and what action is being taken or is proposed to be
taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and copies
of any notices received from the FCC, any applicable PUC or any other federal,
state or local regulatory agencies or any tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or noncompliance
with the Communications Act or any law, rule or regulation of any applicable
PUC, or might result in the payment of money by the Parent, the Borrower or any
Subsidiary of the Borrower in an amount of $250,000 or more in the aggregate, or
otherwise cause a Material Adverse Change, or result in the loss or suspension
of any material License or any material contract;
(d) Promptly upon the knowledge of an Authorized Officer of receipt by the
Parent, the Borrower or any Subsidiary of the Borrower from any governmental
agency, or any government, political subdivision or other entity, of any
material notice, correspondence, hearing, proceeding or order regarding or
affecting the Parent, the Borrower, any Subsidiary of the Borrower, or any of
their Properties or businesses not in the ordinary course of business, a copy of
such notice, correspondence, hearing, proceeding or order; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Parent, the Borrower and its
Subsidiaries that is within the Borrower's control, as the Administrative Lender
or any Lender may reasonably request.
7.05. Notice of Litigation, Default and Other Matters. Prompt notice of the
following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all proceedings and investigations by or
before the FCC, any applicable PUC, or any other governmental body, and all
other actions and proceedings in any court or before any arbitrator
involving claims for damages (including punitive damages) in excess of
either $1,000,000 for any one proceeding or investigation, or $5,000,000 in
the aggregate for all such proceedings and investigations (after deducting
the amount with respect to the Parent, the Borrower or any Subsidiary of
the Borrower is insured), against or in any other way relating directly to
the Parent, the Borrower, any Subsidiary of the Borrower, or any of their
Properties or businesses;
60
(b) Promptly upon the happening of any condition or event which
constitutes a Default or Event of Default, a written notice specifying the
nature and period of existence thereof and what action is being taken or is
proposed to be taken with respect thereto; and
(c) Any event which could cause a Material Adverse Change with respect
to the business, assets, liabilities, financial position, results of
operations or prospective business of the Parent, the Borrower or any
Subsidiary of the Borrower.
7.06. ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Parent, the
Borrower or any member of its Controlled Group knows or has reason to know that
any ERISA Event described in clause (a) of the definition of ERISA Event or any
event described in Section 4063(a) of ERISA with respect to any Plan of the
Parent, the Borrower or any member of its Controlled Group has occurred, and
(ii) within 10 days after the Parent, the Borrower or any member of its
Controlled Group knows or has reason to know that any other ERISA Event with
respect to any Plan of the Parent, the Borrower or any member of its Controlled
Group has occurred or a request for a minimum funding waiver under Section 412
of the Code with respect to any Plan of the Parent, the Borrower or any member
of its Controlled Group, a written notice describing such event and describing
what action is being taken or is proposed to be taken with respect thereto,
together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by the Parent, the Borrower or any member of its Controlled Group from
the PBGC, copies of each notice received by the Parent, the Borrower or any
member of its Controlled Group of the PBGC's intention to terminate any Plan or
to have a trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by
the Parent, the Borrower or any member of its Controlled Group with the United
States Department of Labor, the Internal Revenue Service or the PBGC, copies of
each annual and other report (including Schedule B thereto) with respect to each
Plan;
(d) Promptly and in any event within 30 days after receipt thereof, a copy
of any notice, determination letter, ruling or opinion the Parent, the Borrower
or any member of its Controlled Group receives from the PBGC, the United States
Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Parent, the Borrower or any member of
its Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from
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the chief financial officer of the Parent, the Borrower or such member of its
Controlled Group setting forth details as to the events giving rise to such
potential withdrawal liability and the action which the Parent, the Borrower or
such member of its Controlled Group is taking or proposes to take with respect
thereto;
(f) Notification within 30 days of any material increases in the benefits
of any existing Plan which is not a Multiemployer Plan, or the establishment of
any new Plans, or the commencement of contributions to any Plan to which the
Parent, the Borrower or any member of its Controlled Group was not previously
contributing;
(g) Notification within three Business Days after the Parent, the Borrower
or any member of its Controlled Group knows or has reason to know that the
Parent, the Borrower or any such member of its Controlled Group has or intends
to file a notice of intent to terminate any Plan under a distress termination
within the meaning of Section 4041(c) of ERISA and a copy of such notice; and
(h) Promptly after receipt of written notice of commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Parent, the Borrower or any member of its Controlled
Group with respect to any Plan.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
8.01. Financial Covenants.
(a) Total Leverage Ratio. The Borrower shall not permit the Total Leverage
Ratio at any time during the term of this Agreement to be more than the
following ratios during the following time periods:
Period Ratio
------ -----
From the Closing Date through June 30, 1999 9.50 to 1.00
From July 1, 1999 through June 30, 2000 8.75 to 1.00
From July 1, 2000 through June 30, 2001 7.50 to 1.00
From July 1, 2001 through June 30, 2002 6.00 to 1.00
From July 1, 2002 and thereafter 4.50 to 1.00
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(b) Senior Leverage Ratio. The Borrower shall not permit the Senior
Leverage Ratio at any time during the term of this Agreement to be more than the
following ratios during the following time periods:
Period Ratio
------ -----
From the Closing Date through June 30, 2000 2.75 to 1.00
From July 1, 2000 and thereafter 2.25 to 1.00
(c) Interest Coverage Ratio. The Borrower shall not permit the Interest
Coverage Ratio at any time during the term of this Agreement to be less than the
following ratios during the following time periods:
Period Ratio
------ -----
From the Closing Date through June 30, 2000 1.50 to 1.00
From July 1, 2000 and thereafter 1.75 to 1.00
Notwithstanding the foregoing, in the event that the Parent does not exercise
its Optional Redemption Rights to redeem 35% of the outstanding 1997 Senior
Notes within 60 days after the Effective Date hereof, then the Borrower shall
not permit the Interest Coverage Ratio at any time during the term of this
Agreement to be less than 1.75 to 1.00.
(d) Capital Expenditures. The Borrower shall not permit Capital
Expenditures made by the Parent, the Borrower and its Subsidiaries for each
fiscal year of the Borrower to exceed the amounts set forth below for each
fiscal year; provided, that (i) to the extent that less than such amount set
forth below was used by the Parent, the Borrower and its Subsidiaries for
Capital Expenditures for any fiscal year, the Parent, the Borrower or its
Subsidiaries may increase the limitation on Capital Expenditures for any
succeeding fiscal year or years provided that such increases in the aggregate do
not exceed the amount of such unused amount and (ii) over the term of this
Agreement, the Parent, the Borrower and its Subsidiaries may add $25,000,000 in
the aggregate to the maximum amounts set forth below, provided that at the time
that the Parent, the Borrower or any Subsidiary of the Borrower elects to
increase such maximum amounts by any portion of such $25,000,000, there must
exist no Default or Event of Default and the Borrower must note such increase on
the first Compliance Certificate it delivers thereafter in accordance with the
terms of Section 7.03 hereof.
