Exhibit 10.3
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BRIDGE FINANCING AGREEMENT
dated as of
August 1, 2000
among
CHOICE ONE COMMUNICATIONS INC.
THE LENDERS PARTY HERETO
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
as Administrative Agent
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
as Arranger and Book Runner
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
Section 1.01 Defined Terms.............................................. 1
Section 1.02 Terms Generally............................................ 17
Section 1.03 Accounting Terms; Changes in GAAP.......................... 18
ARTICLE 2
THE CREDITS
Section 2.01 Commitments................................................ 18
Section 2.02 The Loans.................................................. 18
Section 2.03 Request to Borrow.......................................... 19
Section 2.04 Funding; Deposit Into Escrow Account....................... 19
Section 2.05 Interest Elections......................................... 20
Section 2.06 Termination and Reduction of Commitments................... 21
Section 2.07 Repayment of Loans at Maturity; Evidence of Debt........... 22
Section 2.08 Optional and Mandatory Prepayments......................... 23
Section 2.09 Fees....................................................... 24
Section 2.10 Interest and Accreted Value................................ 24
Section 2.11 Alternate Rate of Interest................................. 26
Section 2.12 Increased Costs............................................ 26
Section 2.13 Taxes...................................................... 27
Section 2.14 Break Funding Payments..................................... 28
Section 2.15 Payments Generally; Pro Rata Treatment; Sharing of Set-offs 28
Section 2.16 Lender's Obligation to Mitigate; Replacement of Lenders.... 30
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01 Organization; Powers....................................... 31
Section 3.02 Authorization; Enforceability.............................. 31
Section 3.03 Governmental Approvals; No Conflicts....................... 31
Section 3.04 Financial Condition; No Material Adverse Change............ 31
Section 3.05 Properties................................................. 32
Section 3.06 Litigation and Environmental Matters....................... 32
Section 3.07 Compliance with Laws and Agreements........................ 33
Section 3.08 Investment and Holding Company Status...................... 33
Section 3.09 Taxes...................................................... 34
Section 3.10 ERISA...................................................... 34
Section 3.11 Disclosure................................................. 35
Section 3.12 Subsidiaries............................................... 35
Section 3.13 Insurance.................................................. 35
Section 3.14 Labor Matters.............................................. 35
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Section 3.15 No Burdensome Restrictions................................ 36
Section 3.16 Solvency.................................................. 36
Section 3.17 Communications Regulatory Matters......................... 36
Section 3.18 Representations and Warranties in the Merger Agreement
and the Senior Facility Documents......................... 37
ARTICLE 4
CONDITIONS
Section 4.01 Effective Date............................................ 37
Section 4.02 Conditions to Borrowing................................... 39
ARTICLE 5
AFFIRMATIVE COVENANTS
Section 5.01 Financial Statements and Other Information................ 40
Section 5.02 Notices of Material Events................................ 42
Section 5.03 Existence; Conduct of Business............................ 43
Section 5.04 Performance and Payment of Obligations.................... 43
Section 5.05 Maintenance of Properties................................. 43
Section 5.06 Books and Records; Inspection and Audit Rights............ 43
Section 5.07 Compliance with Laws and Licences......................... 43
Section 5.08 Use of Proceeds........................................... 43
Section 5.09 Additional Subsidiaries................................... 44
Section 5.10 Insurance................................................. 44
Section 5.11 Interest Rate Protection.................................. 44
ARTICLE 6
NEGATIVE COVENANTS
Section 6.01 Debt; Certain Equity Securities; Lease Obligations........ 44
Section 6.02 Liens..................................................... 46
Section 6.03 Fundamental Changes....................................... 47
Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. 47
Section 6.05 Asset Sales............................................... 48
Section 6.06 Sale and Leaseback Transactions........................... 49
Section 6.07 Restricted Payments; Certain Payments of Debt............. 49
Section 6.08 No Change in Accounting Policies.......................... 50
Section 6.09 Transactions with Affiliates.............................. 50
Section 6.10 Restrictive Agreements.................................... 50
Section 6.11 Amendment of Material Documents........................... 50
Section 6.12 Capital Expenditures...................................... 51
ARTICLE 7
EVENTS OF DEFAULT
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ARTICLE 8
THE ADMINISTRATIVE AGENT
Section 8.01 Appointment and Authorization................................ 54
Section 8.02 Rights and Powers as a Lender................................ 55
Section 8.03 Limited Duties and Responsibilities.......................... 55
Section 8.04 Authority to Rely on Certain Writings, Statements and Advice. 55
Section 8.05 Sub-Agents and Related Parties............................... 56
Section 8.06 Resignation; Successor Administrative Agent.................. 56
Section 8.07 Credit Decisions by Lenders.................................. 56
ARTICLE 9
MISCELLANEOUS
Section 9.01 Notices...................................................... 56
Section 9.02 Waivers; Amendments.......................................... 57
Section 9.03 Expenses; Indemnity; Damage Waiver........................... 58
Section 9.04 Successors and Assigns....................................... 59
Section 9.05 Survival..................................................... 61
Section 9.06 Counterparts................................................. 61
Section 9.07 Severability................................................. 61
Section 9.08 Right of Setoff.............................................. 61
Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process... 62
Section 9.10 WAIVER OF JURY TRIAL......................................... 62
Section 9.11 Headings..................................................... 63
Section 9.12 Confidentiality.............................................. 63
SCHEDULES:
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Schedule 1.01 - Senior Facility Borrowers
Schedule 2.01 - Commitment Schedule
Schedule 3.06 - Disclosed Matters
Schedule 3.10 - ERISA
Schedule 3.12 - Subsidiaries
Schedule 3.17 - Communications Regulatory Matters
Schedule 5.10 - Insurance
Schedule 6.01 - Existing Indebtedness
Schedule 6.01 - Existing Liens
Schedule 6.04 - Existing Investments
EXHIBITS:
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Exhibit A - Form of Assignment
Exhibit B - Form of Escrow Agreement
Exhibit C - Form of Note
Exhibit D - Form of Opinion of Borrower's Counsel
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BRIDGE FINANCING AGREEMENT dated as of August 1, 2000 among CHOICE ONE
COMMUNICATIONS INC., the LENDERS party hereto, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR
FUNDING, INC. as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"Accreted Value" of any outstanding Rollover Loan as of any date of
determination thereof (each, a "determination date") means an amount equal to
(i) the Accreted Value of such Rollover Loan as of the Accretion Date most
recently ended prior to such determination date (or, if such no Accretion Date
has occurred on or prior to such determination date, the Initial Accreted Value
with respect to such Rollover Loan) plus (ii) an amount equal to the interest
that shall have accrued on the Accreted Value of such Rollover Loan (as in
effect on the Accretion Date most recently ended prior to such determination
date) (or Initial Accreted Value, as the case may be) from and including the
Accretion Date most recently ended prior to such determination date (or, if such
no Accretion Date has occurred on or prior to such determination date, the
Rollover Borrowing Date) to but excluding such determination date at a rate per
annum equal to the Accretion Rate.
"Accretion Date" means, (i) initially, the date that falls six months after
the Rollover Borrowing Date and the date that falls twelve months after the
Rollover Borrowing Date and (ii) thereafter, each anniversary of each date
described in clause (i) that falls on or prior to the Reset Date.
"Accretion Rate" means an interest rate per annum equal to the sum of (x)
the interest rate that is (or would be) applicable on the Rollover Borrowing
Date to any Bridge Loans that are Eurodollar Loans on such date plus (y) 2.5%;
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provided that such interest rate will in no event be greater than 19.5%.
"Acquisition" means the acquisition by Barter Acquisition Corporation, a
wholly-owned subsidiary of the Borrower, of 100% of the capital stock of the
Target pursuant to the Merger Agreement.
"Acquisition Date" means the date of consummation of the Acquisition.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Adjustment.
"Administrative Agent" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. in its
capacity as administrative agent for the Lenders under the Loan Documents.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with such specified Person.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate will be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Bridge Rate" means for any day, with respect to any Bridge Loan
of any Interest Type, the rate per annum set forth below in the column for such
Interest Type opposite the period in which such day falls:
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Base Rate Euro Dollar
Period Bridge Loan Bridge Loan
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Effective Date-9/30/00 5.75% 7%
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10/1/00-12/31/00 6.25% 7.50%
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1/1/01-3/31/01 6.75% 8%
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Thereafter 7.25% 8.50%
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; provided that the "Applicable Bridge Rate" on any day with respect to any
Bridge Loan of any Interest Type shall not exceed 17% per annum.
"Approved Budget" means the annual budgets the Borrower and its
Subsidiaries prepared in accordance with the Transaction Agreement, and approved
by the Board of Directors of the Borrower pursuant thereto.
"Assignment" means an assignment and assumption agreement entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04(a)), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
"Base Rate", when used with respect to any Bridge Loan or Bridge Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Borrower" means Choice One Communications Inc., a Delaware corporation,
and its successors.
"Borrower Common Stock" has the meaning set forth in Section 4.01(d).
"Borrower Leverage Ratio" means with respect to the Borrower and its
Subsidiaries on a Consolidated basis as of the last day of any fiscal quarter,
the ratio of (a) Total Debt thereof as of such date to (b) EBITDA thereof for
the six-month period ending on such date times two (2).
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"Borrowing" means Loans of the same Interest Type made, converted or
continued on the same day and, in the case of Eurodollar Loans, as to which the
same Interest Period is in effect.
"Borrowing Date" means either the Bridge Borrowing Date or the Rollover
Borrowing Date, as applicable.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Bridge Borrowing Date" means the date on which the Bridge Loans are made.
"Bridge Commitment" means, with respect to each Lender, the commitment of
such Lender to make a Bridge Loan, expressed as an amount representing the
maximum principal amount of the Bridge Loans to be made by such Lender hereunder
pursuant to Section 2.01(a), as such commitment may be (a) reduced from time to
time pursuant to Section 2.06 and (b) reduced or increased from time to time
pursuant to Assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Bridge Commitment is set forth on Schedule 2.01,
or in the Assignment pursuant to which such Lender shall have assumed its
initial Bridge Commitment, as applicable. The initial aggregate amount of the
Bridge Commitments is $180,000,000.
"Bridge Loan Borrowing" means a Borrowing comprised of Bridge Loans.
"Bridge Loans" has the meaning set forth in Section 2.01(a).
"Bridge Maturity Date" means the earlier of (i) the first anniversary of
the Bridge Borrowing Date and (ii) November 30, 2001.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Business Plan" means each of the business plans for the Borrower and the
Subsidiaries prepared on a city-by-city basis in accordance with the Transaction
Agreement and approved by the Board of Directors.
"Capital Expenditures" means, with respect to any specified Person and its
Subsidiaries for any period, the aggregate cost of all PP&E acquired by such
Person and/or its Subsidiaries during such period, less capitalized labor, each
as determined in accordance with GAAP.
"Capital Lease Obligations" of any Person means obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required under GAAP to be classified and accounted for as
capital leases on a balance sheet of such Person. The amount of such
obligations will be the capitalized amount thereof determined in accordance with
GAAP.
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"Change in Control" means any event resulting in (a) any person or group of
persons (within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended) other than MSDWCP or the Management Members obtaining
ownership or control in one or more series of transactions of more than twenty-
five percent (25%) of the common stock or other voting securities or control of
the board of directors of the Borrower or (b) except as otherwise permitted
herein, any Choice One Company no longer being a Wholly-Owned Subsidiary of the
Borrower or any such Person being party to any agreement which contemplates that
it shall not be such a Wholly-Owned Subsidiary or (c) an occurrence under the
Preferred Equity Documents or under any indenture or other instrument evidencing
any Debt in excess of $2,000,000 of any "change in control" (as defined in the
Preferred Equity Documents or in such indenture or other evidence of Debt)
obligating the Borrower or any Choice One Company to repurchase, redeem or repay
all or any part of the Debt or capital stock provided for therein.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
such date or (c) compliance by any Lender (or, for purposes of Section 2.12(b),
by any lending office of such Lender or by such Lender's holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after such date.
"Choice One Companies" means the Borrower and its Subsidiaries (including
the Target and its Subsidiaries).
"CLEC" means a competitive local exchange carrier under applicable
Communications Law.
"Commitment" means a Bridge Commitment or a Rollover Commitment, as the
context may require, and "Commitments" means all of them.
"Communications Law" means the Communications Act of 1934, as amended, and
all rules and regulations thereunder, or any successor statute or statutes
thereto (including, without limitation, the Telecommunications Act of 1996) and
all rules and regulations thereunder, and all rules and regulations of the FCC,
any applicable PUC or any other applicable Governmental Authority related to the
provision of telecommunication or broadcast services, each as amended or
supplemented from time to time.
"Communications License" means any license for the provision of CLEC
telephony service, and any other license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued by
FCC or other applicable Governmental Authority, including, without limitation,
any PUC Authorization and any of the foregoing authorizing or permitting the
acquisition, construction or operation of Network Facilities or any other system
for the provision of CLEC telephony service.
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
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"Control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Debt" of any Person means, without duplication, the sum of the following
calculated in accordance with GAAP: (a) all liabilities, obligations and
indebtedness for borrowed money including but not limited to obligations
evidenced by bonds, debentures, notes or other similar instruments of any such
Person, (b) all obligations to pay the deferred purchase price of property or
services of any such Person (including, without limitation, all obligations
under non-competition agreements), except for trade payables arising in the
ordinary course of business not more than ninety (90) days past due and except
for all obligations in respect of an IRU, (c) all Capital Lease Obligations of
any such Person, (d) all Debt of any other Person secured by a Lien on any asset
of any of the Borrower and its Subsidiaries, as applicable, (e) all Guarantees
of any such Person, except for Guarantees in an amount not to exceed $1,000,000
to secure payment or performance of customer service contracts incurred in the
ordinary course of business, (f) all obligations, contingent or otherwise, of
any such Person relative to the face amount of letters of credit, whether or not
drawn, including without limitation any Reimbursement Obligation, and banker's
acceptances issued for the account of any such person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities of such Person and (h)
all net termination payments (or other net obligations) owed by any such Person
pursuant to Hedging Agreements.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.
