EXHIBIT 99.4
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CREDIT AGREEMENT
dated as of
January 6, 2000,
among
SPLITROCK SERVICES, INC.,
The Lenders Party Hereto
and
CITICORP USA, INC.,
as Administrative Agent and Collateral Agent
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TABLE OF CONTENTS
Page
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ARTICLE I Definitions
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SECTION 1.01. Defined Terms............................................. 1
SECTION 1.02. Terms Generally........................................... 12
SECTION 1.03. Accounting Terms; GAAP.................................... 12
ARTICLE II The Credits
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SECTION 2.01. Commitments............................................... 13
SECTION 2.02. Revolving Loans and Borrowings............................ 13
SECTION 2.03. Requests for Borrowings................................... 13
SECTION 2.04. [Intentionally Omitted.................................... 13
SECTION 2.05. [Intentionally Omitted.................................... 13
SECTION 2.06. Funding of Borrowings..................................... 14
SECTION 2.07. [Intentionally Omitted.................................... 14
SECTION 2.08. Termination and Reduction of Commitments.................. 14
SECTION 2.09. Repayment of Revolving Loans; Evidence of Debt............ 15
SECTION 2.10. [Intentionally Omitted.................................... 16
SECTION 2.11. Prepayment of Revolving Loans............................. 16
SECTION 2.12. Fees...................................................... 16
SECTION 2.13. Interest.................................................. 17
SECTION 2.14. [Intentionally Omitted.................................... 17
SECTION 2.15. Increased Costs........................................... 17
SECTION 2.16. [Intentionally Omitted.................................... 18
SECTION 2.17. Taxes..................................................... 18
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs 19
SECTION 2.19. Mitigation Obligations; Replacement of Lenders............ 20
ARTICLE III Representations and Warranties
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SECTION 3.01. Organization; Powers...................................... 21
SECTION 3.02. Authorization; Enforceability............................. 21
SECTION 3.03. Governmental Approvals; No Conflicts...................... 22
SECTION 3.04. Financial Condition; No Material Adverse Change........... 22
SECTION 3.05. Properties................................................ 22
SECTION 3.06. Litigation and Environmental Matters...................... 23
SECTION 3.07. Compliance with Laws and Agreements....................... 23
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SECTION 3.08. Investment and Holding Company Status............. 23
SECTION 3.09. Taxes............................................. 23
SECTION 3.10. ERISA............................................. 23
SECTION 3.12. Subsidiaries...................................... 24
SECTION 3.13. Insurance......................................... 24
SECTION 3.14. Labor Matters..................................... 24
SECTION 3.15. Solvency.......................................... 24
SECTION 3.16. Year 2000......................................... 25
ARTICLE IV Conditions
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SECTION 4.01. Effective Date.................................... 25
SECTION 4.02. Each Credit Event................................. 26
ARTICLE V Affirmative Covenants
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SECTION 5.01. Merger Agreement.................................. 27
SECTION 5.02. Notices of Material Events 27
SECTION 5.03. Information....................................... 28
SECTION 5.04. Use of Proceeds................................... 28
SECTION 5.05. Additional Subsidiaries........................... 28
SECTION 5.06. Further Assurances................................ 29
ARTICLE VI Indenture Covenants
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SECTION 6.01. Indenture Covenants............................... 29
ARTICLE VII Events of Default
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ARTICLE VIII The Administrative Agent
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ARTICLE IX Miscellaneous
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SECTION 9.01. Notices........................................... 34
SECTION 9.02. Waivers; Amendments............................... 34
SECTION 9.03. Expenses; Indemnity; Damage Waiver................ 35
SECTION 9.04. Successors and Assigns............................ 36
SECTION 9.05. Survival.......................................... 39
SECTION 9.06. Counterparts; Integration; Effectiveness 39
SECTION 9.07. Severability...................................... 40
SECTION 9.08. Right of Setoff................................... 40
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS........................................ 40
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SECTION 9.10. WAIVER OF JURY TRIAL................................ 41
SECTION 9.11. Headings............................................ 41
SECTION 9.12. Confidentiality..................................... 41
SECTION 9.13. Interest Rate Limitation............................ 42
SCHEDULES:
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Schedule 1.01 -- Material Adverse Effect
Schedule 2.01 -- Lenders and Revolving Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Perfection Certificate
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
Exhibit G -- Indenture
Exhibit H -- Form of Borrowing Request
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CREDIT AGREEMENT dated as of January 6, 2000, among
SPLITROCK SERVICES, INC., a Delaware corporation (the
"Borrower"), the LENDERS party hereto and CITICORP USA, INC., as
Administrative Agent.
The Borrower has requested that the Lenders extend credit to the
Borrower in the form of Revolving Loans (such term and each other capitalized
term used but not defined herein having the meaning given to it in Article I)
upon the terms and subject to the conditions set forth herein.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the
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following terms have the meanings specified below:
"Administrative Agent" means Citicorp USA, Inc., in its capacity as
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administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means a fluctuating interest rate per annum
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equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank, N.A. in New
York, New York, from time to time, as Citibank, N.A.'s base rate; or
(b) 0.5% per annum above the latest three-week moving average of
secondary market morning offering rates in the United States for three-
month certificates of deposit of major United States money market banks,
such three-week moving average being determined weekly on each Monday (or,
if any such day is not a Business Day, on the next succeeding Business Day)
for the three-week period ending on the next previous Friday by Citibank,
N.A. on the basis of such rates reported by certificate of deposit dealers
to and published by the
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Federal Reserve Bank of New York or, if such publications shall be
suspended or terminated, on the basis of quotations for such rates received
by Citibank, N.A. from three New York certificate of deposit dealers of
recognized standing selected by Citibank, N.A., in either case adjusted to
the nearest 1/4 of one percent or, if there is no nearest 1/4 of one
percent, to the next higher 1/4 of one percent; and
(c) for any day, 1/2 of one percent per annum above the Federal Funds
Effective Rate for such day.