Period Amount
------ ------
For the Fiscal Year 1998 $105,000,000
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For the Fiscal Year 1999 $100,000,000
For the Fiscal Year 2000 $ 50,000,000
For the Fiscal Year 2001 and each year thereafter $ 45,000,000
8.02. Debt for Borrowed Money. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, create, assume, incur or
otherwise become or remain obligated in respect of, or permit to be outstanding,
or suffer to exist any Debt for Borrowed Money, except:
(a) with respect to the Parent, the Borrower and its Subsidiaries,
Debt for Borrowed Money under the Loan Papers;
(b) with respect to the Parent, the Borrower and its Subsidiaries,
Debt for Borrowed Money in existence on the Closing Date described on
Schedule 8.02 hereto and not otherwise permitted pursuant to this Section
8.02 in the principal amounts and as such Debt for Borrowed Money exists as
of the Closing Date;
(c) with respect to the Parent (i) the 1998 Senior Notes in an amount
not more than $160,000,000 and due in 2008, on other terms and conditions
acceptable to the Administrative Agent and (ii) the 1997 Senior Notes;
(d) provided that no Default or Event of Default exists or would
result from the incurrence thereof, with respect to the Borrower and the
wholly owned Subsidiaries of the Borrower, Debt owed to each other;
(e) provided that no Default or Event of Default exists or would
result from the incurrence thereof, Debt constituting Capital Leases or
purchase money Debt in an aggregate amount over the term of this Agreement
not to exceed $5,000,000, incurred by the Borrower or any Subsidiary in
connection with any acquisition permitted to be made in accordance with the
terms of Section 8.05(b) hereof.
8.03. Liens. The Borrower shall not, and shall not permit the Parent or any
Subsidiary of the Borrower to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets or Properties, whether now
owned or hereafter acquired, except (a) Permitted Liens and (b) so long as no
Default or Event of Default exists or would result from the incurrence of such
Lien, Liens securing Debt permitted to be incurred by Section 8.02(e) hereof,
but only so long as such Debt secured thereby shall not be increased and the
Liens shall not cover additional assets of the Borrower, the Parent or any such
Subsidiary. The Borrower shall not, and shall not permit the Parent or any
Subsidiary of the Borrower to, agree with any other Person that it shall not
create, assume, incur, permit or suffer to exist or to be created, assumed,
incurred or permitted to exist, directly or indirectly, any Lien on any of its
assets or Properties.
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8.04. Investments. The Borrower shall not, and shall not permit the Parent
or any Subsidiary of the Borrower to, make any Investment, except that the
Borrower may purchase or otherwise acquire and own:
(a) Marketable, direct obligations of, or guaranteed by, the United
States of America and maturing within 365 days of the date of purchase;
(b) Commercial paper issued by U.S. corporations that have a rating of
A-1/P-1 or better by Standard & Poor's Ratings Group, a Division of
▇▇▇▇▇▇-▇▇▇▇, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) Certificates of deposit of domestic banks maturing within 365 days
of the date of purchase, which banks' debt obligations have one of the two
highest ratings obtainable from Standard & Poor's Ratings Group, a Division
of ▇▇▇▇▇▇-▇▇▇▇, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) Securities issued by U.S. corporations that have one of the two
highest ratings obtainable from Standard & Poor's Ratings Group, a Division
of ▇▇▇▇▇▇-▇▇▇▇, Inc. or ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) Investments in acquisitions permitted by Section 8.05(b) hereof,
so long as (i) the Capital Stock of each new Subsidiary is pledged to the
Lenders to secure the Obligations pursuant to a pledge agreement
substantially identical in form and substance to the Pledge Agreement, and
(ii) each new Subsidiary of the Borrower (A) is subject to the provisions
hereof, (B) immediately becomes a party to an Unlimited Guaranty and (C)
grants a Lien and security interest in all such assets and Properties of
such new Subsidiary of the type already constituting Collateral hereunder
and as requested by the Majority Lenders, pursuant to security documents
required by the Administrative Lender substantially in the form of those
already constituting Loan Papers;
(f) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms; and
(g) Investments in existence on the Closing Date described on Schedule
8.04 hereto.
8.05. Liquidation, Disposition or Acquisition of Assets, Merger, New
Subsidiaries. The Borrower shall not, and shall not permit the Parent or any
Subsidiary of the Borrower to, at any time:
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(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, Properties or business
(other than in the ordinary course of business and other than assets that
are damaged or obsolete), provided that, (i) after delivery of prior
written notice to the Administrative Lender, any Subsidiary of the Borrower
can be dissolved so long as a wholly owned Subsidiary of the Borrower that
has executed an Unlimited Guaranty or the Borrower acquires all such
Subsidiary's assets, and (ii) after delivery of prior written notice to the
Administrative Lender, any wholly owned direct or indirect Subsidiary of
the Borrower that has executed an Unlimited Guaranty of the Obligations
hereunder may sell or transfer assets, Property or business to the Borrower
or any other wholly owned indirect or indirect Subsidiary of the Borrower
that has executed an Unlimited Guaranty of the Obligations hereunder;
(b) acquire any assets, Property or business of any other Person, or
participate in any joint venture, except (i) the Borrower and the
Subsidiaries of the Borrower may acquire assets and Property acquired in
the ordinary course of business, (ii) provided that no Default or Event of
Default exists both before and after giving effect to such acquisition, and
Borrower complies fully with Sections 6.12, 8.04(e) and 8.05(d) hereof,
Permitted Acquisitions may be consummated if either (I) (A) the total
purchase price for any one such acquisition is less than $10,000,000, and
(B) the aggregate purchase price for all such Permitted Acquisitions over
the term of the Agreement is less than $25,000,000, or (II) the Majority
Lenders give their prior written approval to such acquisition, and (iii)
after delivery of prior written notice to the Administrative Lender, the
Borrower or any wholly owned direct or indirect Subsidiary of the Borrower
that has executed an Unlimited Guaranty of the Obligations hereunder may
acquire assets, Property or business from any other wholly owned direct or
indirect Subsidiary of the Borrower that has executed an Unlimited Guaranty
of the Obligations hereunder;
(c) enter into any merger or consolidation, except that, so long as
there exists no Default or Event of Default and none is caused thereby (i)
after delivery of prior written notice to the Administrative Lender, any
wholly owned Subsidiary of the Borrower can merge or consolidate into any
other wholly owned Subsidiary of the Borrower, or so long as such
transaction is in connection with a Permitted Acquisition, into another
Person, so long as a wholly owned Subsidiary of the Borrower which has
executed an Unlimited Guaranty is a survivor, or into the Borrower so long
as the Borrower is the surviving corporation or (ii) after delivery of
prior written notice to the Administrative Lender, another Person may be
merged into the Borrower or any wholly owned Subsidiary of the Borrower
that has executed an Unlimited Guaranty in connection with a Permitted
Acquisition, so long as the Borrower or such wholly owned Subsidiary is the
surviving corporation;
(d) create or acquire any Subsidiary, except (a) as permitted by
Section 8.04(e) hereof and Section 8.05(b) above, and (b) so long as (i)
there exists no Default or Event of Default both before and after giving
effect to the creation of any new wholly owned Subsidiary and the
66
transfer of any assets to such wholly owned Subsidiary, (ii) immediately
upon the creation of any new wholly owned Subsidiary, such Subsidiary shall
become a signatory to an Unlimited Guaranty of the Obligations delivered to
the Administrative Lender, (iii) the Borrower immediately delivers all
shares of Capital Stock of the new wholly owned Subsidiary to the
Administrative Lender together with stock powers executed in blank, and
(iv) the Borrower or any Subsidiary of the Borrower owning any portion of
the Capital Stock of any such new wholly owned Subsidiary executes and
delivers to the Administrative Lender a pledge agreement pledging all such
Capital Stock to secure the Obligations in form substantially similar to
the pledge agreement executed by the Borrower in connection with the
Original Credit Agreement, the Borrower may create a new wholly owned
Subsidiary of the Borrower. Nothing in this Section 8.05(d) shall permit
the Borrower or any Subsidiary of the Borrower to create any Subsidiary
that is not wholly owned.