"Discount" has the meaning set forth in Section 2.07(f).
"Dollars" or "$" refers to lawful money of the United States.
"DSL" means technology which permits broadband transmission over copper
telephone lines, allowing for the provision of high speed data services.
"EBITDA" means, with respect to any specified Person and its Subsidiaries,
for any period, the sum of the following determined on a Consolidated basis,
without duplication, in accordance with GAAP: (a) Net Income for such period
plus (b) the sum of the following to the extent deducted in determining Net
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Income: (i) income and franchise taxes, (ii) Interest Expense, (iii)
amortization, depreciation and other non-cash charges less (c) (i) capitalized
labor, (ii) interest income and (iii) any extraordinary gains. EBITDA shall be
adjusted in a manner reasonably satisfactory to the Administrative Agent to
include, on a pro forma basis, as of the first day of any calculation period any
acquisition consummated during such period in accordance with this Agreement and
exclude, on a pro forma basis, as of the first day of any calculation period any
Subsidiary or assets sold in accordance with this Agreement during such period.
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"Effective Date" means the date on which each of the conditions specified
in Section 4.01 is satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, the preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or health
and safety matters.
"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower or any Subsidiary, is treated as a single
employer under Section 414(b) or (c) of the Internal Revenue Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Internal Revenue Code,
is treated as a single employer under Section 414 of the Internal Revenue Code.
"Escrow Account" has the meaning set forth in the Escrow Agreement.
"Escrow Agent" means the Person acting as escrow agent under the Escrow
Agreement, which Person shall be reasonably satisfactory to the Administrative
Agent.
"Escrow Agreement" means the Escrow Agreement dated as of the Bridge
Borrowing Date between the Borrower and the Escrow Agent, substantially in the
form of Exhibit B, as amended from time to time.
"Eurodollar", when used with respect to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Events of Default" has the meaning specified in Article 7.
"Excluded Taxes" means, with respect to any Lender Party or other recipient
of a payment made by or on account of any obligation of the Borrower hereunder:
(a) income or franchise taxes imposed on (or measured by) its net income by
the United States, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located;
(b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction described in clause (a) above; and
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(c) in the case of a Foreign Lender, any withholding tax that (i) is in
effect and would apply to amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement or designates a new
lending office or (ii) is attributable to such Foreign Lender's failure to
comply with Section 2.13(e).
Notwithstanding the foregoing, a withholding tax will not be an "Excluded Tax"
to the extent that (A) it is imposed on amounts payable to a Foreign Lender by
reason of an assignment made to such Foreign Lender at the Borrower's request
pursuant to Section 2.16(b), (B) it is imposed on amounts payable to a Foreign
Lender by reason of any other assignment and does not exceed the amount for
which the assignor would have been indemnified pursuant to Section 2.13 or (C)
in the case of designation of a new lending office, it does not exceed the
amount for which such Foreign Lender would have been indemnified if it had not
designated a new lending office.
"Existing Target Notes" means the Target's 15% Senior Notes due 2008, in
the aggregate face amount of $200,000,000.
"FCC" means the Federal Communications Commission or any successor
Governmental Authority.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on such Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction outside the United States.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
consolidated Subsidiaries delivered to the Lenders.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive,
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legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Debt or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Debt or other obligation; provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business..
"Hazardous Substances" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower or any Subsidiary, and any
confirming letter executed pursuant to such hedging agreement, all as amended,
restated or otherwise modified.
"Incremental Senior Facility Debt" means Senior Facility Debt but only if,
and solely to the extent that, after giving effect to the incurrence of any such
Debt, the principal amount of such Debt (including any Reimbursement
Obligations) exceeds $350,000,000.
"Indemnified Taxes" means all Taxes except Excluded Taxes.
"Initial Accreted Value" means, with respect to each Rollover Loan, the
principal amount of such Rollover Loan on the Rollover Borrowing Date.
"Interest Expense" means, for any period, total interest expense
(including, without limitation, interest expense attributable to Capital Lease
Obligations and plus all net payment obligations pursuant to Hedging Agreements)
determined on a consolidated basis, without duplication, for any specified
Person and its Subsidiaries in accordance with GAAP.
"Interest Payment Date" means (a) with respect to any Base Rate Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part.
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"Interest Period" means, (i) with respect to any Eurodollar Bridge Loan
Borrowing, the period beginning on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is three months
thereafter and (ii) with respect to any Rollover Loan Borrowing, the period
beginning on the Reset Date and ending on the numerically corresponding day in
the calendar month that is three months thereafter; provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next Business Day, (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period, (c) any Interest Period that begins prior to the
Bridge Maturity Date and would otherwise end after the Bridge Maturity Date
shall end on the Bridge Maturity Date and (d) any Interest Period that begins
after the Reset Date and would otherwise end after the Rollover Maturity Date
shall end on the Rollover Maturity Date. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be deemed to be the effective date of the most recent
conversion or continuation of such Borrowing.
"Interest Type", when used with respect to any Bridge Loan or Bridge Loan
Borrowing or Rollover Borrowing on or after the Reset Date, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"IRU" means a noncancellable indefeasible right of use to, or in capacity
in, telecommunications bandwidth (or similar network bandwidth), related
equipment or other Telecommunications Equipment, or any other right
substantially similar to the foregoing.
"Lender Parties" means the Lenders and the Administrative Agent.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment, other than any
such Person that ceases to be a party hereto pursuant to an Assignment.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days before the beginning of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. If such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of the
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Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days before the
beginning of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Escrow Agreement, the Notes and
the Registration Rights Agreement.
"Loans" the Bridge Loans and the Rollover Loans.
"Lucent Agreement" means the General Agreement Number LNM980612RMCO,
effective as of July 17, 1998, by and between the Borrower and Lucent
Technologies Inc., as amended.
"Management Members" shall have the meaning assigned thereto in the
Transaction Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
properties, business, operations, prospects or condition, financial or
otherwise, of the Choice One Companies taken as a whole, or (b) the ability of
the Borrower to perform any of its obligations under any Loan Document.
"Material Debt" means Debt (other than obligations in respect of the
Loans), of any one or more Choice One Companies in an aggregate principal amount
exceeding $2,000,000.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Merger Agreement" means the Agreement and Plan of Merger dated as of May
14, 2000, by and among the Borrower, Barter Acquisition Corporation, a wholly-
owned Subsidiary of the Borrower, the Target and the Seller.
"MSDWCP" means, collectively, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Partners III, L.P.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Investors, L.P., MSCP III 892 Investors, L.P., ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital Partners IV, L.P., MSDW IV 892 Investors, L.P.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital Investors IV, L.P. and any private equity
investment fund or similar entity managed by any of the Affiliates of any of the
foregoing.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means, with respect to any specified Person and its
Subsidiaries for any period, the net income (or loss) of such Persons for such
period calculated on a Consolidated
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basis in accordance with GAAP; provided, that there shall be excluded from net
income (or loss): (a) the income (or loss) of any other Person (other than a
Wholly-Owned Subsidiary of such first Person) in which such first Person or
Subsidiary thereof has an ownership interest unless received by such first
Person or Subsidiary in a cash distribution and (b) the income (or loss) of any
other Person accrued prior to the date it became a Subsidiary or is merged into
or consolidated with such first Person or Subsidiary.
"Net Proceeds" means, as applicable, (a) with respect to any sale or other
disposition of assets (other than any such disposition referred to in clause
(c)), the gross cash proceeds received by the Borrower or any of its
Subsidiaries from such sale or other disposition less the sum of (i) all income
taxes and other taxes assessed or estimated by such Persons (with such amount
approved by the Administrative Agent) to be assessed by a Governmental Authority
as a result of such sale and any other fees and expenses incurred in connection
therewith and (ii) the principal amount of, premium, if any, and interest on any
Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is
required to be repaid in connection with such sale or other disposition, (b)
with respect to any offering of capital stock or issuance of Debt, the gross
cash proceeds received by the Borrower or any of its Subsidiaries therefrom less
all legal, underwriting and other fees and expenses incurred in connection
therewith and (c) with respect to any payment under an insurance policy or in
connection with a condemnation proceeding, the amount of cash proceeds received
by the Borrower or its Subsidiaries from an insurance company or Governmental
Authority, as applicable, net of all expenses of collection.
"Network Facility" means the switches and network of digital and analog
facilities owned or leased by the Borrower or any of its Subsidiaries for use in
the provision of CLEC telephony services.
"Note" means any promissory note of the Borrower substantially in the form
of Exhibit C.
"Other Taxes" means any and all present or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Participants" has the meaning specified in Section 9.04(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permanent Financing" means any Debt of the Borrower consisting of publicly
or privately placed notes, debentures, bonds or other debt securities (including
without limitation Debt convertible into capital stock of the Borrower) and any
Equity Interests of the Borrower (including without limitation any preferred
Equity Interests of the Borrower convertible into common stock of the Borrower).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
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"Plan" means any employee pension benefit plan (except a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the
Internal Revenue Code and which (a) is maintained for employees of the Borrower
or any ERISA Affiliates or (b) has at any time within the preceding six years
been maintained for the employees of the Borrower or any of their current or
former ERISA Affiliates.
"PP&E" means with respect to any specified Person and its Subsidiaries as
of any date of determination, the gross property, plant and equipment (including
capitalized labor) thereof as of such date determined on a Consolidated basis in
accordance with GAAP.
"Preferred Equity" means the Series A Senior Cumulative Stock issued by the
Borrower pursuant to the Preferred Equity Documents.
"Preferred Equity Documents" means the Preferred Equity Purchase Agreement
and all of the documents referred to therein, including without limitation, the
provisions of the articles of incorporation or other charter documents of the
Borrower designating the terms of the Preferred Equity.
"Preferred Equity Purchase Agreement" means the Securities Purchase
Agreement, dated as of August 1, 2000 by and between the Company and the
applicable signatories listed in the definition of MSDWCP.
"Prepayment Event" means:
(a) any receipt of Tax refunds, proceeds from the termination of a Plan,
indemnity payments and other similar cash receipts not generated in the ordinary
course of business;
(b) the issuance by any Choice One Company of any Equity Interest
(including pursuant to a Permanent Financing) or the receipt by any Choice One
Company of any capital contribution, other than (i) any such issuance of an
Equity Interest to, or receipt of any such capital contribution from, a Choice
One Company, (ii) the issuance of the Preferred Equity on the Effective Date,
(iii) the issuance of stock options or warrants exercisable for capital stock of
any Choice One Company to any director, officer or employee of any Choice One
Company in connection with such Person's employment or hire after the Effective
Date, and (iv) the issuance of capital stock of any Choice One Company upon the
exercise of any stock options or warrants held by any director, officer or
employee of any Choice One Company, so long as (x) in the cases of clauses (iii)
and (iv), such stock options or warrants are granted or issued pursuant to a
plan or other employment agreement duly approved by the board of directors of
the relevant Choice One Company and (y) the aggregate Net Proceeds from all
issuances described in clauses (iii) and (iv) do not exceed $2,000,000; and
(c) the incurrence by any Choice One Company of any Debt (including
pursuant to a Permanent Financing), other than Debt permitted pursuant to
Section 6.01 (except any such Debt that constitutes Incremental Senior Facility
Debt).
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by First Union National Bank as its prime rate. Each change in the
Prime Rate will be effective
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for purposes hereof from and including the date such change is publicly
announced as being effective.
"PUC" means any state, provincial or other local regulatory agency or body
that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Network Facility or telephony system or over
Persons who own, construct or operate a Network Facility or any such system, in
each case by reason of the nature or type of the business subject to regulation
and not pursuant to laws and regulations of general applicability to Persons
conducting business in any such jurisdiction.
"PUC Authorizations" means all applications, filings, reports, documents,
recordings and registrations with, and all validations, exemptions, franchises,
waivers, approvals, orders or authorizations, consents, licenses, certificates
and permits from, any PUC.
"Register" has the meaning specified in Section 9.04.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of the Rollover Borrowing Date between the Borrower and the
Administrative Agent entered into pursuant to Section 4.02(g), as amended from
time to time.
"Regulated Activity" means any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance.
"Reimbursement Obligation" means the obligation of the Subsidiaries to
reimburse First Union Securities, Inc. for amounts drawn under the letters of
credit pursuant to the Senior Facility Documents.
"Related Fund" means, with respect to any Lender (or proposed assignee
which becomes a Lender pursuant to Section 9.06) that is a fund that invests in
bank loans, any other fund that invests in bank loans and is advised or managed
by the same investment advisor as such Lender, or by any Affiliate of such
Lender or investment advisor.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and its Affiliates.
"Release" means any discharge, emission or release, including a Release as
defined in CERCLA at 42 U.S.C. Section 9601(22). The term "Released" has a
corresponding meaning.
"Replacement Equity" means any Equity Interests the Net Proceeds of which
are utilized to redeem in full the Preferred Equity and the terms and conditions
of which are reasonably satisfactory to the Administrative Agent and the
Required Lenders.
"Reset Date" means the fourth anniversary of the Rollover Borrowing Date.
"Required Lenders" means, at any time, that group of lenders representing
more than 50.1 % of the sum of all outstanding Loans.