"Applicable Percentage" means, with respect to any Lender, the
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percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day (a) during the period from and
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including the date hereof until and including July 6, 2000, 4.00%, (b) during
the period from and including July 7, 2000, until and including October 6, 2000,
4.50% and (c) after and including October 7, 2000, 5.00%.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Available Revolving Commitment" means, with respect to any Lender,
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such Lender's Applicable Percentage of (a) during the period from and including
March 1, 2000, to and including March 31, 2000, the lesser of $20,000,000 and
the total Revolving Commitments at such time, (b) during the period from and
including April 1, 2000, to and including April 30, 2000, the lesser of
$55,000,000 and the total Revolving Commitments at such time, (c) during the
period from and including May 1, 2000, to and including May 31, 2000, the lesser
of $85,000,000 and the total Revolving Commitments at such time, (d) during the
period from and including June 1, 2000, to and including June 30, 2000, the
lesser of $105,000,000 and the total Revolving Commitments at such time and (e)
during the period from and including July 1, 2000, to and including the
Revolving Maturity Date, the lesser of $115,000,000 and the total Revolving
Commitments at such time.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Borrower" shall have the meaning assigned to such term in the
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introductory statement hereto.
"Borrowing Request" means a request by the Borrower for a Borrowing in
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accordance with Section 2.03, in the form of Exhibit H or any other form
approved by the Administrative Agent.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed.
"Capital Expenditures" means, for any period, the additions to
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property, plant and equipment and other capital expenditures of the Borrower and
its consolidated subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP.
"Capital Lease Obligations" of any Person means the obligations of
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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 to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) prior to the termination of the Merger
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Agreement and the expiration of the survival period set forth in Section 8.03(b)
thereof, if any, the occurrence of an event that would obligate the Borrower to
pay a "Company Termination Fee" (as defined in the Merger Agreement) pursuant to
Section 8.03 of the Merger Agreement or (b) after the termination of the Merger
Agreement and the expiration of the survival period set forth in Section 8.03(b)
thereof, if any, either (i) the occurrence of a "Change of Control" under the
Indenture or (ii) the entering into of any agreement or arrangement with any
Person that, at the time of determination, has a market capitalization
(calculated by multiplying the number of shares of outstanding common stock of
such Person by the market price of such shares at the time of determination) of
$5,000,000,000 or more providing for a transaction that if completed would
result in the occurrence of) a "Change of Control" under the Indenture.
"Change in Law" means (a) the adoption of any law, rule or regulation
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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 the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(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 the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Collateral" means any and all "Collateral", as defined in any
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applicable Security Document.
"Collateral Agent" shall have the meaning given to such term in the
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Security Agreement.
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"Collateral and Guarantee Requirement" means the requirement that:
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(a) the Administrative Agent shall have received from each Loan Party
(other than, in the case of clause (i), the Borrower) either (i) a
counterpart of each of (A) the Guarantee Agreement, (B) the Indemnity,
Subrogation and Contribution Agreement, (C) the Pledge Agreement and (D)
the Security Agreement duly executed and delivered on behalf of such Loan
Party or (ii) in the case of any Person that becomes a Loan Party after the
Effective Date, a supplement to each of the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement and
the Security Agreement, in each case in the form specified therein, duly
executed and delivered on behalf of such Loan Party;
(b) all outstanding Equity Interests of each Subsidiary owned by, or
on behalf of, any Loan Party shall have been pledged pursuant to the Pledge
Agreement (except that the Loan Parties shall not be required to pledge
more than 65% of the outstanding voting Equity Interests of any Foreign
Subsidiary to the extent that the pledge of any greater percentage could
result in adverse tax consequences to the Borrower or any Subsidiary) and
the Administrative Agent shall have received certificates or other
instruments representing all such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed in
blank;
(c) all Indebtedness of the Borrower and each Subsidiary that is
owing to any Loan Party shall be evidenced by a promissory note and shall
have been pledged pursuant to the Pledge Agreement and the Administrative
Agent shall have received all such promissory notes, together with
instruments of transfer with respect thereto endorsed in blank;
(d) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create the
Liens intended to be created by the Security Agreement and the Pledge
Agreement and perfect such Liens to the extent required by, and with the
priority required by, the Security Agreement and the Pledge Agreement,
shall have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording;
(e) each Loan Party shall have obtained all material consents and
approvals required to be obtained by it in connection with the execution
and delivery of all Security Documents to which it is a party, the
performance of its obligations thereunder and the granting by it of the
Liens thereunder; and
(f) if requested by the Administrative Agent at any time, the
Administrative Agent shall have received, within 45 days of such request,
(i)
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counterparts of a mortgage in a form acceptable to the Administrative Agent
with respect to any material real property owned or leased by the Borrower
or any of the Subsidiaries duly executed and delivered by the record owner
of such property, (ii) a policy or policies of title insurance issued by a
nationally recognized title insurance company insuring the Lien of each
such mortgage as a valid first Lien on the mortgaged property described
therein, free of any other Liens except as expressly permitted by Section
6.02, together with such endorsements, coinsurance and reinsurance as the
Administrative Agent or the Required Lenders may reasonably request, and
(iii) such surveys, abstracts, appraisals, legal opinions and other
documents as the Administrative Agent or the Required Lenders may
reasonably request with respect to any such mortgage or mortgaged property.