In connection with any asset sale permitted by this Section 8.05 or otherwise
consented to by the Lenders in accordance with the terms of this Agreement, the
Administrative Lender is hereby authorized by each Lender to (i) execute any and
all releases deemed appropriate by it to release such assets of the Borrower and
the Subsidiaries of the Borrower (including, without limitation, Capital Stock
owned by the Borrower and its Subsidiaries) constituting Collateral from all
Liens and security interests securing all or any portion of the Obligations,
(ii) return to the Borrower any such Collateral in the possession of the
Administrative Lender, and (iii) take such other action as the Administrative
Lender deems necessary or appropriate in connection with such transaction and in
furtherance of the effectuation thereof.
8.06. Guaranties; Contingent Liabilities. The Borrower shall not, and shall
not permit the Parent or any Subsidiary of the Borrower to, at any time make or
issue any Guaranty, or assume, be obligated with respect to, or permit to be
outstanding any Contingent Liabilities, except pursuant to the Loan Papers;
8.07. Restricted Payments. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to, directly or indirectly declare,
make or pay any Restricted Payment; provided, however
(a) any wholly owned Subsidiary of the Borrower that has executed an
Unlimited Guaranty of the Obligations hereunder may declare, make and pay
Restricted Payments to the Borrower or any other wholly owned Subsidiary
that has executed an Unlimited Guaranty of the Obligations hereunder, and
(b) so long as
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(i) there exists no Default or Event of Default both before and
after giving effect to any such Restricted Payment (except an Event of
Default under Section 9.01(b) hereof), and
(ii) with respect to any such distribution relating to the 1997
Senior Notes, the date any such Distribution is made is the later of
(A) June 30, 2000 and (B) such time as the balance of the Interest
Reserve Escrow Account is zero,
then the Borrower may declare, make and pay Restricted Payments
constituting Dividends to the Parent in an amount not to exceed the
scheduled cash interest due and payable on the outstanding 1997 Senior
Notes and the 1998 Senior Notes, and
(c) So long as each of the following is true: (i) the Borrower has
been unable to make a Restricted Payment constituting a dividend to the
Parent pursuant to Section 8.07(b)(i) above for more than 180 consecutive
days, and (ii) there exists at such time no Default or Event of Default
under any of Section 9.01(a), Section 9.01(f) with respect to the Parent,
the Borrower or any Significant Subsidiary, or Section 9.01(u) hereof, and
(iii) the Lenders or the Administrative Lender have not exercised their
rights under Section 9.02(a) hereof, and (iv) the date of such Restricted
Payment is prior to the Maturity Date,
then the Borrower may declare, make and pay Restricted Payments
constituting Dividends to the Parent in an amount not to exceed the
scheduled cash interest due and payable on the outstanding 1998 Senior
Notes, and
(d) So long as each of the following is true: (i) the Borrower has
been unable to make a Restricted Payment constituting a dividend to the
Parent pursuant to Section 8.07(b)(i) above for more than 180 consecutive
days, and (ii) there exists at such time no Default or Event of Default
under any of Section 9.01(a), Section 9.01(f) with respect to the Parent or
the Borrower, or Section 9.01(u) hereof, and (iii) the Lenders or the
Administrative Lender have not exercised their rights under Section 9.02(a)
hereof, and (iv) the date of such Restricted Payment is prior to the
Maturity Date,
then the Borrower may declare, make and pay Restricted Payments
constituting Dividends to the Parent in an amount not to exceed the
scheduled cash interest due and payable on the outstanding 1997 Senior
Notes, and
(e) The Borrower may make Distributions to the Parent in the amount of
scheduled cash interest payments due and payable by the Parent on the
outstanding 1997 Senior Notes from funds that are in the Interest Reserve
Escrow Account, and
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(f) The Parent may make payments of scheduled cash interest on (i) the
outstanding 1997 Senior Notes (A) to the extent such payments are made from
funds in the Interest Reserve Escrow Account, (B) to the extent the Parent
receives permitted Distributions from the Borrower for such purpose in
accordance with the terms of Sections 8.07(b), (c) and (d) hereof, and (C)
to the extent it receives funds from sources other than the Borrower and
its Subsidiaries, and (ii) the outstanding 1998 Senior Notes to the extent
the Parent (A) receives permitted Distributions from the Borrower for such
purpose in accordance with the terms of Sections 8.07(b) and (c) hereof,
and (B) receives funds from sources other than the Borrower and its
Subsidiaries, and
(g) So long as there exists no Default or Event of Default both before
and after giving effect to any such Restricted Payments, the Borrower may
(i) make scheduled and non-scheduled payments of interest and
principal in compliance with the terms and provisions existing on the
Closing Date on Debt described on Schedule 8.02 hereto, provided that
(A) no such payments shall include any premium or penalty for any
reason, and (B) the Borrower provides Administrative Lender with a pro
forma Compliance Certificate demonstrating that any non-scheduled
payment will not cause a Default or Event of Default during the
following twelve consecutive months; and
(ii) the Borrower may purchase shares of the Borrower's or Parent's
Capital Stock from any Person, provided that the aggregate purchase
price for all such purchases over the term of this Agreement shall not
exceed $5,000,000, and
(h) So long as there exists no Default or Event of Default both before
and after giving effect to any such Restricted Payment, the Parent may
exercise its Optional Redemption Rights for a redemption price (including
charges, accrued interest, expenses and penalties) in the aggregate not in
excess of $85,000,000, and
(i) So long as there exists no Default or Event of Default both before
and after giving effect to any such Restricted Payment, the Borrower may
make the Restricted Payments set forth on Schedule 8.08 hereto.