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"Responsible Officer" means any of the following: the chief executive
officer, chief financial officer or vice president of finance of the Company, or
any other officer thereof reasonably acceptable to the Administrative Agent.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interest in any
Choice One Company, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
(i) any Equity Interest in any Choice One Company or (ii) any option, warrant or
other right to acquire any such Equity Interest.
"Rollover Borrowing Date" means the date on which the Rollover Loans are
made.
"Rollover Commitment" means, with respect to each Lender, on the Rollover
Borrowing Date, the commitment of such Lender to make a Rollover Loan in a
principal amount not to exceed an amount equal to (i) the aggregate principal
amount of the Bridge Loans of such Lender outstanding on the Bridge Maturity
Date plus (ii) such Lender's pro rata share of any rollover fees payable
pursuant to Section 2.09(b) that the Borrower, at its option, shall have elected
to pay through Rollover Loans (which share shall be determined on the basis of
the principal amount of the Bridge Loans of each Lender outstanding on the
Bridge Maturity Date).
"Rollover Loan Borrowing" means a Borrowing comprised of Rollover Loans.
"Rollover Loans" has the meaning set forth in Section 2.02(b).
"Rollover Maturity Date" means the date which falls on the ninth
anniversary of the Rollover Borrowing Date.
"S&P" means Standard & Poor's.
"Seller" means the shareholder of Target.
"Senior Credit Agreement" means the Second Amended and Restated Credit
Agreement, dated as of August 1, 2000, among the Borrower, as guarantor, the
"Borrowers" named therein, First Union Investors, Inc., as administrative agent,
General Electric Capital Corporation, as syndication agent, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc., as documentation agent.
"Senior Facility Borrower Leverage Ratio" means with respect to the Senior
Facility Borrowers and their Subsidiaries on a Consolidated basis as of the last
day of any fiscal quarter, the ratio of (a) Total Debt thereof as of such date
to (b) EBITDA thereof for the six-month period ending on such date times two
-----
(2).
"Senior Facility Borrowers" means the Subsidiaries set forth on Schedule
1.01, together with any additional Subsidiaries that becomes a borrower under
the Senior Credit Agreement.
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"Senior Facility Debt" means any Debt outstanding from time to time under
the Senior Facility Documents, provided the aggregate principal amount of such
Debt (including any Reimbursement Obligations) shall not exceed $400,000,000.
"Senior Facility Documents" means collectively (i) the Senior Credit
Agreement, (ii) the Second Amended and Restated Security Agreement, dated August
1, 2000, among the Borrower, the Subsidiaries named therein and First Union
Investors, Inc., as administrative agent, (iii) the Second Amended and Restated
Pledge Agreement, dated August 1, 2000, among the Borrower, the Subsidiaries
named therein and First Union Investors, Inc., as administrative agent, and (iv)
the other Loan Documents referred to (and as such term is defined) in such
Senior Credit Agreement, in each case as amended, modified or waived from time
to time in accordance with Section 6.11.
"Stage 1 Covenant Period" means the period commencing on the Effective Date
and ending on the day immediately prior to the first day of the Stage 2 Covenant
Period.
"Stage 2 Covenant Period" means the period commencing on the first day
following the fiscal quarter in respect of which the Borrower has delivered
financial information pursuant to Section 5.01(b) and the accompanying
certification by a Financial Officer in each case evidencing that (a) the
Borrower Leverage Ratio (as at the last day of such quarter) is less than or
equal to 10.0 to 1.0 (but greater than zero), (b) the Senior Facility Borrower
Leverage Ratio (as at the last day of such quarter) is less than or equal to 6.0
to 1.0 (but greater than zero) and (c) EBITDA for the Senior Facility Borrowers
for each of the two fiscal quarters then ended was a positive number.
"Statutory Reserve Adjustment" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Federal Reserve Board to which the Administrative Agent is
subject with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board). Such
reserve percentages will include those imposed pursuant to such Regulation D.
Eurodollar Loans will be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve
Adjustment will be adjusted automatically on and as of the effective date of any
change in any applicable reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any date,
(a) any corporation, limited liability company, partnership or other entity the
accounts of which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date and (b) any other corporation, limited
liability company, partnership or other entity (i) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is otherwise Controlled as of such date, by the parent and/or one
or more of its subsidiaries.
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"Subsidiary" means any subsidiary of the Borrower.
"Switch" means any Lucent 5-ESS Switch or other comparable switch for the
provision of CLEC telephony service or a packet-based switch for the provision
of DSL and/or voice services.
"Target" means US Xchange, Inc., a Delaware corporation.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Telecommunication Equipment" means fiber optic cable, Switches,
transmission equipment and other ancillary hardware necessary for the
installation and operation of a switch room or central office and collocation
with other telecommunications providers which will enable the Choice One
Companies to offer CLEC telephony and DSL. Telecommunications Equipment shall
also include software associated with the Network Facility and back office
systems (including without limitation billing systems, operations systems and
support, customer service and DSL services) and other related software and
hardware products integral to developing a viable CLEC telephony and DSL
business.
"Termination Date" means the first anniversary of the Effective Date.
"Termination Event" means: (a) except for any such event that could not
reasonably be expected to have a Material Adverse Effect, a "Reportable Event"
described in Section 4043 of ERISA, or (b) except for any such event that could
not reasonably be expected to have a Material Adverse Effect, the withdrawal of
the Borrower or any ERISA Affiliate from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c)
the termination of a Plan, the filing of a notice of intent to terminate a Plan
or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or (f)
the imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA, or (g) except for any such event that could not reasonably be expected to
have a Material Adverse Effect, any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (h) except for any such event that could not reasonably be expected
to have a Material Adverse Effect, any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA., or (i) the Borrower or any ERISA Affiliate fails to make
full payment when due of all amounts which, under the provisions of any Plan or
Section 412 of the Code, the Borrower or any ERISA Affiliate is required to pay
as contributions thereto, or (j) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$2,000,000.
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"Total Consolidated Debt" means, without duplication, all Debt of the
Company and its Subsidiaries determined on a Consolidated basis at any date of
determination. For the purpose of the calculation of the financial covenants
hereunder, "Total Consolidated Debt" shall not include obligations to redeem or
repurchase the Preferred Equity and/or any Replacement Equity or obligations to
repurchase or redeem certain other capital stock which is permitted under
Section 6.07.
"Total Debt" means, without duplication, all Debt of the Senior Facility
Borrowers and their Subsidiaries determined on a Consolidated basis at any date
of determination. For the purpose of the calculation of the financial
covenants, "Total Debt" shall not include obligations to redeem or repurchase
the Preferred Equity and/or any Replacement Equity or obligations to repurchase
or redeem certain other capital stock which is permitted under Section 6.07.
"Transaction" means (i) the execution, delivery and performance by the
Borrower of the Loan Documents to which it is to be a party, the borrowing of
Loans, and the use of the proceeds thereof, (ii) the issuance of the Borrower
Common Stock, (iii) the issuance of the Preferred Equity, (iv) the refinancing
of all the outstanding Debt under the Existing Loan Credit Agreement (as such
term is defined in the Senior Facility Documents), (v) the refinancing of all of
the Existing Target Notes and (vi) the consummation of the Acquisition.
"Transaction Agreement" means the Transaction Agreement dated as of July 8,
1998 by and among the Borrower, and the investors party thereto, as modified
prior to the date hereof, and as further may be amended, restated or modified
from time to time.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02 Terms Generally. The definitions of terms herein apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun includes the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". The word "will" shall be construed
to have the same meaning and effect as the word "shall". Unless the context
requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof' and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be
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construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the word "property" shall be construed to refer to any
and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
Section 1.03 Accounting Terms; Changes in GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment of any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof (or
if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment of any provision hereof for such purpose), regardless of
whether such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be applied on the basis of GAAP
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
ARTICLE 2
THE CREDITS
Section 2.01 Commitments. (a) Bridge Loans. Subject to the terms and
conditions set forth herein, each Lender agrees to make a loan (each, a "Bridge
Loan") available to the Borrower on one date prior to the Termination Date in an
aggregate principal amount not in excess of such Lender's Bridge Commitment.
Amounts repaid in respect of Bridge Loans may not be reborrowed.
(b) Rollover Loans. Subject to the terms and conditions set forth herein,
each Lender agrees to make a loan (each, a "Rollover Loan") available to the
Borrower on the Rollover Borrowing Date, in a principal amount not to exceed the
Rollover Commitment of such Lender. The aggregate principal amount of all the
Rollover Loans made on the Rollover Borrowing Date shall be equal to (i) the
aggregate principal amount of the Bridge Loans outstanding on the Bridge
Maturity Date plus (ii) any rollover fees payable pursuant to Section 2.09(b)
----
that the Borrower, at its option, shall have elected to pay through Rollover
Loans. Amounts repaid in respect of Rollover Loans may not be reborrowed.
(c) The Commitments of the Lenders are several, i.e., the failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder, and no Lender shall be responsible for any
other Lender's failure to make a Loan as and when required hereunder.
Section 2.02 The Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments (and, with respect to any Bridge Loan Borrowing, of
the same Interest Type), as the Borrower may request (subject to Section 2.11)
in accordance herewith. Each Lender at its option may make a Eurodollar Bridge
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan. Any exercise of such option shall not affect the Borrower's
obligation to repay such Loan in accordance with the terms of this Agreement.
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(b) At the beginning of each Interest Period for any Borrowing, such
Borrowing shall be in an aggregate principal amount not less than $1,000,000
(and, in the case of a Bridge Loan Borrowing, an integral multiple of $100,000).
(c) Notwithstanding any other provision hereof, the Borrower will not be
entitled (i) to request, or to elect to convert or continue, any Eurodollar
Bridge Loan Borrowing if the Interest Period requested with respect thereto
would end after the Bridge Maturity Date, (ii) to request more than one Bridge
Loan Borrowing or (iii) to request more than one Rollover Loan Borrowing.
Section 2.03 Request to Borrow. To request a Borrowing on a Borrowing
Date, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Bridge Loan Borrowing or a Rollover
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before such Borrowing Date or (b) in the case of a Base Rate Bridge Loan
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before such Borrowing Date. Such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the Borrowing Date, which shall be a Business Day (and, in the
case of a Rollover Loan Borrowing, shall be the Rollover Borrowing Date);
(iii) if such Borrowing is a Bridge Loan Borrowing, whether such
Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and
(iv) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.04.
If no election as to the Interest Type of a Bridge Loan Borrowing is specified,
the requested Bridge Loan Borrowing will be a Base Rate Bridge Borrowing.
Promptly after it receives a Borrowing Request in accordance with this Section,
the Administrative Agent shall advise each Lender as to the details of such
Borrowing Request and the amount of such Lender's Loan to be made pursuant
thereto.
Section 2.04 Funding; Deposit Into Escrow Account. (a) Each Lender shall
make each Loan to be made by it hereunder on each Borrowing Date by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent shall make such funds
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the Borrowing Request; provided
that the Administrative Agent shall deposit into the Escrow Account on the
Bridge Borrowing Date (and the Borrower hereby authorizes the Administrative
Agent to deposit into the Escrow Account) an amount equal to $30,000,000 of the
amount so received on the Bridge Borrowing Date; provided
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that (i) if the Bridge Loan Borrowing is less than $180,000,000, then such
amount to be deposited in escrow shall be 30/180ths of the amount of the Bridge
Loan Borrowing, and (ii) if the Bridge Loans are made after the Effective Date,
such amount to be deposited in escrow shall be reduced to reflect the actual
number of days which elapse between the Bridge Borrowing Date and the Bridge
Maturity Date being sufficient to cover the expected interest payments on the
Bridge Loan until the Bridge Maturity Date, as reasonably determined by the
Administrative Agent.
(b) Unless the Administrative Agent shall have received notice from a
Lender before any Borrowing Date that such Lender will not make its share of the
Borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance
with Section 2.04(a) and may, in reliance on such assumption, make a
corresponding amount available to the Borrower. In such event, if a Lender has
not in fact made its share of the relevant Borrowing available to the
Administrative Agent, such Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the day such amount is made available
to - the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate in effect with respect to the Borrowing. If such
Lender pays such amount to the Administrative Agent, such amount shall
constitute such Lender's Loan included in the Borrowing.
Section 2.05 Interest Elections. (a) Each Bridge Loan Borrowing initially
shall be of the Interest Type specified in the Borrowing Request. On the Reset
Date, each Rollover Borrowing shall automatically be converted into a Eurodollar
Borrowing, and the principal amount of each Rollover Loan included in such
Eurodollar Borrowing shall be equal to the Accreted Value of such Rollover Loan
in effect immediately prior to such conversion. The Borrower may elect to
convert any Bridge Loan Borrowing (and after the Reset Date, any Rollover Loan
Borrowing) to a different Interest Type or, in the case of a Eurodollar
Borrowing, to continue the Borrowing for one or more additional Interest
Periods, all as provided in this Section. The Borrower may elect different
options with respect to different portions of each affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under 2.03 if the Borrower were requesting
that a Borrowing of the Interest Type resulting from such election be made on
the effective date of such election. Each such telephonic Interest Election
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election in a form
approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election shall specify the
following information in compliance with Section 2.02 and subsection (e) of this
Section:
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(i) the Borrowing to which such Interest Election applies and,
if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election, which shall be a Business Day; and
(iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing.
(d) Promptly after it receives an Interest Election, the Administrative
Agent shall advise each Lender as to the details thereof and such Lender's
portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election with
respect to a Eurodollar Borrowing before the end of an Interest Period
applicable thereto, then, unless repaid, such Borrowing will be converted to a
Base Rate Borrowing at the end of such Interest Period. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing, (i)
no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing will be converted to
a Base Rate Borrowing at the end of the Interest Period applicable thereto on
the date of such notice.