"Control" means the possession, directly or indirectly, of the power
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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.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
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"Default" means any event or condition that constitutes an Event of
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Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"Dollars" or "$" refers to lawful money of the United States of
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America.
"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
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ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to
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any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
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interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person and any
options, warrants or other rights to acquire such Equity Interests, but
excluding any debt securities convertible into such Equity Interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
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Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Event of Default" has the meaning assigned to such term in
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Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
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Lender or any other recipient of any payment to be 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 of America, 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 of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that (i) is in effect and would apply to
amounts payable to such Foreign Lender at the time such Foreign Lender
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(other than an assignee pursuant to a request by the Borrower under Section
2.19(b)), 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), other than any
withholding tax imposed on any payment by the Borrower to the extent that such
Foreign Lender (or its assignor, as the case may be) was entitled, at the time
of designation of a new lending office (or assignment, as the case may be), to
receive additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Federal Funds Effective Rate" means, for any day, the weighted
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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 for any day that is a 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
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accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws of
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a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
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laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
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States of America.
"Governmental Authority" means the government of the United States of
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America, 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, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
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obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
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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 Indebtedness or other obligation or to
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purchase (or to 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 Indebtedness 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 Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided that the term
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"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, substantially in
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the form of Exhibit C, made by the Subsidiary Loan Parties in favor of the
Administrative Agent for the benefit of the Secured Parties.
"Hazardous Materials" means all explosive or radioactive substances
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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 derivative or similar agreement or
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arrangement, including any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
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obligations of such Person for borrowed money or with respect to deposits or
advances of any kind (other than deposits made or advances given by customers in
the ordinary course of business of such Person), (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
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"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Indemnity, Subrogation and Contribution Agreement" means the
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Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Indenture" means the Indenture dated as of July 24, 1998, between the
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Borrower and Bank of Montreal Trust Company, a New York banking corporation, as
such indenture is in effect on the date hereof.
"Interest Payment Date" means the last day of each calendar month.
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"Lenders" means the Persons listed on Schedule 2.01 and any other
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Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
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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 Guarantee Agreement, the
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Indemnity, Subrogation and Contribution Agreement and the other Security
Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
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"Material Adverse Effect" means, subject to Schedule 1.01, (a) a
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Company Material Adverse Effect or (b) a material adverse effect on (i) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (ii) the rights of or benefits available to the Lenders under any
Loan Document. For purposes hereof, the term "Company Material Adverse Effect"
shall mean a Company Material Adverse Effect (as defined in the Merger Agreement
but without regard to clause (iii) of the definition of Company Material Adverse
Effect set forth in the Merger Agreement).
"Material Indebtedness" means Indebtedness (other than the Revolving
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Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and the Subsidiaries in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Indebtedness, the
"principal
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amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"▇▇▇▇▇▇" means McLeodUSA Incorporated, a Delaware corporation.
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"Merger Agreement" means the Agreement and Plan of Merger dated as of
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January 6, 2000, between the Borrower and ▇▇▇▇▇▇.
"Multiemployer Plan" means a multiemployer plan as defined in Section
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4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
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received in respect of such event, including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty or other insured damage, insurance proceeds, and (iii) in the case of a
condemnation or similar event, condemnation awards and similar payments, net of
(b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the
Borrower and the Subsidiaries to third parties (other than Affiliates) in
connection with such event (including out-of-pocket legal, title and recording
tax expenses and commissions), (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made by the Borrower and the Subsidiaries as a result of
such event to repay Indebtedness (other than Revolving Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event,
and (iii) the amount of all taxes paid (or reasonably estimated to be payable)
by the Borrower and the Subsidiaries, and the amount of any reserves established
by the Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower).
"Obligations" has the meaning assigned to the term "Loan Document
-----------
Obligations" in the Security Agreement.
"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.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Exhibit B
----------------------
or
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any other form approved by the Collateral Agent.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the
----------------
form of Exhibit E, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent for the benefit of the Secured Parties.
"Prepayment Event" means:
----------------
(a) any Asset Disposition (as defined in the Indenture) by the
Borrower or any of the Subsidiaries; or
(b) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or asset of the Borrower or any Subsidiary, but only to the extent that the
Net Proceeds therefrom have not been applied to repair, restore or replace
such property or asset within 120 days after such event, other than any
single event or series of related events resulting in aggregate Net
Proceeds not exceeding $1,000,000; or
(c) the incurrence by the Borrower or any Subsidiary of any
Indebtedness pursuant to Section 4.03(a) of the Indenture; or
(d) the issuance by the Borrower or any Subsidiary of any Equity
Interests, or the receipt by the Borrower or any Subsidiary of any capital
contribution, other than any such issuance of Equity Interests to, or
receipt of any such capital contribution from, the Borrower or a
Subsidiary.
"Register" has the meaning set forth in Section 9.04(c).
--------
"Related Fund" means, with respect to any Lender that is a fund or
------------
trust that makes, buys or invests in commercial loans, any other fund or trust
that makes, buys or invests in commercial loans and is managed by the same
investment advisor as such Lender.
"Related Parties" means, with respect to any specified Person, such
---------------
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Person's Affiliates and, if applicable, Related Funds and the respective
directors, officers, employees, agents and advisors of such Person and such
Person's Affiliates.
"Release" means any release, spill, emission, leaking, dumping,
-------
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Required Lenders" means, at any time, Lenders having Revolving
----------------
Exposures and unused Revolving Commitments representing more than 50% of the sum
of the total Revolving Exposures and unused Revolving Commitments at such time.