8.08. Affiliate Transactions. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, at any time engage in any
transaction with an Affiliate, nor make an assignment or other transfer of any
of its assets or Properties to any Affiliate, on terms materially less
advantageous to the Borrower or any Subsidiary of the Borrower than would be the
case if such transaction had been effected with a non-Affiliate, except (a)
those transactions described on Schedule 8.08 hereof, and (b) those immaterial
transactions in amounts less than $10,000 for any one transaction or series of
comparable transactions.
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8.09. Compliance with ERISA. The Borrower shall not, and shall not permit
the Parent or any Subsidiary of the Borrower to, directly or indirectly, or
permit any member of its Controlled Group to directly or indirectly, (a)
terminate any Plan so as to result in any material (in the opinion of the
Majority Lenders) liability to the Borrower or any member of its Controlled
Group, (b) permit to exist any ERISA Event, or any other event or condition
which presents the risk of liability of the Borrower or any member of its
Controlled Group, (c) make a complete or partial withdrawal (within the meaning
of Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability to the Borrower or any member of its Controlled Group, (d) enter into
any new Plan or modify any existing Plan so as to increase its obligations
thereunder except in the ordinary course of business consistent with past
practice which could result in any liability to the Borrower or any member of
its Controlled Group, or (e) permit the present value of all benefit
liabilities, as defined in Title IV of ERISA, under each Plan of the Borrower or
any member of its Controlled Group (using the actuarial assumptions utilized by
the PBGC upon termination of a plan) to exceed the fair market value of Plan
assets allocable to such benefits all determined as of the most recent valuation
date for each such Plan.
8.10. Capital Stock. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to (a) make or permit any transfer,
assignment, distribution, mortgage, pledge or gift of any shares of Pledged
Stock, except to the Borrower or another wholly owned direct or indirect
Subsidiary of the Borrower that has executed an Unlimited Guaranty of the
Obligations and (b) issue any Capital Stock other than (i) up to $125,000,000 in
common stock of the Parent, (ii) stock options and common stock (issued pursuant
to the exercise of any such stock options) pursuant to the 1997 Directors Stock
Option Plan and the 1997 Stock Option Plan of the Parent, (iii) common stock of
the Parent upon the exercise of outstanding options issued by ITC Holding, and
(iv) preferred stock of the Parent (and the common stock into which such
preferred stock will be convertible pursuant to the terms thereof) to SCANA
Communications, Inc. pursuant to an earn-out agreement described in the Offering
Memorandum of the Parent dated May 29, 1997.
8.11. Sale and Leaseback. The Borrower shall not, and shall not permit the
Parent or any Subsidiary of the Borrower to, enter into any arrangement whereby
it sells or transfers any of its assets, and thereafter rents or leases such
assets.
8.12. Sale or Discount of Receivables. The Borrower shall not, and shall
not permit the Parent or any Subsidiary of the Borrower to, directly or
indirectly sell, with or without recourse, for discount or otherwise, any notes
or accounts receivable.
8.13. Limitation on Restrictive Agreements. Except those written agreements
entered into in connection with the 1997 Senior Notes and the 1998 Senior Notes
and in effect on the Effective Date, the Borrower shall not, and shall not
permit the Parent or any Subsidiary of the
70
Borrower to, enter into any indenture, agreement, instrument, financing document
or other arrangement which, directly or indirectly, prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon: (a) the incurrence of indebtedness, (b) the granting of Liens,
(c) the making or granting of Guarantees, (d) the payment of dividends or
Distributions, (e) the purchase, redemption or retirement of any Capital Stock,
(f) the making of loans or advances, (g) transfers or sales of property or
assets (including Capital Stock) by the Parent, the Borrower or any of its
Subsidiaries, (h) the making of Investments, or (h) any change of control or
management.
8.14. Amendment of 1997 Senior Notes and 1998 Senior Notes. The Borrower
shall not, and shall not permit the Parent or any Subsidiary of the Borrower to,
amend, waive or consent to any deviation from any term or provision of any
documentation or agreements relating to the 1997 Senior Notes or the 1998 Senior
Notes.
8.15. The Interest Reserve Escrow Account. The Borrower shall not, and
shall not permit the Parent or any Subsidiary of the Borrower to (i) deposit any
funds into the Interest Reserve Escrow Account except proceeds from the issuance
of the 1997 Senior Notes, and interest accrued on such amounts, (ii) commingle
any amounts in the Interest Reserve Escrow Account with any other funds of the
Parent, the Borrower or any Subsidiaries of the Borrower, or (iii) use the
proceeds of the Interest Reserve Escrow Account for any purpose other than (A)
for a Distribution to the Parent to make cash interest payment that are due and
payable on the 1997 Senior Notes and (B) for certain transaction fees disclosed
to the Administrative Lender in writing and paid on or prior to the Effective
Date, provided, that the Borrower shall be permitted to remove funds from the
Interest Reserve Escrow Account which were intended to secure due and payable
cash interest payments on any 1997 Senior Notes that have been redeemed in
connection with the exercise by the Parent of its Optional Redemption Rights and
in accordance with the terms of that certain Pledge and Security Agreement,
dated June 3, 1997, and the indenture related to the 1997 Senior Notes.
8.16. Name Changes. The Borrower shall not, and shall not permit the Parent
or any Subsidiary of the Borrower to change its name.