Section 2.06 Termination and Reduction of Commitments. (a) Unless
previously terminated, the Bridge Commitments will terminate on the earlier of
(i) the Termination Date and (ii) the Bridge Borrowing Date (after giving effect
to the Bridge Loans made on such date).
(b) Unless previously terminated, the Rollover Commitments will terminate
on the earliest of (i) the Bridge Maturity Date (after giving effect to the
Rollover Loans made on such date), (ii) the date on which the aggregate
principal amount of the Bridge Loans is repaid in full and (iii) the date on
which the Bridge Commitments terminate (or are reduced to $0) without any Bridge
Loans having being made.
(c) The Borrower may at any time terminate, or from time to time reduce,
the Bridge Commitments; provided that (i) the amount of each reduction of the
Commitments shall be an integral multiple of $100,000 and not less than
$1,000,000 and (ii) at least five Business Days prior to the effectiveness of
any such reduction, the Borrower shall have provided evidence reasonably
satisfactory to the Lenders that the Borrower shall have, after giving effect to
such reduction, immediately available capital in such amount as shall be
necessary to implement the Business Plan.
(d) On the date on which any Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary in respect of any Prepayment Event occurring on
or prior to the Bridge Borrowing Date in accordance with this Agreement, the
Bridge Commitments shall be automatically reduced by an aggregate amount equal
to such Net Proceeds; provided that if Net
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Proceeds at least equal to $150,000,000 are received by or on behalf of the
Borrower or any Subsidiary in respect of one or more Prepayment Events
consummated prior to the Bridge Borrowing Date, on the date on which such Net
Proceeds equal $150,000,000 the Bridge Commitments shall be automatically
reduced to $0.
(e) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Bridge Commitments under subsection (c) of this Section
at least three Business Days before the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
after it receives any such notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this subsection (e) will be irrevocable. Any termination or reduction of the
Bridge Commitments will be permanent and will be made ratably among the Lenders
in accordance with their respective Bridge Commitments.
(f) Promptly after any Net Proceeds are received by or on behalf of the
Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower
shall give written notice to the Administrative Agent setting forth in detail
reasonably satisfactory to the Administrative Agent the method used to calculate
the amount of such Net Proceeds.
Section 2.07 Repayment of Loans at Maturity; Evidence of Debt. (a) The
Borrower unconditionally promises to pay to the Administrative Agent on the
Bridge Maturity Date, for the account of each Lender, the then unpaid principal
amount of such Lender's Bridge Loans.
(b) The Borrower unconditionally promises to pay to the Administrative
Agent on the Rollover Maturity Date, for the account of each Lender, the then
unpaid principal amount of such Lender's Rollover Loans.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time.
(d) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Interest Type (if
applicable) thereof and each Interest Period (if any) applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to subsections (b)
and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that any failure by any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not affect the Borrower's obligation to repay the Loans in
accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a Note.
In such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns).
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Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented by
one or more Notes payable to the order of the payee named therein (or, if such
Note is a registered note, to such payee and its registered assigns). The Note
issued to any Lender evidencing the Bridge Loans of such Lender shall be in an
aggregate principal amount equal to the then aggregate unpaid principal amount
of the Bridge Loans of such Lender. The Note issued to any Lender evidencing the
Rollover Loans of such Lender shall be in a face amount equal to (i) the
principal amount of the Rollover Loan made by such Lender on the Rollover
Borrowing Date plus (iii) the Discount with respect to such Rollover Loan.
----
"Discount" means, with respect to any Rollover Loan, the aggregate amount of
interest that would accrue on such Rollover Loan made by such Lender from and
including the Rollover Borrowing Date through the Reset Date assuming an
interest rate per annum equal to the Accretion Rate, compounded semiannually.
Section 2.08 Optional and Mandatory Prepayments. (a) The Borrower will
have the right at any time to prepay any Borrowing in whole or in part (as
directed by the Borrower), subject to the requirements of this Section 2.08(a).
Each partial prepayment of any Borrowing shall be in an amount that would be
permitted under Section 2.02(b) for such Borrowing. Each prepayment of any
Bridge Borrowing shall be accompanied by accrued interest to the extent required
by Section 2.10. Each prepayment of any Rollover Borrowing made prior to the
Reset Date shall be for an amount equal to the Accreted Value of the Rollover
Loans included in such Borrowing, such Accreted Value calculated on the date of
such prepayment.
(b) Within five Business Days after any Net Proceeds are received by or on
behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the
Borrower shall prepay Loans in a principal aggregate amount equal to such Net
Proceeds.
(c) On the Bridge Maturity Date, the Borrower shall repay Bridge Loans in a
principal aggregate amount equal to the aggregate amount then on deposit in the
Escrow Account, less the amount thereof to be applied to pay on such date to pay
accrued and unpaid interest on the Bridge Loans.
(d) If on any date on or after the Rollover Borrowing Date a Change in
Control shall occur, the Borrower shall repay in full the Rollover Loans.
(e) Each mandatory prepayment of any Rollover Loan Borrowing made prior to
the Reset Date (other than a mandatory prepayment pursuant to clause (d)) shall
be for an amount equal to the Accreted Value of the Rollover Loans included in
such Borrowing, such Accreted Value calculated on the date of such prepayment.
Each mandatory prepayment of any Rollover Loan Borrowing made prior to the Reset
Date pursuant to clause (d) shall be for an amount equal to 101% of the Accreted
Value of the Rollover Loans included in such Borrowing, such Accreted Value
calculated on the date of such prepayment. Each mandatory prepayment of any
Rollover Loan Borrowing made on or after the Reset Date (other than a mandatory
prepayment pursuant to clause (d)) shall be for an amount equal to aggregate
principal amount of the Rollover Loans included in such Borrowing. Each
mandatory prepayment of any Rollover Loan Borrowing made on or after the Reset
Date pursuant to clause (d) shall be for an amount equal to 101% of the
aggregate principal amount of the Rollover Loans included in such Borrowing.
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(f) Before any optional or mandatory prepayment of Borrowings hereunder,
the Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to subsection
(g) below.
(g) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment of any Borrowing hereunder (i) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of prepayment and (ii) in the case of a Base
Rate Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment.
(h) Promptly after any Net Proceeds are received by or on behalf of the
Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower
shall give written notice to the Administrative Agent setting forth in detail
reasonably satisfactory to the Administrative Agent the method used to calculate
the amount of such Net Proceeds.
Section 2.09 Fees. (a) The Borrower shall pay to the Administrative Agent
for the account of each Lender, ratably in accordance with its Bridge
Commitment, on the Bridge Borrowing Date a funding fee in cash in an amount
equal to 2% of the aggregate principal amount of the Bridge Loans made to the
Borrower on such date.
(b) The Borrower shall pay to the Administrative Agent for the account of
each Lender, ratably in accordance with its Rollover Commitment, on the Rollover
Borrowing Date a rollover fee in an amount equal to 3% of the aggregate
principal amount of the Rollover Loans made to the Borrower on such date. Such
fee shall be payable in full in cash (or, at the option of the Borrower, by the
borrowing of Rollover Loans).
(c) The Borrower shall pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon by
the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution to the
Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances.
Section 2.10 Interest and Accreted Value. (a) Base Rate Bridge Loans. The
Base Rate Bridge Loans shall bear interest at the Alternate Base Rate plus the
Applicable Bridge Rate.
(b) Eurodollar Bridge Loans. The Loans comprising each Eurodollar Bridge
Loan Borrowing shall bear interest for each Interest Period in effect for such
Borrowing at the Adjusted LIBO Rate for such Interest Period plus the Applicable
Bridge Rate.
(c) Overdue Amounts On or Prior to the Bridge Maturity Date.
Notwithstanding the foregoing, if any principal of or interest on any Bridge
Loan or any fee or other amount payable by the Borrower hereunder prior to the
Bridge Maturity Date is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
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well as before judgment, at a rate per annum equal to (i) in the case of
principal or interest on any Bridge Loan, 2% plus the rate applicable to such
Bridge Loan as provided in the preceding subsections of this Section, and (ii)
in the case of any other amount, 2%.
(d) Interest Payments With Respect to Bridge Loans. Interest accrued on
each Bridge Loan shall be payable in arrears on each Interest Payment Date for
such Loan; provided that (i) interest accrued pursuant to subsection (c) above
shall be payable on demand, (ii) upon any prepayment or repayment of any Bridge
Loan, interest accrued on the principal amount repaid shall be payable on the
date of such repayment, (iii) upon any conversion of a Eurodollar Bridge Loan
before the end of the current Interest Period therefor, interest accrued on such
Bridge Loan shall be payable on the effective date of such conversion and (iv)
to the extent any amounts are on deposit in the Escrow Account on any date on
which interest accrued pursuant to subsections (a) or (b) above is due and
payable, the Borrower shall apply, or cause to be applied, all such amounts to
the payment of such interest (and, to the extent such amounts are not sufficient
to make such payment in full, the Borrower shall be liable for any deficiency).
(e) Accreted Value of Rollover Loans; Conversion to Eurodollar Loans. The
Accreted Value of each Rollover Loan on any date shall be determined in
accordance with the definition of "Accreted Value".
(f) Base Rate Rollover Loans. On and after the Reset Date, the Base Rate
Rollover Loans shall bear interest at (i) the Alternate Base Rate plus (ii) the
Applicable Bridge Rate as in effect on the Bridge Maturity Date.
(g) Eurodollar Rollover Loans. On and after the Reset Date, the Loans
comprising each Eurodollar Rollover Loan Borrowing shall bear interest for each
Interest Period in effect for such Borrowing at (i) the Adjusted LIBO Rate for
such Interest Period plus (ii) the Applicable Bridge Rate as in effect on the
Bridge Maturity Date.
(h) Overdue Amounts On or After the Reset Date. Notwithstanding the
foregoing, if any principal of or interest on any Rollover Loan or any fee or
other amount payable by the Borrower hereunder on or after the Reset Date is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of principal or interest on any Rollover
Loan, 2% plus the rate applicable to such Rollover Loan as provided in
subsections (f) and (g) of this Section, and (ii) in the case of any other
amount, 2%.
(i) Interest Payments With Respect to Rollover Loans. Interest accrued on
each Rollover Loan on or after the Reset Date shall be payable in arrears on
each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to subsection (c) above shall be payable on demand, (ii) upon any
prepayment or repayment of any Rollover Loan on or after the Reset Date,
interest accrued on the principal amount repaid shall be payable on the date of
such repayment, and (iii) upon any conversion of a Eurodollar Rollover Loan
before the end of the current Interest Period therefor, interest accrued on such
Rollover Loan shall be payable on the effective date of such conversion.
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(j) All interest hereunder will be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate will be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case will be payable for the actual number of days elapsed (including the first
day but excluding the last day). Each applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and its
determination thereof will be conclusive absent manifest error.
Section 2.11 Alternate Rate of Interest. If before the beginning of any
Interest Period for a Eurodollar Borrowing (or in connection with the
determination of the Accretion Rate):
(i) the Administrative Agent determines (which determination will be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(ii) Lenders whose Loans to be included in such Borrowing aggregate
more than 50% thereof advise the Administrative Agent that the Adjusted
LIBO Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining such Loans for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election that requests the conversion of any Bridge Loan Borrowing to, or
continuation of any Bridge Loan Borrowing as, a Eurodollar Borrowing will be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Bridge Loan
Borrowing, such Borrowing will be made as a Base Rate Bridge Loan Borrowing.
Section 2.12 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan (Loans) or to reduce any amount
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise), then such Lender shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify the Borrower of such fact and
demand compensation therefor and, within fifteen (15) days after such notice by
the Administrative Agent, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate it for such additional cost incurred or
reduction suffered.
(b) If any Lender reasonably determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital
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or on the capital of such Lender's holding company, if any, as a consequence of
this Agreement or the Borrowing made by, such Lender to a level below that which
such Lender or such Lender's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital adequacy), then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate it or its holding company for any such reduction
suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary
to compensate it or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section will not constitute a waiver of its right to demand
such compensation; provided that the Borrower will not be required to compensate
a Lender pursuant to this Section for any increased cost or reduction incurred
more than 180 days before it notifies the Borrower of the Change in Law giving
rise to such increased cost or reduction and of its intention to claim
compensation therefor. However, if the Change in Law giving rise to such
increased cost or reduction is retroactive, then the 180-day period referred to
above will be extended to include the period of retroactive effect thereof.
Section 2.13 Taxes. (a) All payments by the Borrower under the Loan
Documents shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that, if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable will be increased as necessary so that, after all required
deductions (including deductions applicable to additional sums payable under
this Section) are made, each relevant Lender Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify each Lender Party, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by such Lender Party on or with respect to any payment by or on
account of any obligation of the Borrower under the Loan Documents (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority except for any such penalties, interest
and expenses assessed against or incurred by the Administrative Agent or such
Lender as a result of its own gross negligence or willful misconduct as
determined (in a formal determination) by a court of competent jurisdiction or
an arbitration panel. A certificate as to the amount of such payment or
liability
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delivered to the Borrower by a Lender Party on its own behalf, or by the
Administrative Agent on behalf of a Lender Party, shall be conclusive absent
manifest error.
(d) As soon as practicable after the Borrower pays any Indemnified Taxes or
Other Taxes to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the laws of the United States, or any treaty to which
the United States is a party, with respect to payments under this Agreement
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate. If any such Foreign Lender
becomes subject to any Tax because it fails to comply with this subsection as
and when prescribed by applicable law, the Borrower shall take such steps
without expense to it as such Foreign Lender shall reasonably request to assist
such Foreign Lender to recover such Tax.