"Revolving Availability Period" means the period from and including
-----------------------------
the later of the Effective Date and March 1, 2000, to but excluding the earlier
of the Revolving Maturity Date and the date of termination of the Revolving
Commitments.
"Revolving Borrowing" means Revolving Loans made on the same date.
-------------------
"Revolving Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make Revolving Loans hereunder, expressed
as an amount representing the maximum aggregate amount of such Lender's
Revolving Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 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 Revolving Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Lenders' Revolving Commitments is $115,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
------------------
the sum of the outstanding principal amount of such Lender's Revolving Loans at
such time.
"Revolving Loan" means a loan made pursuant to Section 2.01.
--------------
"Revolving Maturity Date" means March 31, 2001, or, if such day is not
-----------------------
a Business Day, the first Business Day thereafter.
"Secured Parties" has the meaning assigned to such term in the
---------------
Security Agreement.
"Security Agreement" means the Security Agreement, substantially in
------------------
the form of Exhibit F, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent for the benefit of the Secured Parties.
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"Security Documents" means the Security Agreement, the Pledge
------------------
Agreement, the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.06 to secure any of the
Obligations.
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association 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, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) 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 (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
----------
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
---------------------
Subsidiary.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by each
------------
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Revolving Loans, and the use of the proceeds thereof.
"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 shall
----------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include 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
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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 construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; 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 to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted 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 II
The Credits
-----------
SECTION 2.01. Commitments. Subject to the terms and conditions set
------------
forth herein, each Lender agrees to make Revolving Loans to the Borrower from
time to time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender's Revolving Exposure at such time
exceeding such Lender's Available Revolving Commitment at such time. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Revolving Loans and Borrowings. (a) Each Revolving
-------------------------------
Loan shall be made by the Lenders ratably in accordance with their respective
Revolving Commitments. The failure of any Lender to make any Revolving Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder, provided that the Revolving Commitments of the Lenders are several
--------
and no Lender shall be responsible for any other Lender's failure to make
Revolving Loans as required.
(b) At the time that each Revolving Borrowing is made, such Revolving
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $1,000,000, provided that a Revolving Borrowing may
--------
be in an aggregate amount that is equal to the entire unused balance of the
Total Revolving Commitments.
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SECTION 2.03. Requests for Borrowings. To request a Revolving
-------------------------
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone not later than 11:00 a.m., New York City time, one Business Day before
the date of the proposed Revolving Borrowing. Each such telephonic Revolving
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
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 Revolving Borrowing;
(ii) the date of such Revolving Borrowing, which shall be a Business
Day;
(iii) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06; and
(iv) the specific intended use or uses of the proceeds of the
Revolving Borrowing, which must be a use or uses permitted by Section 5.04.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the Lender's Revolving Loan to be made as part of the requested
Revolving Borrowing.
SECTION 2.04. [Intentionally Omitted.]
SECTION 2.05. [Intentionally Omitted.]
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make
----------------------
each Revolving Loan to be made by it hereunder on the proposed date thereof 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 will make such
Revolving Loans 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
applicable Revolving Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Revolving Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of such
Revolving Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Revolving Borrowing available to the
Administrative Agent, then the applicable Lender and the
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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 date 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 then
applicable to Revolving Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Revolving
Loan included in such Borrowing.
SECTION 2.07. [Intentionally Omitted.]
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
-----------------------------------------
previously terminated, the Revolving Commitments shall terminate on the
Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments, provided that (i) each reduction of the
--------
Revolving Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under paragraph (b) of
this Section, or any required reduction of the Revolving Commitments under
paragraph (d) of this Section, at least one Business Day prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable,
provided that a notice of termination of the Revolving Commitments delivered by
--------
the Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.
(d) On the date that is three Business Days following any date on
which any Net Proceeds are received by or on behalf of the Borrower or any
Subsidiary in respect of any Prepayment Event, the Revolving Commitments shall
be reduced, except to the extent that such a reduction would require a repayment
of Revolving Loans under Section 2.11(b) that would result in a breach of the
Indenture, in an aggregate amount equal to 100% of the amount of such Net
Proceeds, provided that, in the case of any event described in clause (a) of the
--------
definition of the term "Prepayment Event", if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to
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the effect that the Borrower and the Subsidiaries intend to apply the Net
Proceeds from such event (or a portion thereof specified in such certificate),
within 90 days after receipt of such Net Proceeds, as applicable, to acquire
real property, equipment or other tangible assets to be used in the business of
the Borrower and the Subsidiaries, and certifying that no Default has occurred
and is continuing, then no reduction of the Revolving Commitments shall be
required pursuant to this paragraph in respect of the Net Proceeds in respect of
such event (or the portion of such Net Proceeds specified in such certificate,
if applicable) except to the extent of any such Net Proceeds therefrom that have
not been so applied by the end of such 90-day period, at which time the
Revolving Commitments shall be reduced in an aggregate amount equal to the
amount of such Net Proceeds that have not been so applied.
(e) Any termination or reduction of the Revolving Commitments shall
be permanent. Each reduction of the Revolving Commitments shall be made ratably
among the Lenders in accordance with their respective Revolving Commitments.
SECTION 2.09. Repayment of Revolving Loans; Evidence of Debt. (a)
----------------------------------------------
The Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date.
(b) 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 Revolving Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Revolving Loan made hereunder, (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.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
----- -----
amounts of the obligations recorded therein, provided that the failure of any
--------
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Revolving Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Revolving Loans evidenced by such promissory note and interest thereon shall at
all times (including after assignment pursuant to Section 9.04) be represented
by one or more promissory notes in such form
-17-
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.10. [Intentionally Omitted.]