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Borrower shall fail to pay any (i) principal payable under any
Loan Paper on the date due; or (ii) any interest, fees or other amounts
payable within three days of the date due;
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(b) Any representation or warranty made or deemed made by any Obligor
(or any of its officers or representatives) under or in connection with any
Loan Paper shall prove to have been incorrect or misleading in any material
respect when made or deemed made;
(c) The Borrower shall fail to perform or observe any term or covenant
contained in Section 7.05 hereof or in Article VIII hereof;
(d) Any Obligor shall fail to perform or observe any other term or
covenant contained in this Agreement or any other Loan Paper, other than
those described in Sections 9.01(a), (b) and (c) above, and such failure
shall not be remedied within thirty days following the earlier of the
Borrower's knowledge of such failure or notice from any Lender of the
occurrence of such failure;
(e) Any of the following shall occur: (i) Any Loan Paper or material
provision thereof shall, for any reason, not be valid and binding on the
Obligor signatory thereto, or not be in full force and effect, or shall be
declared to be null and void; or (ii) the validity or enforceability of any
Loan Paper shall be contested by any Obligor; or (iii) any Obligor shall
deny in writing that it has any or further liability or obligation under
its respective Loan Papers; or (iv) any default or breach under any
provision of any Loan Papers shall continue after the applicable grace
period, if any, specified in such Loan Paper;
(f) Any of the following shall occur: (i) any Obligor shall make an
assignment for the benefit of creditors or be unable to pay its debts
generally as they become due; (ii) any Obligor shall petition or apply to
any Tribunal for the appointment of a trustee, receiver, or liquidator of
it, or of any substantial part of its assets, or shall commence any
proceedings relating to any Obligor under any Debtor Relief Laws; (iii) any
such petition or application shall be filed, or any such proceedings shall
be commenced, against any Obligor, or an order, judgment or decree shall be
entered appointing any such trustee, receiver, or liquidator, or approving
the petition in any such proceedings, and such petition or application
shall be consented to or uncontested by such Obligor, or if contested by
such Obligor, shall not be dismissed within 60 days following the filing of
such petition or application; (iv) any final order, judgment, or decree
shall be entered in any proceedings against any Obligor decreeing its
dissolution; or (v) any final order, judgment, or decree shall be entered
in any proceedings against any Obligor decreeing its split-up which
requires the divestiture of a substantial part of its assets;
(g) Any of the following shall occur: (i) The Borrower or any other
Obligor shall fail to pay any Debt (other than Debt under the Loan Papers)
in an aggregate amount of $1,000,000 or more when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified
72
in the agreement or instrument relating to such Debt; or (ii) the Borrower
or any other Obligor shall fail to perform or observe any term or covenant
contained in any agreement or instrument relating to any such Debt, when
required to be performed or observed, and such failure shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, and can result in acceleration of the maturity of such Debt; or
(iii) any such Debt shall be declared to be due and payable, or required to
be prepaid, mandatorily redeemed or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or
(iv) there shall exist a breach by any Obligor under one or more material
contracts the effect of which could reasonably be expected to cause a
Material Adverse Change;
(h) Any Obligor shall have any final judgment(s) outstanding against
it, and such judgment(s) shall remain unstayed, in effect, and unpaid for
the period of time after which the judgment holder may and may cause the
creation of Liens against or seizure of any of its Property;
(i) Any of the following shall have occurred: (i) Any ERISA Event
shall have occurred with respect to a Plan of the Borrower, and the sum of
the Insufficiency of such Plan and liabilities relating thereto is equal to
or greater than $1,000,000 or (ii) the Parent, the Borrower or any ERISA
Affiliate of the Borrower shall have committed a failure described in
Section 302(f)(l) of ERISA, and the amount determined under Section
302(f)(3) of ERISA is equal to or greater than $1,000,000;
(j) The Parent, the Borrower or any ERISA Affiliate of the Borrower
shall have been notified by the sponsor of a Multiemployer Plan that (A) it
has incurred Withdrawal Liability to such Plan in an amount that exceeds
$1,000,000 or requires payments exceeding $1,000,000 per annum, or (B) such
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if as a result thereof the aggregate annual
contributions to all Multiemployer Plans in reorganization or being
terminated is increased over the amounts contributed to such Plans for the
preceding Plan year by an amount exceeding $1,000,000;
(k) Any Obligor shall be required under any Environmental Law (i) to
implement any remedial, neutralization, or stabilization process or
program, the cost of which could cause a Material Adverse Change, or (ii)
to pay any penalty, fine, or damages in an aggregate amount which could
cause a Material Adverse Change;
(l) Any of the following shall have occurred: (i) Any Property
(whether leased or owned), or the operations conducted thereon by any
Obligor or any current or prior owner or operator thereof (in the case of
real Property), shall violate or have violated any applicable Environmental
Law, if such violation could cause a Material Adverse Change; or (ii) such
Obligor shall not obtain or maintain any License required to be obtained or
filed under any Environmental Law in connection with the use of such
Property and assets, including without
73
limitation past or present treatment, storage, disposal, or release of
Hazardous Materials into the environment, if the failure to obtain or
maintain the same could cause a Material Adverse Change;
(m) Any of the following shall have occurred:
(i) Any Loan Paper shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first
priority Lien in the Collateral purported to be covered thereby
(except as permitted by the terms of this Agreement or consented to by
the Lenders) and such defect is not cured within 5 days of the date
such defect is discovered; or
(ii) Less than 100% of the Capital Stock of (A) the Borrower and
(B) each of the Subsidiaries of the Borrower shall be subject to a
first priority perfected pledge to the Administrative Lender to secure
the Obligations; or
(n) Any of the following shall have occurred: (i) A final
non-appealable order is issued by any Tribunal, including, but not limited
to, the FCC, any applicable PUC, or the United States Justice Department,
requiring any Obligor to divest a substantial portion of its assets
pursuant to any antitrust, restraint of trade, unfair competition, industry
regulation, or similar Laws, or (ii) any Tribunal shall condemn, seize, or
otherwise appropriate, or take custody or control of all or any substantial
portion of the assets of any Obligor;
(o) Any of the following shall have occurred if the effect thereof
could be reasonably expected to cause a Material Adverse Change; (i) Any
License whether presently existing or hereafter granted to or obtained by
the Parent, the Borrower or any Subsidiary of the Borrower shall expire
without renewal or be suspended or revoked, or (ii) the Parent, the
Borrower or any Subsidiary of the Borrower shall become subject to any
injunction or other order affecting or which may affect the Parent's, the
Borrower's or a Subsidiary of the Borrower's present or proposed operations
under any such License;
(p) Any civil action, suit or proceeding shall be commenced against
any Obligor under any federal or state racketeering statute (including,
without limitation, the Racketeer Influenced and Corrupt Organization Act
of 1970)("RICO") and such suit shall be adversely determined by a court of
applicable jurisdiction, and which is either non-appealable or which such
Obligor has elected not to appeal; or any criminal action or proceeding
shall be commenced against any Obligor under any federal or state
racketeering statute (including, without limitation, RICO);
(q) There shall occur a change in Control of the Borrower; or any
third party (other than pursuant to a public offering) owns greater than
20% of the Capital Stock of the Parent
74
(excluding, with respect to management of the Borrower that was part of
management on the Closing Date, Capital Stock of the Borrower owned by such
management;
(r) Any Litigation commenced against any Obligor is adversely
determined by a court of applicable jurisdiction, which such Litigation is
either non-appealable or which such Obligor has elected not to appeal, and
in either case, is reasonably expected to cause a Material Adverse Change;
(s) The Parent, the Borrower or any Subsidiary of the Borrower shall
fail to comply in any respect with the Communications Act, or any rule or
regulation promulgated by the FCC or any applicable PUC, and such failure
could reasonably be expected to cause a Material Adverse Change; or any
License or authorization constituting authorizations, permits or licenses
of the Parent, the Borrower or any Subsidiary of the Borrower material to
the operation of the business of the Parent, the Borrower and its
Subsidiaries, has expired or shall expire without having been renewed or
shall be canceled or impaired and such expiration, cancellation or
impairment could reasonably be expected to cause a Material Adverse Change;
(t) The Parent, the Borrower or any Subsidiary shall fail to operate
its business for any period of time which, in the aggregate, could
reasonably be expected to cause a Material Adverse Change; or
(u) Any Substantial Portion shall not, for any reason (including,
without limitation, loss of FCC License, fiber network or otherwise) be
operating for a period in excess of 30 days. For purposes of this Section
9.01(u), "Substantial Portion" means any portion of the assets or
Properties of the Borrower and its Subsidiaries that has generated, for the
most recently completed twelve month period, in excess of five percent of
the Operating Cash Flow.