Section 2.14 Break Funding Payments. If (i) any principal of any Bridge
Loan is repaid on a day other than the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (ii) any Bridge Loan is
converted on a day other than the last day of an Interest Period applicable
thereto, (iii) the Borrower fails to borrow, convert, continue or prepay any
Bridge Loan on the date specified in any notice delivered pursuant hereto or
(iv) any Bridge Loan is assigned on a day other than the last day of an Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.16 then, in any such case, the Borrower shall compensate each Lender
for its loss, cost and expense attributable to such event. Such loss, cost and
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (A) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the end of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have begun on the date of such failure), over (B) the
amount of interest that would accrue on such principal amount for such period at
the interest rate which such Lender would bid were it to bid, at the beginning
of such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
Section 2.15 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it under the
Loan Documents (whether of principal, interest or fees, or amounts payable under
Section 2.10, 2.12 or 2.13 or otherwise) no later than the time expressly
required under the relevant Loan Document for such payment (or, if no such time
is expressly required, before 12:00 noon, New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any amount
-28-
received after such time on any day may, in the discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, except
that payments pursuant to Sections Section 2.10, 2.12, 2.13 and 9.03 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payment received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment will be extended to the next
succeeding Business Day and, if such payment accrues interest, interest thereon
will be payable for the period of such extension. All payments under each Loan
Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to pay interest and
fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans; provided
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this subsection shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this subsection
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless, before the date on which any payment is due to the
Administrative Agent for the account of one or more Lender Parties hereunder,
the Administrative Agent receives from the Borrower notice that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to each relevant Lender Party the
amount due to it. In such event, if the Borrower has not in fact made such
payment, each Lender Party
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severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender Party with interest thereon, for each day
from and including the day such amount is distributed to it to but excluding the
day it repays the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender fails to make any payment required to be made by it
pursuant to Section 2.04(b), 2.15(d) or 9.03(c), the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
Section 2.16 Lender's Obligation to Mitigate; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.12, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.13, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the good
faith judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.10 or 2.12, as the
case may be, in the future, (ii) would not subject such Lender to any
unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to
such Lender. The Borrower shall pay all reasonable costs and expenses incurred
by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.10, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.12,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.10 or payments required to be made pursuant to Section 2.12, such assignment
will result in a material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment if, prior thereto, as a result
of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment cease to apply.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender Parties (including
without limitation immediately after giving effect to the Acquisition) that:
Section 3.01 Organization; Powers. Each Choice One Company (other than
the Inactive Subsidiaries) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where failures to do so, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
Section 3.02 Authorization; Enforceability. The Transaction to be entered
into by each Choice One Company is within such Choice One Company's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. Each Loan Document has been duly executed and
delivered by the Choice One Company party thereto and constitutes a legal, valid
and binding obligation of such Choice One Company enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
Section 3.03 Governmental Approvals; No Conflicts. The Transaction (a)
does not require any consent or approval of, registration or filing with, or
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
any Choice One Company or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Choice One Company or its assets, or give rise to a
right thereunder to require any Choice One Company to make any payment, and (d)
will not result in the creation or imposition of any Lien on any asset of any
Choice One Company other than Liens securing Senior Facility Debt.
Section 3.04 Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders (i) its consolidated balance
sheet as of December 31, 1998 and the related consolidated statements of income,
retained earnings and cash flows for the period from June 2, 1998 through
December 31, 1998, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, independent public
accountants, (ii) its consolidated balance sheet as of December 31, 1999 and the
related consolidated statements of income, retained earnings and cash flows for
the Fiscal Year then ended, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, independent
public accountants, and (iii) its consolidated balance sheet as of March 31,
2000 and the related consolidated statements of income and cash flows for the
Fiscal Quarter then ended, all certified by its chief financial officer. All
such financial statements present fairly, in all material respects, the
financial position of the Borrower and the Subsidiaries as of such dates and
their results of operations and changes of financial position for such periods
in accordance with GAAP then ended, subject to
-31-
normal year-end adjustments and the absence of footnotes in the case of the
statements referred to in clause (iii) above.
(b) The Borrower has heretofore furnished to the Lenders (i) the
consolidated balance sheet of the Target as of December 31, 1999 and the related
consolidated statements of income, retained earnings and cash flows for the
Fiscal Year then ended, reported on by BDO ▇▇▇▇▇▇▇, independent public
accountants, and (ii) the consolidated balance sheet of the Target as of March
31, 2000 and the related consolidated statements of income and cash flows for
the Fiscal Quarter then ended. Such financial statements present fairly, in all
material respects, the financial position of the Target and its consolidated
Subsidiaries as of such dates and their results of operations and cash flows for
such periods in accordance with GAAP, subject to normal year-end adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) above.
(c) The Borrower has heretofore furnished to the Lenders its pro forma
consolidated balance sheet as of March 31, 2000, prepared giving effect to the
Transaction as if the Transaction had been consummated on such date, certified
by its chief financial officer. Such pro forma consolidated balance sheet (i)
has been prepared in good faith based on assumptions disclosed to the Lenders in
writing (which assumptions are believed by the Borrower to be reasonable), (ii)
is based on the best information available to the Borrower after due inquiry,
(iii) accurately reflects all adjustments necessary to give effect to the
Transaction and (iv) presents fairly, in all material respects, the pro forma
financial position of the Borrower and its consolidated Subsidiaries as of March
31, 2000 as if the Transaction had been consummated on such date.
(d) None of the Choice One Companies has, as of the Effective Date, any
material contingent liabilities, unusual long-term commitments or unrealized
losses, except as disclosed in the financial statements referred to above or the
notes thereto and except for the Disclosed Matters.
(e) Since December 31, 1999, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of the Choice One Companies, taken as a whole.
Section 3.05 Properties. (a) Each Choice One Company has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each Choice One Company owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Choice One Companies does not infringe upon
the rights of any other Person, except for infringements that, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
Section 3.06 Litigation and Environmental Matters. (a) Except for the
Disclosed Matters, there are no actions, suits or proceedings pending nor, to
the knowledge of the
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Borrower, threatened against or in any other way relating adversely to or
affecting the Borrower or any Subsidiary thereof or any of their respective
properties in any court or before any arbitrator of any kind or before or by any
Governmental Authority that could, in the aggregate, reasonably be expected to
have a Material Adverse Effect or that involve any of the Loan Documents.
(b) Except for the Disclosed Matters and where the failure of any of the
following representations to be correct in all respects could not reasonably be
expected to have a Material Adverse Effect: (i) the properties of the Borrower
and its Subsidiaries do not contain, and to their knowledge have not previously
contained, any Hazardous Substances in amounts or concentrations which (A)
constitute or constituted a material violation of applicable Environmental Laws
or (B) could give rise to liability under applicable Environmental Laws; (ii)
such properties and all operations conducted in connection therewith are in
material compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof; (iii) neither the
Borrower nor any Subsidiary thereof has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of their properties or the operations conducted in connection therewith, nor
does the Borrower or any Subsidiary thereof have knowledge or reason to believe
that any such notice will be received or is being threatened; (iv) Hazardous
Substances have not been transported or disposed of from the properties of the
Borrower and its Subsidiaries in violation of, or in a manner or to a location
which could give rise to liability under, Environmental Laws, nor have any
Hazardous Substances been generated, treated, stored or disposed of at, on or
under any of such properties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Laws; (v) no judicial
proceedings or governmental or administrative action is pending, or, to the
knowledge of the Borrower, threatened, under any Environmental Law to which the
Borrower or any Subsidiary thereof is or will be named as a party with respect
to such properties or operations conducted in connection therewith, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to such properties or such
operations; and (vi) there has been no release, or to the best of the Borrower's
knowledge, the threat of release, of Hazardous Substances at or from such
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
Section 3.07 Compliance with Laws and Agreements. Each Choice One Company
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding on it or its property, except where failures to do so,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
Section 3.08 Investment and Holding Company Status. No Choice One Company
is (a) an "investment company" as defined in, or subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
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Section 3.09 Taxes. Each of the Borrower and its Subsidiaries has duly
filed or caused to be filed all federal and all material state, local and other
tax returns required by applicable law to be filed, and has paid, or made
adequate provision for the payment of, all federal and all material state, local
and other taxes, assessments and governmental charges or levies upon it and its
property, income, profits and assets which are due and payable (except for those
taxes, assessments and governmental charges or levies which are contested by the
Borrower or any Subsidiary in good faith and as to which adequate reserves are
maintained with respect thereto in accordance with GAAP). No Governmental
Authority has asserted any Lien or other claim against the Borrower or
Subsidiary thereof with respect to unpaid taxes which has not been discharged or
resolved (except with respect to such taxes which are being contested by the
Borrower or any Subsidiary in good faith and as to which adequate reserves are
maintained with respect thereto in accordance with GAAP). The charges, accruals
and reserves on the books of the Borrower and any of its Subsidiaries in respect
of federal, state, local and other taxes for all Fiscal Years and portions
thereof since the organization of the Borrower and any of its Subsidiaries are
in the judgment of the Borrower adequate, and the Borrower does not anticipate
any additional taxes or assessments for any of such years.
Section 3.10 ERISA. (i) As of the Effective Date, neither the Borrower
nor any ERISA Affiliate maintains or contributes to, or has any obligation
under, any Plans other than those identified on Schedule 3.10.
(ii) The Borrower and each ERISA Affiliate is in material compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b)
of the Code has not yet expired and except where a failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Each Plan that is
intended to be qualified under Section 401(a) of the Code has been determined by
the Internal Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the Code except
for such plans that have not yet received determination letters but for which
the remedial amendment period for submitting a determination letter has not yet
expired. No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any Plan or
any Multiemployer Plan except for a liability that could not reasonably be
expected to have a Material Adverse Effect.
(iii) As of the Closing Date, no Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code) been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Plan, nor has the Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Plan prior
to the due dates of such contributions under Section 412 of the Code or Section
302 of ERISA, nor has there been any event requiring any disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Plan.
(iv) Neither the Borrower nor any ERISA Affiliate has: (A) engaged in a
nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code,
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(B) incurred any liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and unpaid,
(C) failed to make a required contribution or payment to a Multiemployer Plan,
or (D) failed to make a required installment or other required payment under
Section 412 of the Code.
(v) No Termination Event has occurred or is reasonably expected to occur.
(vi) Except where the failure of any of the following representatives to be
correct in all material respects could not be expected to have a Material
Adverse Effect, no proceeding, claim (other than a benefits claim in the
ordinary course of business (including with respect to both frequency and
amount) , lawsuit and/or investigation is existing or, to the best knowledge of
the Borrower after due inquiry, threatened concerning or involving any (A)
employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by the Borrower or any ERISA Affiliate, (B) Plan or
(C) Multiemployer Plan.
Section 3.11 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Choice
One Company is subject, and all other matters known to any of them (including,
without limitation, matters relating to the execution, termination, or
modification of any agreement), that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Choice One Company to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based on assumptions believed
to be reasonable at the time when such projected financial information was
prepared.
Section 3.12 Subsidiaries. Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each of its Subsidiaries. All the
Borrower's Subsidiaries are, and will at all times be, fully consolidated in its
consolidated financial statements. As of the Effective Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for, or otherwise provided for or permit the
issuance of capital stock of the Borrower or its Subsidiaries, except as
described in Schedule 3.12.
Section 3.13 Insurance. A description of insurance coverage maintained by
or on behalf of the Choice One Companies is set forth on Schedule 5.10. As of
the Effective Date, all premiums in respect of such insurance have been paid.
The Borrower believes that the insurance maintained by or on behalf of the
Choice One Companies is adequate.
Section 3.14 Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Choice One Company pending or, to the
knowledge of the Borrower, threatened. The hours worked by and payments made to
employees of the Choice One Companies have not been in violation of the Fair
Labor Standards Act or any other applicable
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Federal, state, local or foreign law dealing with such matters. All payments due
from any Choice One Company, or for which any claim may be made against any
Choice One Company, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Choice One Company. The consummation of the Transaction will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement by which any Choice One
Company is bound.
Section 3.15 No Burdensome Restrictions. No contract, lease, agreement or
other instrument to which any Choice One Company is a party or by which any of
its property is bound or affected, no charge, corporate restriction, judgment,
decree or order and no provision of applicable law or governmental regulation is
reasonably expected to have a Material Adverse Effect.
Section 3.16 Solvency. Immediately after the consummation of the
Financing Transactions on the Effective Date, the Borrower and its Subsidiaries
(a) have capital (or access to immediately available capital, including, if
applicable, under the Senior Facility Documents), sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) own property having a
value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) do not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
Section 3.17 Communications Regulatory Matters. (a) Schedule 3.17 hereto
sets forth, as of the date hereof, a true and complete list of the following
information for each Communications License issued to any Choice One Company:
(i) for all Communications Licenses, the name of the licensee, the type of
service and the expiration dates; and (ii) for each PUC Authorization, the
geographic area covered by such PUC Authorization, the services that may be
provided thereunder and the expiration date, if any.
(b) No Choice One Company is in material violation of any Communications
Law applicable thereto. The Communications Licenses specified on Schedule 3.17
hereto are valid and in full force and effect without conditions except for such
conditions as are generally applicable to holders of such Communications
Licenses and except as set forth on such Schedule. No event has occurred and is
continuing which could reasonably be expected to result in the imposition of a
material forfeiture or the revocation, termination or adversely affect the
Choice One Companies thereunder. The Borrower has no reason to believe and has
no knowledge that Communications Licenses will not be approved or renewed, as
applicable, in the ordinary course.
(c) All of the Network Facilities and other material properties, equipment
and systems owned, leased or managed by any Choice One Company are in good
repair, working order and condition (reasonable wear and tear expected) and are
in compliance with all terms and conditions of the Communications Licenses and
all standards or rules imposed by applicable Communications Law and any
Governmental Authority or as imposed under any agreements with telephone
companies and customers, except where the failure of any of the foregoing to be
accurate could not reasonably be expected to have a Material Adverse Effect.