SECTION 2.11. Prepayment of Revolving Loans. (a) The Borrower shall
-----------------------------
have the right at any time and from time to time to prepay any Revolving
Borrowing in whole or in part, subject to the requirements of this Section.
(b) In the event that and on each occasion on which the sum of the
Revolving Exposures exceeds the total Revolving Commitments, the Borrower shall
prepay Revolving Borrowings in aggregate amount equal to such excess.
(c) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder, 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 Revolving 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, provided that, if a notice of optional prepayment is given
--------
in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with Section
2.08. Promptly following receipt of any such notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of
any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing as provided in Section 2.02, except
as necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Revolving
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
----
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the rate of 1.25% per annum on the average daily unused amount
of the Revolving Commitment of such Lender during the period from and including
the date hereof to but excluding the date on which such Revolving Commitment
terminates. Accrued commitment fees shall be payable in arrears on the last day
of each month of each year and on the date on which the Revolving Commitments
terminate, commencing on the first such date to occur after the date hereof.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). For purposes of computing commitment fees, a
Revolving Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans of such Lender.
(b) All fees payable hereunder shall be paid on the dates due, in
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immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees, to the Lenders entitled thereto. Fees paid shall
not be refundable under any circumstances.
SECTION 2.13. Interest. (a) All Revolving Loans shall bear interest
--------
at the Alternate Base Rate plus the Applicable Rate.
(b) Notwithstanding the foregoing, if any principal of or interest on
any Revolving Loan or any fee or other amount payable by the Borrower hereunder
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 2% plus the rate then applicable to
Revolving Loans as provided in paragraph (a) of this Section.
(c) Accrued interest on each Revolving Loan shall be payable in
arrears on each Interest Payment Date for such Revolving Loan and upon
termination of the Revolving Commitments, provided that (i) interest accrued
--------
pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Revolving Loan (other than a
prepayment of a Revolving Loan prior to the end of the Revolving Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment.
(d) All interest hereunder shall be computed on the basis of a year
of 360 days, and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. [Intentionally Omitted.]
SECTION 2.15. 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; or
(ii) impose on any Lender any other condition affecting this
Agreement;
and the result of any of the foregoing shall be to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise), then the Borrower will pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction suffered.
(b) If any Lender 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
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capital or on the capital of such Lender's holding company, if any, as a
consequence of this Agreement or the Revolving Loans 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 will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (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 shall not constitute a waiver of such Lender's right to
demand such compensation, provided that the Borrower shall not be required to
--------
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 90 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
-------- -------
or reductions is retroactive, then the 90-day period referred to above shall be
extended to include the period of retroactive effect thereof.
(e) Notwithstanding the foregoing, Section 2.17, and not this Section
2.15, is the only Section of this Agreement that deals with increased costs with
respect to Taxes.
SECTION 2.16. [Intentionally Omitted.]
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
-----
any obligation of the Borrower hereunder or under any other Loan Document 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
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) 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.
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(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
(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. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower 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) Prior to becoming a Lender hereunder or upon any Change in Law,
any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction 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 or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
--------------------------------------------------
Setoffs. (a) The Borrower shall make each payment required to be made by it
-------
hereunder or under any other Loan Document (whether of principal, interest or
fees or of amounts payable under Section 2.15 or 2.17, or otherwise) prior to
the time expressly required hereunder or under such other Loan Document for such
payment (or, if no such time is expressly required, prior to 12:00 noon, New
York City time), on the date when due, in immediately available funds, without
setoff or counterclaim. Any amounts received after such time on any date 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 2.15, 2.17 and 9.03 shall be made directly to the Persons entitled
thereto and except payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments 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
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not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall 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, towards payment
of 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, towards payment of 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 setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving 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 Revolving 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 Revolving 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 paragraph 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 Revolving Loans to
any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph 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 setoff 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 the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder 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 the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the
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date of payment to 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 shall fail to make any payment required to be made
by it pursuant to Section 2.06(b), 2.18(d) or 9.03(c), then 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 2.19. Mitigation Obligations; Replacement of Lenders. (a)
----------------------------------------------
If any Lender requests compensation under Section 2.15, 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 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Revolving Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to 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 2.15, 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 2.17,
or if any Lender defaults in its obligation to fund Revolving 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 and delegate,
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 Revolving 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 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
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ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and the
--------------------
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 as proposed to be
conducted and, except where the failure to do so, individually or 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 Transactions to be
-----------------------------
entered into by each Loan Party are within such Loan Party's powers and have
been duly authorized by all necessary corporate and, if required, stockholder or
member action. This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of the Borrower or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or 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 Transactions
------------------------------------
(a) do not require any consent or approval of, registration or filing with, or
any other action by or before, any Governmental Authority, except such as have
been obtained or made and are in full force and effect; except filings necessary
to perfect Liens created under the Loan Documents and except as could not
individually or in the aggregate (after giving effect to the Transactions)
reasonably be expected to result in a Material Adverse Effect, (b) will not
violate any material law or regulation applicable to the Borrower or any of the
Subsidiaries or their properties or the terms of the charter, by-laws or other
organizational documents of the Borrower or any of the Subsidiaries or any order
of any Governmental Authority applicable to the Borrower or any of the
Subsidiaries or their properties, (c) will not violate or result in a material
default under any indenture, agreement or other instrument binding upon the
Borrower or any of the Subsidiaries or any of their assets, or give rise to a
right thereunder to require any payment in excess of $1,000,000 to be made by
the Borrower or any of the Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of the
Subsidiaries, except Liens created or permitted under the Loan Documents.