9.02. Remedies upon Default. If an Event of Default described in Section
9.01(f) shall occur with respect to any Obligor, the aggregate unpaid principal
balance of and accrued interest on all Advances shall, to the extent permitted
by applicable Law, thereupon become due and payable concurrently therewith,
without any action by Administrative Lender or any Lender, and without
diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby expressly
waived. Subject to the foregoing sentence, if any Event of Default shall occur
and be continuing, Administrative Lender may at its election, do any one or more
of the following:
(a) Declare the entire unpaid balance of all Obligations immediately
due and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to accelerate, or
notice of any other kind (except notices specifically provided for under
Section 9.01 hereof), all of which are hereby expressly waived (except to
the extent waiver of the foregoing is not permitted by applicable Law);
75
(b) Terminate the Commitment;
(c) Reduce any claim of Administrative Lender and Lenders to judgment;
(d) Demand (and the Borrower shall pay to Administrative Lender)
immediately upon demand and in immediately available funds, the amount
equal to the aggregate amount of the Letters of Credit then outstanding,
irrespective of whether such Letters of Credit have been drawn upon, all as
set forth and in accordance with the terms of provisions of Article III
hereof. The Administrative Lender shall promptly advise the Borrower of any
such declaration or demand but failure to do so shall not impair the effect
of such declaration or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law,
including but not limited to the UCC, at equity, or otherwise.
9.03. Cumulative Rights. All Rights available to Administrative Lender and
Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Lender or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers.
9.04. Waivers. The acceptance by Administrative Lender or any Lender at any
time and from time to time of partial payment of any amount owing under any Loan
Papers shall not be deemed to be a waiver of any Default or Event of Default
then existing. No waiver by Administrative Lender or any Lender of any Default
or Event of Default shall be deemed to be a waiver of any Default or Event of
Default other than such Default or Event of Default. No delay or omission by
Administrative Lender or any Lender in exercising any Right under the Loan
Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
under the Loan Papers or otherwise.
9.05. Performance by Administrative Lender or any Lender. Should any
covenant of any Obligor fail to be performed in accordance with the terms of the
Loan Papers, Administrative Lender may, at its option, perform or attempt to
perform such covenant on behalf of such Obligor. Notwithstanding the foregoing,
it is expressly understood that neither Administrative Lender nor any Lender
assumes, and shall not ever have, except by express written consent of
Administrative Lender or such Lender, any liability or responsibility for the
performance of any duties or covenants of any Obligor.
9.06. Expenditures. The Borrower shall reimburse Administrative Lender and
each Lender for any reasonable sums spent by it in connection with the exercise
of any Right under
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Section 9.05 hereof. Such sums shall bear interest at the lesser of (a) the
Base Rate (whether or not in effect), plus 2.00% per annum and (b) the Highest
Lawful Rate, from five days after the date any Lender makes demand to the
Borrower for reimbursement of such amount until the date of repayment by the
Borrower.
9.07. Control. None of the covenants or other provisions contained in this
Agreement shall, or shall be deemed to, give Administrative Lender or any Lender
any Rights to exercise control over the affairs and/or management of any
Obligor, the power of Administrative Lender and each Lender being limited to the
Rights to exercise the remedies provided in this Article; provided, however,
that if Administrative Lender or any Lender becomes the owner of any
partnership, stock or other equity interest in any Person, whether through
foreclosure or otherwise, it shall be entitled to exercise such legal Rights as
it may have by being an owner of such stock or other equity interest in such
Person.
ARTICLE X. THE ADMINISTRATIVE LENDER
10.01. Authorization and Action. Each Lender hereby appoints and authorizes
Administrative Lender to take such action as Administrative Lender on its behalf
and to exercise such powers under this Agreement and the other Loan Papers as
are delegated to the Administrative Lender by the terms of the Loan Papers,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement and the other Loan Papers
(including without limitation enforcement or collection of the Notes),
Administrative Lender shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 11.01 hereof), and
such instructions shall be binding upon all Lenders; provided, however, that
Administrative Lender shall not be required to take any action which exposes
Administrative Lender to personal liability or which is contrary to any Loan
Papers or applicable Law. Administrative Lender agrees to give to each Lender
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement, and to distribute to each applicable Lender in like funds all amounts
delivered to Administrative Lender by the Borrower for the Ratable or individual
account of any Lender. Functions of the Administrative Lender are administerial
in nature and in no event shall the Administrative Lender have a fiduciary or
trustee relationship in respect of any Lender by reason of this Agreement or any
Loan Paper.
10.02. Administrative Lender's Reliance, Etc. Neither Administrative
Lender, nor any of its directors, officers, agents, employees, or
representatives shall be liable for any action taken or omitted to be taken by
it or them under or in connection with this Agreement or any other Loan Paper,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, Administrative Lender (a) may
treat the payee of
77
any Note as the holder thereof until Administrative Lender receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to Administrative Lender; (b) may consult with legal counsel
(including counsel for the Borrower or any of its Subsidiaries), independent
public accountants, and other experts selected by it, and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants, or experts; (c) makes no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, warranties, or representations made in or in connection with
this Agreement or any other Loan Papers; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants, or conditions of this Agreement or any other Loan Papers on the part
of any Obligor or its Subsidiaries or to inspect the Property (including the
books and records) of any Obligor or its Subsidiaries; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, any other
Loan Papers, or any other instrument or document furnished pursuant hereto; and
(f) shall incur no liability under or in respect of this Agreement or any other
Loan Papers by acting upon any notice, consent, certificate, or other instrument
or writing believed by it to be genuine and signed or sent by the proper party
or parties.
10.03. NationsBank of Texas, N.A. and Affiliates. With respect to its
Commitment, its Advances, and any Loan Papers, NationsBank of Texas, N.A. has
the same Rights under this Agreement as any other Lender and may exercise the
same as though it were not Administrative Lender. NationsBank of Texas, N.A. and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, any Obligor,
any Affiliate thereof, and any Person who may do business therewith, all as if
NationsBank of Texas, N.A. were not Administrative Lender and without any duty
to account therefor to any Lender.
10.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Lender or any other
Lender, and based on the financial statements referred to in Section 5.01(j),
Section 7.01 and Section 7.02 hereof and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Papers.
10.05. Indemnification by Lenders. Lenders shall indemnify Administrative
Lender, Pro Rata, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Lender in any way relating to or arising out of
any Loan Papers or any action taken or omitted by Administrative Lender
78
thereunder, including any negligence of Administrative Lender; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from Administrative Lender's gross
negligence or willful misconduct. Without limitation of the foregoing, Lenders
shall reimburse Administrative Lender, Pro Rata, promptly upon demand for any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by
Administrative Lender in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal and other advice in
respect of rights or responsibilities under, the Loan Papers. The indemnity
provided in this Section 10.05 shall survive the termination of this Agreement.