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(d) The Choice One Companies have paid all material franchise, license or
other fees and charges which have become due pursuant to any Governmental
Approval in respect of their business and have made appropriate provision as is
required by GAAP for any fees and charges which have accrued.
Section 3.18 Representations and Warranties in the Merger Agreement and
the Senior Facility Documents. (a) As of the Effective Date, each of the
representations and warranties made in the Merger Agreement by each of the
parties thereto is true and correct in all material respects, and such
representations and warranties are hereby incorporated herein by reference with
the same effect as though set forth in their entirety herein, as qualified
therein.
(b) As of the Effective Date, the representations and warranties made by
the Borrower and its Subsidiaries contained in the Senior Facility Documents are
true and correct, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified herein.
ARTICLE 4
CONDITIONS
Section 4.01 Effective Date. The Effective Date shall occur on the first
date on which each of the following conditions is satisfied (or waived in
accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of counsel for the Borrower, substantially in the form of
Exhibit D. The Borrower requests such counsel to deliver such opinion.
(c) The Acquisition shall have been consummated in accordance with the
Merger Agreement and all related documentation, all of which will be reasonably
satisfactory in form and substance to the Lenders. There shall have been no
amendment, modification or waiver of any material terms or conditions of the
Merger Agreement or any related documentation without the prior written consent
of the Lenders. The Merger Agreement shall contain provisions reasonably
satisfactory in form and substance to the Lenders pursuant to which the Sellers
shall have agreed that the costs of any redemption of the Existing Target Notes
in excess of 101% of the face amount thereof shall be for the account of the
Sellers.
(d) The Borrower shall have issued common stock, par value $0.01 per share,
having an aggregate fair market value exceeding $200,000,000 (the "Borrower
Common Stock").
(e) The Borrower shall have received gross proceeds of $200,000,000 from
the issuance of the Preferred Equity the terms and conditions of which
(including without limitation
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dividend rate, payments of cash dividends, redemption provisions and covenants)
shall be reasonably satisfactory to the Lenders and shall provide in any event
that no dividends shall be payable in cash prior to the fifth anniversary of the
Effective Date (it being understood that the terms and conditions with respect
to the Preferred Equity that have been described by the Borrower to the Lenders
prior to May 11, 2000 are satisfactory to the Lenders).
(f) The Choice One Companies shall have no Debt outstanding other than (i)
Senior Facility Debt in an aggregate principal amount not in excess of
$400,000,000, (ii) the Loans and (iii) other Debt permitted to be incurred under
Section 6.01.
(g) All loans made by any Seller or any of its affiliates to the Target or
any of its Subsidiaries shall have been repaid in full.
(h) The Lenders shall have received all the financial statements described
in Section 3.04. All such financial statements shall be in form and scope
reasonably satisfactory to the Lenders and not materially inconsistent with any
of the financial information provided to the Lenders prior to the Effective
Date.
(i) The corporate, tax, capital and ownership structure (including articles
of incorporation and by-laws), shareholders agreements and management of each of
the Choice One Companies before and immediately after giving effect to the
Transaction shall be as described to the Lenders prior to May 11, 2000 or
otherwise reasonably satisfactory to the Lenders in all respects.
(j) The Lenders shall have received a solvency certificate from the chief
financial officer of the Borrower with respect to the solvency of the Choice One
Companies on a consolidated basis after giving effect to the Transaction, each
in form and substance reasonably satisfactory to the Lenders.
(k) All governmental, shareholder and third party consents (including ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary or desirable in connection with
the Transaction shall have been obtained and shall be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken by any competent authority that could restrain, prevent or impose any
materially adverse conditions on the Transaction or that could seek or threaten
to restrain, prevent or impose any materially adverse conditions on any of the
foregoing and no law or regulation shall be applicable which in the judgment of
the Lenders could have any such effect.
(l) There shall have occurred or exist no facts, events or circumstances,
which are inconsistent with the information provided to the Lenders prior to May
11, 2000 and that come to the attention of the Lenders after May 11, 2000 and
which could reasonably be expected to have a Material Adverse Effect.
(m) There shall be no action, suit, investigation, litigation or proceeding
pending or threatened in any court or before any arbitrator or governmental
instrumentality that (i) draw into question the validity or enforceability of
any Loan Document or any Senior Facility Document or the refinancing of the
Loans or (ii) could reasonably be expected to have a Material Adverse Effect.
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(n) The representations and warranties of the Borrower set forth in the
Loan Documents shall be true and correct on and as of the Effective Date.
(o) Immediately before and after giving effect to the Transaction, no
Default shall have occurred and be continuing.
(p) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by a Financial Officer, confirming compliance with the
conditions set forth in clauses (n) and (o).
(q) The Choice One Companies shall have paid all fees and other amounts due
and payable to the Lender Parties or their respective affiliates on or before
the Effective Date, including, to the extent invoiced, all out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel)
required to be reimbursed or paid by the Borrower under the Loan Documents.
(r) There shall not have occurred any material disruption of or material
adverse change in current financial, banking or capital market conditions that,
in the Lenders' judgment, could materially impair the satisfactory syndication
of the bridge facility created under this Agreement or the refinancing of the
Loans.
(s) The Borrower shall have entered into the Senior Facility Documents.
The terms and conditions of the Senior Facility Documents shall be reasonably
satisfactory to the Lenders.
(t) The aggregate amount of fees and expenses payable by the Choice One
Companies in connection with the Transaction shall not exceed $25,000,000.
(u) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Choice One
Company, the authorization of the Transaction and any other legal matters
relating to the Choice One Companies, the Loan Documents or the Transaction, all
in form and substance satisfactory to the Administrative Agent and its counsel.
Promptly after the Effective Date occurs, the Administrative Agent shall notify
the Borrower and the Lenders thereof, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lenders to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 9.02) at or before 5:00
p.m., New York City time, on November 30, 2000 (and, if such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).
Section 4.02 Conditions to Borrowing. The obligation of each Lender to
make a Loan on each Borrowing Date is subject to receipt of the Borrower's
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of the Borrower set forth in the
Loan Documents shall be true in all material aspects on and as of such Borrowing
Date, except for any representation and warranty made as of an earlier date,
which representation and warranty shall be true on and as of such earlier date.
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(b) At the time of and immediately after giving effect to the Borrowing, no
Default shall have occurred and be continuing.
(c) The Effective Date shall have occurred on or prior to November 30,
2000.
(d) Solely if such Borrowing Date is the Bridge Borrowing Date and the
aggregate principal amount of the Bridge Loans to be made on such date is less
than the aggregate amount of the Bridge Commitments then in effect, the Borrower
shall have delivered to each Lender, at least five Business Days prior to such
Borrowing Date, evidence reasonably satisfactory to the Lenders that the
Borrower shall have, after giving effect to the making of such Bridge Loans,
immediately available capital in such amount as shall be necessary to implement
the Business Plan.
(e) Solely if such Borrowing Date is the Bridge Borrowing Date, the
Administrative Agent (or its counsel) shall have received from the Borrower
either (i) a counterpart of the Escrow Agreement signed on behalf of the
Borrower or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of the
Escrow Agreement) that the Borrower has signed a counterpart of the Escrow
Agreement.
(f) Solely if such Borrowing Date is the Bridge Borrowing Date, the
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of
special regulatory counsel for the Borrower, as reasonably agreed upon by
counsel for the Borrower and the Administrative Agent.
(g) Solely if such Borrowing Date is the Rollover Borrowing Date, the
Administrative Agent and the Borrower shall have entered into a Registration
Rights Agreement reasonably satisfactory to the Borrower and the Required
Lenders in connection with the Rollover Loans.
(h) Solely if such Borrowing Date is the Rollover Borrowing Date, the
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Rollover Borrowing
Date) of counsel for the Borrower, as reasonably agreed upon by counsel for the
Borrower and the Administrative Agent.
The Borrowing shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in clauses (a) and (b)
of this Section.
ARTICLE 5
AFFIRMATIVE COVENANTS
Until all the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Borrower covenants and agrees with the Lenders that:
Section 5.01 Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
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(a) as soon as practicable and in any event within ninety days after the
end of each Fiscal Year, the Borrower's Form 10-K, which will include an audited
consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and audited by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP or another nationally recognized firm in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of the Subsidiaries or with respect
to accounting principles followed by the Borrower or any of its Subsidiaries not
in accordance with GAAP;
(b) as soon as practicable and in any event within forty-five days after
the end of each fiscal quarter of each Fiscal Year, the Borrower's Form 10-Q,
which will include an unaudited consolidated balance sheet of the Borrower and
the Subsidiaries as of the close of such fiscal quarter and unaudited
consolidated statements of income, and cash flows for the fiscal quarter then
ended and that portion of the Fiscal Year then ended, all in reasonable detail
setting forth in comparative form the corresponding figures for the preceding
Fiscal Year and prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by a Financial Officer to present
fairly in all material respects the financial condition of the Borrower and its
Subsidiaries as of their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then ended, subject to
normal year end adjustments;
(c) as soon as available but in any event within thirty days after the end
of each monthly accounting period in each Fiscal Year: (i) unaudited and
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such monthly period and for the period from the beginning of
the Fiscal Year to the end of such month, and unaudited consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of such monthly
period, setting forth in each case comparisons to the Borrower's annual budget
and the end of the preceding Fiscal Year. All such statements shall be prepared
in accordance with GAAP, consistently applied (subject to the absence of
footnote disclosures and to changes resulting from normal year-end adjustments
for recurring accruals);
(d) at each time financial statements are delivered pursuant to subsections
(a) and (b) and at such other times as the Administrative Agent shall reasonably
request, a certificate of a Responsible Officer or the treasurer of the Company
including for the quarterly certificate calculations evidencing compliance with
Section 6.12 hereof, in detail reasonably satisfactory to the Administrative
Agent;
(e) as soon as practicable and in any event within five Business Days after
its approval in accordance with the provisions of the Transaction Agreement,
each Business Plan and Approved Budget accompanied by a certificate from a
Financial Officer of the Borrower to the effect that, to the best of such
officer's knowledge, such projections are good faith estimates of the financial
condition and operations of the Borrower and its Subsidiaries for such period;
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provided, that in the event that there is no Approved Budget for any given
Fiscal Year, an annual budget shall be provided no later than February 1 of such
Fiscal Year prepared on a monthly basis and displaying anticipated statements of
income and cash flows and balance sheets and budgeted capital expenditures in
form and substance satisfactory to the Required Lenders;
(f) at each time financial statements are delivered pursuant to Section
5.01(a), a certificate of the independent public accountants certifying such
financial statements addressed to the Administrative Agent for the benefit of
the Lenders stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Event of Default or, if such is not the case, specifying such Default or Event
of Default and its nature and period of existence and including the calculations
prepared by such accountants required to establish whether or not the Company
and its Subsidiaries are in compliance with the covenant set forth in Section
6.12 as at the end of each respective period.
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Choice One Company with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be;
and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Choice
One Company, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
Section 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Choice
One Company or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any Termination Event that, alone or together with
any other Termination Events that have occurred, could reasonably be expected to
result in liabilities of the Choice One Companies in an aggregate amount
exceeding $500,000;
(d) within ten (10) Business Days after the receipt by any Choice One
Company of notice that any Communications License has been lost or canceled,
copies of any such notice accompanied by a report describing the measures
undertaken by the Choice One Companies to prevent such loss or cancellation (and
the anticipated impact, if any, that such loss or cancellation will have upon
the business of the Borrower and its Subsidiaries); and
(e) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
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Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section 5.03 Existence; Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
Section 5.04 Performance and Payment of Obligations. The Borrower will,
and will cause each of its Subsidiaries (a) to perform all its obligations under
all leases, agreements and other instruments entered into in the conduct of its
business where failure to do so could reasonably be expected to have a Material
Adverse Effect, and (b) to pay its Debt and other obligations, including Tax
liabilities, before the same shall become delinquent or in default, except where
(i) the validity or amount thereof is being contested in good faith by
appropriate proceedings and (ii) such company has set aside on its books
adequate reserves with respect thereto in accordance with GAAP.
Section 5.05 Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, keep and maintain all property useful in, and
material to, the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
Section 5.06 Books and Records; Inspection and Audit Rights. The Borrower
will, and will cause each of its Subsidiaries to, maintain a system of
accounting and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
Section 5.07 Compliance with Laws and Licences. The Borrower will, and
will cause each of its Subsidiaries to, (a) comply with all laws (including
Communications Laws, Environmental Laws, Tax laws and ERISA), rules, regulations
and orders of any Governmental Authority applicable to it or its property, and
(b) maintain and comply with the conditions of all Communications Licences held
by it, except in either case where failures to do so, in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
Section 5.08 Use of Proceeds. The proceeds of the Bridge Loans will be
used only to finance general working capital requirement of the Choice One
Companies. The proceeds of the Rollover Loans will be used only to refinance the
Bridge Loans outstanding on the Bridge
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Maturity Date and, at the option of the Borrower, to pay rollover fees payable
pursuant to Section 2.09(b).
Section 5.09 Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Effective Date, the Borrower will, within three
Business Days after such Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof
Section 5.10 Insurance. (a) The Borrower will, and cause each of its
Subsidiaries to, maintain with insurance companies that have an A.M. Best rating
of A:X or better, insurance against such risks and in such minimum amounts as
are set forth on Schedule 5.10 and any additional insurance customarily
maintained by similar businesses and as may be required by applicable laws, and
on the Effective Date and from time to time thereafter deliver to the
Administrative Agent upon its request (i) a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts and rates
of the insurance, the dates of the expiration thereof and the properties and
risks covered thereby and (ii) annually, a report from an independent insurance
broker as to the insurance then in effect.