-24-
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
-----------------------------------------------
The Borrower has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders' equity and cash flows (i) as of
and for the fiscal year ended December 31, 1998, reported on by
PricewaterhouseCoopers LLP, independent public accountants, and (ii) as of and
for the nine month period ended September 30, 1999, certified by a Financial
Officer of the Borrower. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) above.
(b) Except as disclosed in the financial statements referred to above
or the notes thereto and except for the Disclosed Matters, after giving effect
to the Transactions, none of the Borrower or the Subsidiaries has, as of the
Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
(c) There has been no Company Material Adverse Effect since December
31, 1998.
SECTION 3.05. Properties. (a) Each of the Borrower and the
----------
Subsidiaries 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 of the Borrower and the Subsidiaries owns, or is licensed to
use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
------------------------------------
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of the Subsidiaries (i) that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of
the Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any
-25-
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or could reasonably be expected to result in, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
-----------------------------------
Borrower and the Subsidiaries 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 upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the
-------------------------------------
Borrower nor any of the Subsidiaries 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.
SECTION 3.09. Taxes. Each of the Borrower and the Subsidiaries has
-----
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
-----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders
----------
all agreements, instruments and corporate or other restrictions to which the
Borrower or any of the Subsidiaries is subject, and all other matters known to
any of them, 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
Loan Party 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
-26-
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 upon assumptions believed to be
reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of,
-------------
and the ownership interest of the Borrower in, each Subsidiary and identifies
each Subsidiary that is a Subsidiary Loan Party, in each case as of the
Effective Date.
SECTION 3.13. Insurance. As of the Effective Date, all premiums in
----------
respect of insurance maintained by or on behalf of the Borrower and the
Subsidiaries have been paid. The Borrower believes that the insurance
maintained by or on behalf of the Borrower and the Subsidiaries is adequate.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
--------------
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower or any Subsidiary, threatened that could
reasonably be expected to result in a Material Adverse Effect. The hours worked
by and payments made to employees of the Borrower and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters in a manner that
would reasonably be expected to result in a Material Adverse Effect. All
payments due from the Borrower or any Subsidiary, or for which any claim may be
made against the Borrower or any Subsidiary, 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 the Borrower or such Subsidiary, except to the extent
that the failure of such payments to be so made or accrued would not reasonably
be expected to result in a Material Adverse Effect. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound that could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.15. Solvency. Immediately after the consummation of the
---------
Transactions to occur on the Effective Date, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date. For purposes of the foregoing, the amount of
contingent liabilities of any Loan Party shall be the amount that, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
-27-
SECTION 3.16. Year 2000. Any reprogramming required to permit the
----------
proper functioning, in and following the year 2000, of (a) the computer systems
of the Borrower and the Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's and the Subsidiaries' systems interface) and the testing of all such
systems and equipment, as so reprogrammed, is complete. The cost to the
Borrower and the Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Borrower and the
Subsidiaries (including reprogramming errors and the failure of others' systems
or equipment) will not result in a Default or a Material Adverse Effect. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower and
the Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit the Borrower
to conduct the businesses without Material Adverse Effect.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to make
---------------
Revolving Loans hereunder shall not become effective until the 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 Fried, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Borrower, covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required Lenders shall reasonably
request, including the absence of conflicts with or defaults under the
Indenture and other material agreements, and otherwise in form and
substance reasonably satisfactory to the Administrative Agent. The
Borrower hereby requests such counsel to deliver such opinions.
(c) 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
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance
-28-
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an executive
officer or Financial Officer of the Borrower, together with all attachments
contemplated thereby.
(g) Since December 31, 1998, there shall not have been any material
adverse change in the business, assets, liabilities (including contingent
liabilities), operations, condition (financial or otherwise), prospects or
material agreements of the Borrower and the Subsidiaries, taken as a whole,
after giving effect to the Transactions and the other transactions
contemplated hereby.
(h) There shall be no action, actual or to the knowledge of any Loan
Party threatened, before any governmental body, court or arbitrator
(including any consent decree) that (a) has a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the ability of
the Loan Parties to consummate the Transactions, or the other transactions
contemplated hereby, or on the ability of the Loan Parties to give effect
to the Transactions or (b) if adversely determined could reasonably be
expected to have a Material Adverse Effect.
(i) After giving effect to the Transactions and the other
transactions contemplated hereby, the Borrower and the Subsidiaries shall
have outstanding no indebtedness or preferred stock or other preferred
equity interests other than (i) the Obligations and (ii) Indebtedness and
preferred equity interests permitted by the Indenture.
(j) The consummation of the Transactions and the other transactions
contemplated hereby shall not (a) violate any applicable law, statute,
consent decree, rule or regulation applicable to any Loan Party or its
properties or (b) conflict with, or result in a default or event of default
(or the creation of any lien or prepayment) under, any material agreement
of Borrower or the Subsidiaries.
-29-
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Revolving
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 5:00
p.m., New York City time, on March 31, 2000 (and, in the event such conditions
are not so satisfied or waived, the Revolving Commitments shall terminate at
such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
------------------
make a Revolving Loan on the occasion of any Revolving Borrowing is subject to
receipt of a Borrowing Request therefor in accordance herewith and to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents and in the Borrowing Request shall be true and
correct on and as of the date of such Revolving Borrowing.
(b) At the time of and immediately after giving effect to such
Revolving Borrowing, no Default shall have occurred and be continuing.