10.06. Successor Administrative Lender. Administrative Lender may resign at
any time by giving written notice thereof to Lenders and the Borrower, and may
be removed at any time with or without cause by the action of all Lenders (other
than Administrative Lender, if it is a Lender). Upon any such resignation or
removal, Majority Lenders shall have the right to appoint a successor
Administrative Lender with the prior written consent of the Borrower (which
shall not be unreasonably withheld), provided that, if there exists an Event of
Default that is continuing, no consent of the Borrower shall be required. If no
successor Administrative Lender shall have been so appointed and shall have
accepted such appointment within thirty days after the retiring Administrative
Lender's giving of notice of resignation, then the retiring Administrative
Lender may, on behalf of Lenders, appoint a successor Administrative Lender,
which shall be a commercial bank organized under the Laws of the United States
of America or of any State thereof and having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of any appointment as Administrative
Lender hereunder by a successor Administrative Lender, such successor
Administrative Lender shall thereupon succeed to and become vested with all the
Rights and duties of the retiring Administrative Lender, and the retiring
Administrative Lender shall be discharged from its duties and obligations under
the Loan Papers, provided that if the retiring or removed Administrative Lender
is unable to appoint a successor Administrative Lender, Administrative Lender
shall, after the expiration of a sixty day period from the date of notice, be
relieved of all obligations as Administrative Lender hereunder. Notwithstanding
any Administrative Lender's resignation or removal hereunder, the provisions of
this Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Lender under this
Agreement.
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ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Papers, nor consent to any departure by the
Borrower or any Obligor therefrom, shall be effective unless the same shall be
in writing and signed by the Borrower and the Administrative Lender with the
consent of the Majority Lenders, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver, or consent shall (and the
result of action or failure to take action shall not) unless in writing and
signed by all of Lenders and Administrative Lender, (a) increase the Commitment,
(b) reduce any principal, interest, fees, or other amounts payable hereunder, or
waive or result in the waiver of any Event of Default under Section 9.01(a)
hereof, (c) postpone any date fixed for any payment of principal, interest,
fees, or other amounts payable hereunder, (d) release any Collateral or
guaranties securing any Obligor's obligations hereunder, other than releases
contemplated hereby and by the other Loan Papers, (e) change the meaning of
"Specified Percentage" or the number of Lenders required to take any action
hereunder, change the definitions of "Commitment", "Maturity Date", "Majority
Lenders", or "Letter of Credit Commitment", or (f) amend this Section 11.01. No
amendment, waiver, or consent shall affect the Rights or duties of
Administrative Lender under any Loan Papers, unless it is in writing and signed
by Administrative Lender in addition to the requisite number of Lenders.
11.02. Notices.
(a) Manner of Delivery. All notices communications and other materials to
be given or delivered under the Loan Papers shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Lender, any Lender or the Borrower has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
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(i) If to the Borrower:
Interstate FiberNet, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
With copies (which shall not constitute notice) to:
ITC_DeltaCom Legal Group
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Esq.
And
▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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(ii) If to Administrative Lender:
NationsBank of Texas, N.A.
NationsBank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
3400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
(iii) If to any Lender, to its address shown opposite its signature
block on the signature pages hereto, or on any Assignment and Acceptance,
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
(d) Effectiveness. Each notice, communication and any material to be given
or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number, (iii) if sent by hand
delivery or overnight courier, when left at the address of the addressee
addressed as above provided, and (iv) if given by telephone, when communicated
to the individual or any member of the department specified as the individual or
department to whose attention notices, communications and materials are to be
given or delivered except that notices of a change of address, telecopier or
telephone number or individual or department to whose attention notices,
communications and materials are to be given or delivered shall not be effective
until received; provided, however, that notices to
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Administrative Lender pursuant to Article II shall be effective when received.
The Borrower agrees that Administrative Lender shall have no duty or obligation
to verify or otherwise confirm telephonic notices given pursuant to Article II,
and agrees to indemnify and hold harmless Administrative Lender and Lenders for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, and expenses resulting, directly or indirectly,
from acting upon any such notice.
11.03. Parties in Interest. All covenants and agreements contained in this
Agreement and all other Loan Papers shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto. Each Lender may from
time to time assign or transfer its interests hereunder pursuant to Section
11.04 hereof. The Borrower may not assign or transfer its Rights or obligations
hereunder without the prior written consent of Administrative Lender.
11.04. Assignments and Participations.
(a) Each Lender (an "Assignor") may assign its Rights and obligations as a
Lender under the Loan Papers to one or more transferees pursuant to an
Assignment and Acceptance, so long as (i) each assignment shall be of a
constant, and not a varying percentage of all Rights and obligations thereunder,
(ii) each Assignor shall obtain in each case the prior written consent of
Administrative Lender and the Borrower, in each case such consent not to be
unreasonably withheld or delayed, provided that, in the event there exists an
Event of Default that is continuing, no consent of the Borrower shall be
required to make an assignment, (iii) each Assignor shall in each case pay a
$3,500 processing fee to Administrative Lender and (iv) no such assignment is
for an amount less than $5,000,000 and in increments $1,000,000 (and, if such
assignment is a partial assignment, no Lender shall hold less than $5,000,000
immediately after giving effect to any assignment). Assignments and other
transfers (except participations) with respect to each Lender's participation in
a given Letter of Credit may only be made with the prior written consent of the
Administrative Lender. Within five Business Days after Administrative Lender
receives notice of any such assignment, the Borrower shall execute and deliver
to Administrative Lender, in exchange for the Notes issued to Assignor, new
Notes to the order of such Assignor and its assignee in amounts equal to their
respective Specified Percentages of the Commitment. Such new Notes shall be
dated the effective date of the assignment. It is specifically acknowledged and
agreed that on and after the effective date of each assignment, the assignee
shall be a party hereto and shall have the Rights and obligations of a Lender
under the Loan Papers.
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(b) Each Lender may sell participations to one or more Persons in all or
any of its Rights and obligations under the Loan Papers; provided, however, that
(i) such Lender's obligations under the Loan Papers shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 11.01(a), (b), (c) and (d) hereof, (v) Obligors, the Administrative
Lender, and other Lenders shall continue to deal solely and directly with such
Lender in connection with their respective Rights and obligations under the Loan
Papers and (vi) no such participation is for an amount less than $5,000,000.
(c) Any Lender may, in connection with any assignment or participation, or
proposed assignment or participation, disclose to the assignee or participant,
or proposed assignee or participant, any information relating to any Obligor
furnished to such Lender by or on behalf of any Obligor.