Section 5.11 Interest Rate Protection. As promptly as practicable, and in
any event within thirty days after the Bridge Borrowing Date, the Borrower will
enter into, and thereafter for a period of at least three years will maintain in
effect, one or more interest rate protection agreements on such terms and with
such parties as shall be reasonably satisfactory to the Administrative Agent,
the effect of which shall be to fix or limit the interest cost to the Borrower
with respect to at least 50% of the maximum principal amount of the Loans that
may be outstanding hereunder.
ARTICLE 6
NEGATIVE COVENANTS
Until all the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Borrower covenants and agrees with the Lenders that:
Section 6.01 Debt; Certain Equity Securities; Lease Obligations. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Debt, except:
(i) Debt created under the Loan Documents;
(ii) Senior Facility Debt;
(iii) Debt of the Borrower or any Subsidiary incurred in connection
with a Hedging Agreement (A) required hereunder or under the Senior
Facility Documents or (B) otherwise executed to hedge against interest rate
fluctuation with a counterparty and upon terms and conditions (including
interest rate) reasonably satisfactory to the Administrative Agent;
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(iv) Debt constituting a Permanent Financing, but only to the extent
that the Net Proceeds thereof are applied in full in accordance with
Section 2.08(d);
(v) Debt existing on the Effective Date and not otherwise permitted
under or referred to in this Section 6.01 and set forth on Schedule 6.01,
but not any renewal or refinancing thereof;
(vi) Debt of the Borrower or any Subsidiary not to exceed $2,000,000
in an aggregate principal or face amount on any date of determination,
which Debt may consist of (A) Capital Lease Obligations, (B) short-term
Debt incurred in the ordinary course of business, (C) temporary overdrafts,
or (D) any other type of Debt previously approved in writing by the
Required Lenders;
(vii) Debt of the Borrower or any Subsidiary consisting of Guarantees
of Debt otherwise permitted by this Section;
(viii) (x) Debt of any Subsidiary owed to another Subsidiary or to
the Borrower and (y) Debt of the Borrower owed to any Subsidiary; and
(ix) to the extent constituting Debt, any Equity Interests permitted
to be issued pursuant to Section 6.01 (b).
(b) The Borrower will not and will not permit any Subsidiary to, issue any
preferred stock or other preferred Equity Interests, other than (i) the
Preferred Equity, (ii) additional shares of Preferred Equity issued as payment
of dividends with respect thereto and (iii) any such Equity Interests issued
pursuant to a Permanent Financing (including any convertible preferred stock
issued by the Company) so long as the Net Proceeds thereof are applied in full
in accordance with Section 2.08(d).
(c) The Borrower will not and will not permit any Subsidiary to, incur or
assume (whether pursuant to a Guarantee or otherwise) any liability for rental
payments under a lease with a lease term (as defined in Financial Accounting
Standards Board Statement No. 13, as in effect on the date hereof) of three
years or more (other than (i) Capital Leases and (ii) leases for office spaces
and Telecommunications Equipment), if after giving effect thereto, the aggregate
amount of minimum lease payments for which the Borrower and its Subsidiary are
liable will exceed $2,000,000 for any Fiscal Year under all such leases.
(d) The Borrower will not, and will not permit any Subsidiary, to create,
incur, assume or suffer to exist any Guarantee except:
(i) Guarantees of the Senior Bank Facility;
(ii) Guarantees in an amount not to exceed $1,000,000 to secure
payment or performance of customer service contracts incurred in the
ordinary course of business;
(iii) Guarantees of the Borrower with respect to any real or personal
property lease to which any Senior Facility Borrower is a party and entered
into in the ordinary course of business; provided, that no Default or Event
of Default exists on the date any
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such Guarantee is created, incurred or assumed or arises as a result
thereof and provided further, that upon entering into any such Guarantee
with respect to any lease subject to Section 6.01(c), the Borrowers shall
be in compliance with Section 6.01(c) with respect to such lease;
(iv) Guarantees of the Borrower or any Senior Facility Borrower of
any Debt of the Borrowers which is permitted by this Section 6.01(a); and
(v) Guarantees of the Company and its Subsidiaries which consist of
customary indemnification and purchase price adjustment obligations
incurred in connection with the purchase of assets or capital stock in each
case permitted hereunder.
Section 6.02 Liens. (a) The Borrower will not, and will not permit any
Subsidiary to, create or permit to exist any Lien on any property now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(i) Liens securing Senior Facility Debt;
(ii) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of
ERISA or Environmental Laws) not yet due or as to which the period of grace
(not to exceed thirty (30) days), if any, related thereto has not expired
or which are being contested in good faith and by appropriate proceedings
if adequate reserves are maintained to the extent required by GAAP;
(iii) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred
in the ordinary course of business, (i) which are not overdue for a period
of more than thirty (30) days or (ii) which are being contested in good
faith and by appropriate proceedings;
(iv) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation
or obligations (not to exceed $500,000) under customer service contracts;
(v) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of
real property, which in the aggregate are not substantial in amount and
which do not, in any case, materially detract from the value of such
property or impair the use thereof in the ordinary conduct of business;
(vi) Liens created under the Lucent Agreement and any other Liens
not otherwise permitted by or referred to in this Section 6.02 and in
existence on the Closing Date, in each case as described on Schedule 6.02;
(vii) Liens evidencing the interest of lessors under Capital Lease
Obligations permitted by Section 6.01(a)(vi) and Liens securing any
purchase money Debt permitted
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under Section 6.01(a)(vi); provided, that with respect to any such purchase
--------
money Liens, (w) such Liens shall be created substantially simultaneously
with the acquisition of the related asset, (x) such Liens do not at any
time encumber any property other than the property financed by such Debt,
(y) the amount of Debt secured thereby is not increased and (z) the
principal amount of Debt secured by any such Lien shall at no time exceed
one hundred percent (100%) of the original purchase price of such property
at the time it was acquired; and
(viii) Liens created under the Escrow Agreement.
Section 6.03 Fundamental Changes. (a) The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
liquidate or dissolve, or permit any other Person to merge into or consolidate
with it, except that (i) any Subsidiary may merge into any other Subsidiary or
into the Borrower (so long as the Borrower is the survivor to such merger), (ii)
any Subsidiary may merge into the Person such Subsidiary was formed to acquire
in connection with an acquisition permitted by Section 6.04(a)(ix), so long as
the survivor to such merger is a Subsidiary and (iii) any Subsidiary may wind-up
into any other Subsidiary or into the Borrower.
(b) The Borrower will not, and will not permit any Subsidiary to, engage in
any business except businesses of the types conducted by the Borrower and its
subsidiaries on the date of this Agreement and businesses reasonably related
thereto.
Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions.
The Borrower will not, and will not permit any Subsidiary to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly
owned Subsidiary before such merger) any Equity Interest in or evidence of
indebtedness or other security (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loan or advance
to, Guarantee any obligation of, or make or permit to exist any investment or
other interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:
(i) existing loans, advances and investments not otherwise
permitted by this Section 6.04 described on Schedule 6.04;
(ii) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency thereof maturing within 120
days from the date of acquisition thereof;
(iii) certificates of deposit maturing no more than 120 days from the
date of creation thereof issued by commercial banks incorporated under the
laws of the United States, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of "A"
or better by a nationally recognized rating agency; provided, that the
aggregate amount invested in such certificates of deposit shall not at any
time exceed $5,000,000 for any one such certificate of deposit and
$10,000,000 for any one such bank;
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(iv) time deposits maturing no more than 30 days from the date of
creation thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum
amounts of insurance thereunder;
(v) commercial paper maturing no more than 120 days from the date
of creation thereof and currently having the highest credit rating
obtainable from S&P or from ▇▇▇▇▇'▇;
(vi) investments by the Borrower and its Subsidiaries in Equity
Interests in Persons that are their respective subsidiaries immediately
prior to the date of such investment and investments by any Subsidiary in
another Subsidiary;
(vii) loans or advances made by the Borrower to any Subsidiary or
made by any Subsidiary to the Borrower or any other Subsidiary;
(viii) Guarantees constituting Debt permitted by Section 6.01;
(ix) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(x) subject to compliance with the other applicable provisions of
the Loan Documents, investments by the Borrower in the form of acquisitions
of all or substantially all of the business or a line of business (by way
of acquisition of capital stock or other equity interests only) of any
other Person, and investments by any Subsidiary in the form of acquisitions
of all or substantially all of the business or a line of business (whether
by the acquisition of capital stock, assets or any combination thereof) of
any other Person, in each case if such acquisition has been previously
approved in writing by the Required Lenders; provided that if the aggregate
consideration (including cash, debt, capital stock and any eam-out) for any
such acquisition does not exceed $5,000,000 and such aggregate
consideration, together with the aggregate consideration with respect to
all other acquisitions that have been consummated after the date hereof in
reliance in this proviso does not exceed $10,000,000, then no such consent
shall be required so long as no Default or Event of Default shall be in
existence or would occur after giving effect thereto;
(xi) loans and advances to directors, officers and employees of the
Borrower and the Subsidiaries in the ordinary course of business; provided,
that the aggregate outstanding amount of all investments under this clause
(xi) shall not exceed $500,000 at any one time; and
(xii) any investment consisting of the funds (and the interest
thereon) deposited in the Escrow Account of the Borrower permitted
hereunder escrowed or set aside in any escrow account or restricted account
for the purpose of paying interest accrued thereon.
Section 6.05 Asset Sales. The Borrower will not, and will not permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any property,
including any Equity Interest owned by
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it, nor will the Borrower permit any Subsidiary to issue any additional Equity
Interest in such Subsidiary, except:
(a) sales of assets no longer used or usable in the ordinary course of
business of the Borrower or any Subsidiary;
(b) the transfer of assets to any wholly-owned Subsidiary pursuant to
6.03(iii);
(c) the sale or discount without recourse by any Subsidiary of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof; and
(d) any asset sale not referenced above under this Section 6.05 so long as
such sale is in the ordinary course of business and the Net Proceeds thereof
are, if applicable, applied in accordance with Section 2.08; provided that the
aggregate Net Proceeds from such sales shall not exceed $1,000,000 during any
period of four consecutive fiscal quarters hereafter.
Section 6.06 Sale and Leaseback Transactions. The Borrower will not, and
will not permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.
Section 6.07 Restricted Payments; Certain Payments of Debt. (a) The
Borrower will not and will not permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except that:
(i) the Borrower and its Subsidiaries may make payments to
Affiliates of fees or compensation for services which are in the nature of
management, corporate overhead or administrative services to the extent
such payments are reflected in the then effective Approved Budget or
Business Plan and do not exceed arm's-length pricing in an aggregate amount
not to exceed $500,000 in any Fiscal Year;
(ii) the Borrower and its Subsidiaries may pay dividends (including
paid-in-kind dividends) on any shares of its capital stock in shares of
capital stock of the same class as (or a class junior to) such class of
capital stock;
(iii) any Subsidiary may declare and pay dividends and make any other
distribution of cash, property or assets to any other Subsidiary or to the
Borrower; and
(iv) the Borrower may repurchase its capital stock owned by employees
or former employees so long as (x) no Event of Default has occurred and is
in existence hereunder at the time of such repurchase or would occur after
giving effect thereto and (y) the aggregate amount paid, or proposed to be
paid, by the Borrower for such repurchase, when aggregated with all
previous repurchases of its capital stock made since the date hereof, does
not exceed $1,000,000 per year.
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(b) The Borrower will not and will not permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of principal of or interest on
any Debt, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any Debt, except (i) payment of regularly scheduled interest and principal
payments as and when due in respect of any Senior Facility Debt and (ii)
optional prepayments of Senior Facility Debt constituting revolving loans made
under the total revolving credit commitment as in effect on the date hereof (it
being understood that payments such as break funding payments, tax gross-up
payments, indemnity payments, reimbursement of expenses payments of fees and
like payments are not restricted by the provisions of this subsection (b)).
Section 6.08 No Change in Accounting Policies. The Borrower will not
change its accounting policies except as authorized by the Required Lenders or
required by GAAP.
Section 6.09 Transactions with Affiliates. The Borrower will not and will
not pen-nit any Subsidiary to, sell, lease or otherwise transfer any property
to, or purchase, lease or otherwise acquire any property from, or otherwise
engage in any other transaction with, any of its Affiliates, except (a)
transactions in the ordinary course of business that are at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, and (b) any
Restricted Payment permitted by Section 6.07.
Section 6.10 Restrictive Agreements. The Borrower will not and will not
permit any Subsidiary to, directly or indirectly, enter into or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition on (a) the ability of any Choice One Company to create or permit to
exist any Lien on any of its property, or (b) the ability of any Subsidiary to
pay dividends or other distributions with respect to any shares of its capital
stock or to make or repay loans or advances to the Borrower or any other
Subsidiary or to Guarantee Debt of the Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by any Loan Document, or any Preferred Equity Document, or any
Senior Facility Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided that such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of this Section shall not apply to restrictions or
conditions imposed by any agreement relating to secured Debt permitted by this
Agreement if such restrictions or conditions apply only to the property securing
such Debt and (v) clause (a) of this Section shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
Section 6.11 Amendment of Material Documents. The Borrower will not and
will not permit any Subsidiary to, amend, modify or waive any of its rights
under (a) its certificate of incorporation, by-laws or other organizational
documents (including without limitation the certificate of designation with
respect to the Preferred Equity), (b) the Merger Agreement or any
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other document relating to the Acquisition or (c) the Senior Facility Documents
unless any of the foregoing actions in any respect would not reasonably be
expected to have a Materially Adverse Effect.