Each Revolving Borrowing shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Revolving Loan and all fees payable hereunder
shall have been paid in full, the Borrower covenants and agrees with the Lenders
that:
SECTION 5.01. Merger Agreement. The Borrower will not, and will
-----------------
cause each relevant Subsidiary to not, breach any of its obligations under the
Merger Agreement (without giving effect to any amendment or waiver thereto that
is adverse to the Lenders and not reasonably satisfactory to the Lenders) in a
manner involving an intentional misrepresentation, fraud, bad faith or wilful
misconduct.
SECTION 5.02. Notices of Material Events. (a) The Borrower will
---------------------------
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(i) the occurrence of any Default;
-30-
(ii) any amendment, waiver or other modification of, or any breach
of, the Merger Agreement;
(iii) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(iv) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(v) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.02(a) 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.
(b) The Borrower will furnish to the Administrative Agent and the
Lenders prompt written notice of any casualty or other insured damage to any
material portion of any Collateral or the commencement of any action or
proceeding for the taking of any material portion of any Collateral or any part
thereof or interest therein under power of eminent domain or by condemnation or
similar proceeding.
SECTION 5.03. Information. (a) The Borrower will furnish to the
------------
Administrative Agent prompt written notice of any change (i) in any Loan Party's
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral for the
benefit of the Secured Parties. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.
(b) Within 30 days of the end of each calendar month during the term
of this Agreement, the Borrower shall deliver to the Lenders (i) a consolidated
statement of cash flows for such calendar month and (ii) a projected statement
of cash flows for the
-31-
three calendar months immediately following such calendar month, in each case
certified by a Financial Officer of the Borrower.
SECTION 5.04. Use of Proceeds. (a) The proceeds of Revolving Loans
----------------
will be used by the Borrower for working capital purposes and to make Capital
Expenditures in such amounts that are materially consistent with the "January
'00 through March '01 Cash Flow - 8 Fiber Scenario" as referred to in Section
5.01(i) of the Merger Agreement.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.
SECTION 5.05. Additional Subsidiaries. The Borrower will not allow
------------------------
the aggregate total assets of Foreign Subsidiaries at any time to exceed
$5,000,000. If any additional Subsidiary is formed or acquired after the
Effective Date, the Borrower will, within five Business Days after such
Subsidiary is formed or acquired, notify the Administrative Agent and the
Lenders thereof and cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary (if it is a Subsidiary Loan Party) and
with respect to any Equity Interest in or Indebtedness of such Subsidiary owned
by or on behalf of any Loan Party.
SECTION 5.06. Further Assurances. (a) The Borrower will, and will
-------------------
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements and other
documents), that may be required under any applicable law, or that the
Administrative Agent or the Required Lenders may reasonably request, to cause
the Collateral and Guarantee Requirement to be and remain satisfied, all at the
expense of the Loan Parties. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
(b) If any material assets are acquired by the Borrower or any
Subsidiary Loan Party after the Effective Date (other than assets constituting
Collateral under the Security Agreement or Pledge Agreement that become subject
to the Lien of the Security Agreement or Pledge Agreement upon acquisition
thereof), the Borrower will notify the Administrative Agent and the Lenders
thereof, and, if requested by the Administrative Agent or the Required Lenders,
the Borrower will cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the Subsidiary Loan Parties to take, such
actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section, all at the expense of the Loan Parties.
ARTICLE VI
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Indenture Covenants
-------------------
SECTION 6.01. Indenture Covenants. Until the Revolving Commitments
--------------------
have expired or terminated and the principal of and interest on each Revolving
Loan and all fees payable hereunder have been paid in full, the Borrower
covenants and agrees with the Lenders that it will comply, and that it will
cause the Subsidiaries to comply, with each of the covenants and agreements set
forth in Articles 4 and 5 (other than Sections 4.08, 4.11 and 4.16) of the
Indenture, which Articles, together with the terms therein (including the
definitions thereof which appear in other provisions of the Indenture), are
hereby incorporated herein by reference as if set forth herein at length,
provided that, for purposes of this Section 6.01, all references (other than
--------
references to Securities in Section 4.03(b)(iii) of the Indenture) in such
Articles to the Indenture or the Securities issued thereunder shall be deemed to
be references to this Credit Agreement or the Revolving Loans made (and any
promissory notes issued) hereunder, all references to the Trustee shall be
deemed to be references to the Required Lenders and all references to an Event
of Default or Default shall be deemed to include an Event of Default or Default,
respectively, specified in Article VII hereof. The provisions of Articles 4 and
5 (other than Sections 4.08, 4.11 and 4.16) of the Indenture incorporated herein
by reference together with the terms therein (including the definitions thereof
which appear in other provisions of the Indenture), shall be the provisions of
the Indenture set forth in Exhibit G, and such provisions shall, for the
purposes of this Agreement, be deemed to continue in effect so long as this
Agreement is in effect and until all of the Revolving Loans, together with
interest and all other obligations hereunder shall have been paid in full,
irrespective of any termination, modification or amendment of, or consent or
waiver relating to, any of the provisions of the Indenture or the payment of the
Indebtedness issued pursuant thereto.