(d) Notwithstanding any other provision set forth in this Agreement, (i)
any Lender may at any time create a security interest in all or any portion of
its Rights under this Agreement (including, without limitation, the Advances
owing to it and the Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System, (ii) no participant of any Lender may further assign or participate any
of its interest in the Loan Papers to any Person (except as may be required by
Law or a Tribunal having authority over such participant), and (iii) no Lender
(other than NationsBank of Texas, N.A.) may assign any of its interest in the
Loan Papers to any Person (except as may be required by Law or a Tribunal having
authority over NationsBank of Texas, N.A.).
11.05. Sharing of Payments. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any Right of set-off, or
otherwise) on account of its Advances in excess of its Pro Rata share of
payments made by the Borrower, such Lender shall forthwith purchase
participations in Advances made by the other Lenders as shall be necessary to
share the excess payment Pro Rata with each of them; provided, however, that if
any of such excess payment is thereafter recovered from the purchasing Lender,
its purchase from each Lender shall be rescinded and each Lender shall repay the
purchase price to the extent of such recovery together with a Pro Rata share of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 11.05
may, to the fullest extent permitted by Law, exercise all its Rights of payment
(including the Right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
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11.06. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by Law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement and the other Loan
Papers, whether or not Administrative Lender or any Lender shall have made any
demand under this Agreement or the other Loan Papers, and even if such
obligations are unmatured. Each Lender shall promptly notify the Borrower after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The Rights of
each Lender under this Section 11.06 are in addition to other Rights (including,
without limitation, other Rights of set-off) which such Lender may have.
11.07. Costs, Expenses, and Taxes.
(a) Notwithstanding anything to the contrary in the Loan Papers, the
Borrower agrees to pay on demand (i) all costs and expenses of Administrative
Lender in connection with the preparation and negotiation of all Loan Papers,
including without limitation the reasonable fees and out-of-pocket expenses of
Special Counsel, (ii) all costs and expenses (including reasonable attorneys'
fees and expenses) of Administrative Lender in connection with any
interpretation, grant and perfection of any Lien, modification, amendment,
waiver, release of any Loan Papers, restructuring or work-out and (iii) all
costs and expenses (including reasonable attorneys' fees and expenses) of
Administrative Lender and each Lender in connection with any collection of any
portion of the Obligations or the enforcement of any Loan Papers during the
continuance of an Event of Default.
(b) In addition, notwithstanding anything to the contrary in the Loan
Papers, the Borrower shall pay any and all stamp, debt, and other Taxes payable
or determined to be payable in connection with any payment hereunder (other than
Taxes on the overall net income of Administrative Lender or any Lender or
franchise Taxes or Taxes on capital or capital receipts of Administrative Lender
or any Lender), or the execution, delivery, or recordation of any Loan Papers,
and agrees to save Administrative Lender and each Lender harmless from and
against any and all liabilities with respect to, or resulting from any delay in
paying or omission to pay any Taxes in accordance with this Section 11.07,
including any penalty, interest, and expenses relating thereto. All payments by
the Borrower or any Subsidiary of the Borrower under any Loan Papers shall be
made free and clear of and without deduction for any present or future Taxes
(other than Taxes on the overall net income of Administrative Lender or any
Lender of any nature now or hereafter existing, levied, or withheld, or
franchise Taxes or Taxes on capital or capital receipts of Administrative Lender
or any Lender), including all interest, penalties, or similar liabilities
relating thereto. If the Borrower shall be required by Law to deduct or to
withhold any Taxes from or in respect of any amount payable hereunder (i) the
amount so
85
payable shall be increased to the extent necessary so that, after making all
required deductions and withholdings (including Taxes on amounts payable to
Administrative Lender or any Lender pursuant to this sentence), Administrative
Lender or any Lender receives an amount equal to the sum it would have received
had no such deductions or withholdings been made, (ii) the Borrower shall make
such deductions or withholdings, and (iii) the Borrower shall pay the full
amount deducted or withheld to the relevant taxing authority in accordance with
applicable Law. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.07 shall survive the execution of this Agreement, termination of
the Commitment, repayment of the Obligations, satisfaction of each agreement
securing or assuring the Obligations and termination of this Agreement and each
other Loan Paper.
11.08. Rate Provision. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall any Obligor or any other Person be
obligated to pay any amount in excess of the Maximum Amount. If Administrative
Lender or any Lender ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Borrower or the other Person
entitled thereto. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, each Obligor,
Administrative Lender and each Lender shall, to the maximum extent permitted
under Applicable Laws, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Lender or Lenders, as appropriate, shall refund to the Borrower
the amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Lender nor
any Lender shall be subject to any penalties provided by any Laws for
contracting for, charging or receiving interest in excess of the Maximum Amount.
This Section 11.08 shall control every other provision of all agreements among
the parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
11.09. Severability. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or
86
unenforceable provision had never comprised a part thereof, and the remaining
provisions thereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision there shall be added automatically as a part of such Loan Paper a
legal, valid, and enforceable provision as similar in terms to the illegal,
invalid, or unenforceable provision as may be possible.
11.10. Exceptions to Covenants. No Obligor shall be deemed to be permitted
to take any action or to fail to take any action that is permitted as an
exception to any covenant in any Loan Papers, or that is within the permissible
limits of any covenant, if such action or omission would result in a violation
of any other covenant in any Loan Papers.
11.11. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE
CONTRACTS MADE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER
JURISDICTION, THE BORROWER AGREES THAT THE FEDERAL COURTS OF TEXAS LOCATED IN
DALLAS, TEXAS, WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT
THAT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT,
CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE
OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
(b) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON
IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL.
NOTHING IN THIS SECTION 11.12 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE LENDER OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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11.13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
11.14. Amendment, Restatement, Extension and Renewal. This Agreement is a
renewal, extension, amendment and restatement of the Original Credit Agreement,
and, as such, except for the "Obligations" as defined in the Original Credit
Agreement (which shall survive, be renewed, extended and restated by the terms
of this Agreement), all other terms and provisions supersede in their entirety
the Original Credit Agreement. All subordination agreements, security
agreements, pledge agreements, mortgages, deeds of trust and other documents and
instruments granting any security interest or assigning any interest in any
assets of the Borrower or any Subsidiary of the Borrower or the Parent to secure
the Obligations executed and delivered in connection with the Original Agreement
(the "Original Security Documents") shall remain valid, binding and enforceable
Liens against the Borrower, the Subsidiaries of the Borrower, the Parent and
each of the other Persons granting any such Liens and/or executing any such
agreements.
===============================================================================
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, this First Amended and Restated Credit Agreement is
executed as of the date first set forth above.
THE BORROWER:
INTERSTATE FIBERNET, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Senior Vice President -- Chief
Financial Officer
ADMINISTRATIVE LENDER:
NATIONSBANK OF TEXAS, N.A., as
Administrative Lender
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
LENDERS:
Specified Percentage: 100% NATIONSBANK OF TEXAS, N.A.,
individually as a Lender
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Its: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
89