Section 6.12 Capital Expenditures. (a) Until all of the Loans have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 9.02 hereof, during the Stage 1
Covenant Period, the Borrower will not, as of the end of any Fiscal Year, permit
Capital Expenditures for such Fiscal Year to exceed the corresponding amount set
forth below:
===================================================================
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
===================================================================
12/31/00 138,500
===================================================================
12/31/01 126,500
===================================================================
12/31/02 84,000
===================================================================
12/31/03 70,000
===================================================================
12/31/04 67,000
===================================================================
12/31/05 64,000
===================================================================
12/31/06 67,000
===================================================================
12/31/07 70,000
===================================================================
12/31/08 62,000
; provided that if the Borrower makes Capital Expenditures in any Fiscal Year in
an amount less than the amount set forth above for any such Fiscal Year (such
unused amount for any single Fiscal Year, or the cumulative unused amount for
any number of Fiscal Years, as applicable, referred to below as the "Stage 1
Carryover Amount"), then (i) the Borrower may make Capital Expenditures in any
succeeding fiscal year in an amount not to exceed the sum of (A) the amount set
forth above for such fiscal year and (B) the Stage 1 Carryover Amount and (ii)
for purposes of determining whether any Capital Expenditure exceeds the maximum
amount permitted for any given Fiscal Year, the Capital Expenditure for such
Fiscal Year shall be applied first to the Stage 1 Carryover Amount then
outstanding.
(b) Until all of the Loans have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 9.02 hereof, during the Stage 2 Covenant Period (during which time
the covenants set forth in clause (a) of this Section 6.12 shall cease to be
applicable) the Borrower will not, as of the end of any Fiscal Year, permit
Capital Expenditures for such Fiscal Year to exceed the corresponding amount set
forth below:
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===================================================================
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
===================================================================
12/31/00 138,500
===================================================================
12/31/01 126,500
===================================================================
12/31/02 84,000
===================================================================
12/31/03 70,000
===================================================================
12/31/04 67,000
===================================================================
12/31/05 64,000
===================================================================
12/31/06 67,000
===================================================================
12/31/07 70,000
===================================================================
12/31/08 62,000
; provided, that if the Borrower make Capital Expenditures in any Fiscal Year
(other than any Fiscal Year all or a part of which was included in the Stage 1
Covenant Period) in an amount less than the amount set forth above for any such
Fiscal Year (such unused amount for any single Fiscal Year, or the cumulative
unused amount for any number of Fiscal Years, or applicable, referred to below
as the "Stage 2 Carryover Amount"), then (i) the Borrower may make Capital
Expenditures in any succeeding fiscal year in an amount not to exceed the sum of
(A) the amount set forth above for such fiscal year and (B) the Stage 2
Carryover Amount and (ii) for purposes of determining whether any Capital
Expenditure exceeds the maximum amount permitted for any given Fiscal Year, the
Capital Expenditure for such Fiscal Year shall be applied first to the Stage 2
Carryover Amount then outstanding.
ARTICLE 7
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when the same
shall become due, whether at the due date thereof or at a date fixed for
repayment or redemption thereof or otherwise;
(b) the Borrower shall fail to pay when due any interest or any premium on
any Loan or any fee or other amount (except an amount referred to in clause (a)
above) payable under any Loan Document, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation, warranty or certification made or deemed made by or
on behalf of any Choice One Company in or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect or misleading in any
material respect when made or deemed made;
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(d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Sections 5.01, 5.02, 5.04 (with respect to the existence of the
Borrower) or 5.08 or in Article 6;
(e) any Choice One Company shall fail to make any payment (whether of
principal or interest or premium and regardless of amount) in respect of any
Material Debt beyond the period of grace if any, provided in the instrument or
agreement under which such Material Debt was created;
(f) (i) any event or condition occurs that results in any Material Debt
(other than Debt under the Senior Bank Facility) becoming due before its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any such Material
Debt or any trustee or agent on its or their behalf to cause any such Material
Debt to become due, before its scheduled maturity or (ii) any Specified Event
occurs that results in any Debt under the Senior Bank Facility becoming due (or
being required to be cash collateralized) before its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any such Debt under the Senior Bank Facility or
any trustee or agent on its or their behalf to cause any such Debt to become due
(or to required it to be cash collateralized), before its scheduled maturity.
For purposes of this subsection (f), "Specified Event" means any event or
condition with respect to a financial covenant applicable to any Debt under the
Senior Bank Facility (which covenants as of the Effective Date are contained in
Article X thereof);
(g) a case or other proceeding shall be commenced against any Choice One
Company in any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for any Choice One Company or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered;
(h) Any Choice One Company shall (i) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in effect), (ii) file a petition
seeking to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for adjustment
of debts, (iii) consent to or fail to contest in a timely and appropriate manner
any petition filed against it in an involuntary case under such bankruptcy laws
or other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver custodian, trustee, or liquidator of itself or of a substantial part of
its property, domestic or foreign, (v) admit in writing its inability to pay its
debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing;
(i) (i) one or more judgments for the payment of money in an aggregate
amount exceeding $2,000,000 shall be rendered against any Choice One Company or
any combination
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thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to attach or levy upon any asset of any
Choice One Company to enforce any such judgment, or (ii) a non-monetary judgment
shall be rendered against any Choice One Company that, when taken together with
all other non-monetary judgments that have been so rendered, could reasonably be
expected to result in a Material Adverse Effect;
(j) a Termination Event shall occur; or
(k) a Change in Control shall occur at any date prior to the Rollover
Borrowing Date; or
(l) any Communications Licence of any Choice One Company shall expire,
terminate, be cancelled or otherwise lost or any application therefor be
rejected, which event could reasonably be expected to have a Material Adverse
Effect.
then, and in every such event (except an event with respect to the Borrower
described in clause (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder and under the other
Loan Documents, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are waived by the
Borrower; and in case of any event with respect to the Borrower described in
clause (g) or (h) above, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder and under
the other Loan Documents, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
waived by the Borrower. In addition, if at any time the Bridge Loans shall have
been accelerated, the Administrative Agent shall give the Escrow Agent notice
thereof in accordance with the provisions of the Escrow Agreement, and shall
credit any amounts received from the Escrow Agent pursuant to the Escrow
Agreement in accordance with the provisions of the Escrow Agreement.
ARTICLE 8
THE ADMINISTRATIVE AGENT
Section 8.01 Appointment and Authorization. Each of the Lenders
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
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Section 8.02 Rights and Powers as a Lender. The bank serving as the
Administrative Agent shall, in its capacity as a Lender, have the same rights
and powers as any other Lender and may exercise the same as though it were not
the Administrative Agent. Such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with any Choice One
Company or Affiliate thereof as if it were not the Administrative Agent
hereunder.
Section 8.03 Limited Duties and Responsibilities. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required in writing to exercise by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for any failure to disclose, any information relating to any
Choice One Company that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article 4 or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
Section 8.04 Authority to Rely on Certain Writings, Statements and Advice.
The Administrative Agent shall be entitled to rely on, and shall not incur any
liability for relying on, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent also may rely
on any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
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Section 8.05 Sub-Agents and Related Parties. The Administrative Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it. The Administrative Agent and any
such sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding Sections of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Section 8.06 Resignation; Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section, the Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank.
Upon acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed by the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or on-fitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.
Section 8.07 Credit Decisions by Lenders. Each Lender acknowledges that
it has, independently and without reliance on the Administrative Agent or any
other Lender and based on such 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 on the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
on this Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
ARTICLE 9
MISCELLANEOUS
Section 9.01 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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(a) if to the Borrower, to it at Choice One Communications Inc., 1 HSBC
Plaza, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention of
▇▇▇▇ ▇▇▇▇▇▇, Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Administrative Agent, to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇ (Telecopy No. 212 761
0592); and
(c) if to any Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the Administrative Agent and the Borrower.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement will be deemed to have been given on the
date of receipt.
Section 9.02 Waivers; Amendments. (a) No failure or delay by any Lender
Party in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Lender Parties under the Loan Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any Credit Party
therefrom shall in any event be effective unless the same shall be permitted by
subsection (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether any Lender Party
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of each
affected Lender, (ii) reduce the principal amount of any Loan or reduce the rate
of interest thereon, or reduce any fee payable hereunder, without the written
consent of each Lender Party affected thereby, (iii) postpone the maturity of
any Loan, or any scheduled date of payment of the principal amount of any Loan
under Article 2, or any date for the payment of any interest or fee payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender Party, and (iv) change any of the provisions of this
Section or the percentage set forth in the definition of "Required Lenders" or
any other provision of any Loan Document specifying the number or percentage of
Lenders required to waive, amend or modify any right thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender as the case may be. Notwithstanding the foregoing, any provision of
this Agreement may be amended by an agreement in writing entered into by the
Borrower, the Required Lenders and the Administrative Agent if (i) by the terms
of such
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agreement the Commitment of each Lender not consenting to the amendment provided
for therein shall terminate upon the effectiveness of such amendment and (ii) at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
made by it and all other amounts owing to it or accrued for its account under
this Agreement.
Section 9.03 Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent in connection with the
arrangement and syndication of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by any Lender, including the reasonable fees,
charges and disbursements of any counsel for any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents
(including its rights under this Section) or the Loans, including all such
reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of the Loans. or negotiations in respect of the Loans.
(b) The Borrower shall indemnify each of the Lender Parties and their
respective Related Parties (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Financing
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Substances on or from any property currently or formerly owned or
operated by the Borrower or any Subsidiary, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not be
available to any Indemnitee to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from such
Indemnitee's gross negligence or wilful misconduct.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent under subsection (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, such
Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such. For purposes hereof,
a Lender's "pro rata share" shall be determined based upon its share of the sum
of the outstanding Loans and unused Commitments at the time.
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(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Financing Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable within 10 days
after written demand therefor.
Section 9.04 Successors and Assigns. (a) The provisions of this Agreement
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (except the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly provided herein, the
Related Parties of the Lender Parties) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of any
Commitment it has at the time and any Loans at the time owing to it); provided
that (i) except in the case of an assignment to a Lender or an Affiliate of a
Lender or a Related Fund of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date on which the relevant Assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, and (iii) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment, together with a processing and recordation fee of $3,500;
provided, that only one such fee shall be due in respect of a simultaneous
assignment to more than one Related Fund, and (iv) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrower otherwise
required under this subsection shall not be required if an Event of Default
under clause (g) or (h) of Article 7 has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to subsection (d) of this Section,
from and after the effective date specified in each Assignment the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment, be released from its obligations under
this Agreement (and, in the case of an Assignment covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.13, and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (e)
of this Section. Each Lender shall give the Borrower prompt notice of any
assignment of the Commitment or the
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Loans of such Lender effected by such Lender pursuant to this subsection;
provided that failure by such Lender to provide any such notice shall not affect
the validity of such assignment or the rights of the assignee with respect
thereto.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in New York City a copy of each
Assignment delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the parties
thereto may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by any
party hereto at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment executed by an
assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in subsection (b) of this Section and
any written consent to such assignment required by subsection (b) of this
Section, the Administrative Agent shall accept such Assignment and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this subsection.
(e) Any Lender may, without the consent of the Borrower or any other Lender
Party, sell participations to one or more banks or other entities
("Participants") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower and the other Lender Parties shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
subsection (f) of this Section, each Participant shall be entitled to the
benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
that such Participant agrees to be subject to Section 2.15(c) as though it were
a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.12 or 2.13 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 2.13 unless the
Borrower is
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notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.13 as though
it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
Section 9.05 Survival. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to the Loan Documents
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of the Loan Documents and the making of
any Loans, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that any Lender Party may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Commitments have not expired or terminated. The provisions of Sections
2.12, 2.13, 2.14 and 9.03 and Article 8 shall survive and remain in full force
and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.
Section 9.06 Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.
Section 9.07 Severability. If any provision of any Loan Document is
invalid, illegal or unenforceable in any jurisdiction then, to the fullest
extent permitted by law, (i) such provision shall, as to such jurisdiction, be
ineffective to the extent (but only to the extent) of such invalidity,
illegality or unenforceability, (ii) the other provisions of the Loan Documents
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Lender Parties in order to carry out the
intentions of the parties thereto as nearly as may be possible and (iii) the
invalidity, illegality or unenforceability of any such provision in any
jurisdiction shall not affect the validity, legality or enforceability of such
provision in any other jurisdiction.
Section 9.08 Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is 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 obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under
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this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender may have.
Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) The Borrower irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to any Loan Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the extent permitted by law, in such Federal court. Each party hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that any Lender Party may otherwise have to
bring any action or proceeding relating to any Loan Document against any Credit
Party or their respective properties in the courts of any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in subsection (b) of this Section. Each party hereto irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of any such suit, action or proceeding in any such
court.
(d) Each party hereto irrevocably consents to service of process in the
manner provided for notices in Section 9.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
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Section 9.11 Headings. Article and Section headings and the Table of
Contents herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 9.12 Confidentiality. Each Lender Party agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedy hereunder or any suit, action
or proceeding relating to this Agreement or any other Loan Document or the
enforcement of any right hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information either (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to any Lender Party on a nonconfidential basis from a source other
than the Borrower. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to any Lender Party on a
nonconfidential basis before disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CHOICE ONE COMMUNICATIONS INC.
By: ________________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING INC.,
individually and as Administrative Agent.
By: ________________________________________
Name:
Title:
FIRST UNION INVESTORS, INC.
By: ________________________________________
Name:
Title:
CIBC INC.
By: ________________________________________
Name:
Title:
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Schedule 2.01
Commitment Schedule
Name of Lender Total
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING INC. $ 90,000,000
FIRST UNION INVESTORS, INC. $ 45,000,000
CIBC INC. $ 45,000,000
Total $180,000,000