ARTICLE VII
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 Revolving Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Revolving Loan
or any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) (i) any representation or warranty (A) made or deemed made by or
on
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behalf of the Borrower or any Subsidiary 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, and (B)
qualified as to materiality shall prove to have been incorrect when made or
deemed made or (ii) any representation referred to in clause (i)(A) above
not qualified as to materiality shall prove to have been incorrect in any
material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02 or 5.04;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article) or in the Indenture,
and such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which notice
will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to 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 Material Indebtedness (or any portion of
the principal amount thereof) or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof (or any portion of
the principal amount thereof), or to require any offer to be made to
prepay, repurchase, redeem or defease any Material Indebtedness or any
portion of the principal amount thereof) prior to its scheduled maturity,
provided that this clause (g) shall not apply to secured Indebtedness that
--------
becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 90 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
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(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 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 assets of the Borrower or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under
the Loan Documents or (ii) as a result of the Administrative Agent's
failure to maintain possession of any stock certificates, promissory notes
or other instruments delivered to it under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), 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 Revolving Commitments, and thereupon the Revolving Commitments shall
terminate immediately, and (ii) declare the Revolving Loans then outstanding to
be due and payable in whole (or in part, in which case any
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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, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Revolving Commitments shall automatically terminate and the principal of the
Revolving Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders hereby 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. For purposes of this Article VIII and for
the purposes of Article IX, all references to the Administrative Agent are
deemed to include the Collateral Agent.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or any Affiliate
thereof as if it were not the Administrative Agent hereunder.
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 to exercise in writing 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 the failure to disclose,
any information relating to the Borrower or any of the Subsidiaries 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
-36-
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 IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, 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 upon 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.
The Administrative Agent may perform any of and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. 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 paragraphs 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
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, 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 that shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the 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
-37-
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 between 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 omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon 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 upon 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 upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
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:
(a) if to the Borrower, to it at Splitrock Services, Inc., ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (fax (▇▇▇) ▇▇▇-▇▇▇▇), Attention
of ▇▇▇▇▇▇▇ ▇. McGelligan, Jr., General Counsel, with a copy to: Fried,
Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇ (fax (▇▇▇) ▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
(b) if to the Administrative Agent, to Citicorp USA, Inc., ▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Global Loans
Servicing Center (fax (▇▇▇) ▇▇▇-▇▇▇▇), with a copy of each report,
financial statement, notice or other document required to be delivered by
the Borrower to Citicorp USA, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (fax (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
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Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
--------------------
Administrative Agent or any Lender 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 Administrative Agent and the Lenders hereunder and under the
other 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 Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (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 the Administrative Agent or any Lender may have
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 or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders, provided
--------
that no such agreement shall (i) increase the Revolving Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Revolving Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the maturity of any Revolving Loan, or any date for the payment
of any interest or fees payable hereunder, or postpone the scheduled date of
expiration of any Revolving Commitment, without the written consent of each
Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the percentage set forth in the definition of the term "Required Lenders" or
any other provision of any Loan Document specifying the number or percentage of
Lenders or Lenders of any Class required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender, (vi) release any Subsidiary Loan Party from
its Guarantee under the Guarantee Agreement, or limit its liability in respect
of such Guarantee, without the written
-39-
consent of each Lender, or (vii) release all or substantially all of the
Collateral from the Liens of the Security Documents, without the written consent
of each Lender (except as expressly provided in such Security Documents);
provided further that no such agreement shall amend, modify or otherwise affect
----------------
the rights or duties of the Administrative Agent without the prior written
consent of the Administrative Agent.
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 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 the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with due diligence, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Revolving Loans made hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Revolving Loans.
(b) The Borrower shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (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 reasonable 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 Transactions or any other transactions
contemplated hereby, (ii) any Revolving Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence, Release or threatened Release
of Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, 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, as to any Indemnitee, be available 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 the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (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
--------
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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 total Revolving Exposures and unused
Revolving Commitments at the time.
(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 Transactions or any Revolving Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later
than five days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon 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 (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) 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 its Revolving Commitment and the Revolving 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 Administrative Agent must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld), (ii)
except in the case of an assignment to a Lender or an Affiliate or Related Fund
of a Lender or an assignment of the entire remaining amount of the assigning
Lender's Revolving Commitment or Revolving Loans, the amount of the Revolving
Commitment or Revolving Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) 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, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and (v) the assignee, if it shall
-41-
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 paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, 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 and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 2.15, 2.17 and 9.03). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph 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 paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Revolving
Commitment of, and principal amount of the Revolving 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 Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance 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 paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance 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 paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
-----------
under this Agreement (including all or a portion of its Revolving Commitment and
the Revolving 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
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parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. 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 paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15 and 2.17 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (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 such Participant agrees to be subject to Section 2.18(c)
as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 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 2.17 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.17(e) 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.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
---------------
(an "SPV"), identified as such in writing from time to time by the Granting
---
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Revolving Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement,
provided that (i) nothing herein shall constitute a commitment by any SPV to
--------
make any Revolving Loan and (ii) if an SPV elects not to exercise such option or
otherwise fails to provide all or any part of such Revolving Loan, the Granting
Lender shall be obligated to make such Revolving Loan pursuant to the terms
hereof. The making of a Revolving Loan by an SPV hereunder shall utilize the
Revolving Commitment of the Granting Lender to the same extent, and as if, such
Revolving Loan were made by such Granting Lender. Each party hereto hereby
agrees that no SPV shall be liable for any indemnity or similar payment
obligation under
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this Agreement (all liability for which shall remain with the Granting Lender).
In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary in this Section 9.04, any SPV may (i)
with notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Revolving Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and the
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPV to support the funding or maintenance of Revolving Loans and
(ii) disclose on a confidential basis any non-public information relating to its
Revolving Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPV. As this
Section 9.04(h) applies to any particular SPV, this Section may not be amended
without the written consent of such SPV.
SECTION 9.05. Survival. All covenants, agreements,
--------
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document 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 Revolving
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender 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 Revolving
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 2.15, 2.17 and 9.03 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Revolving Loans, the
expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. 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. This Agreement,
the other Loan Documents, and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and
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when the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held
------------
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate 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 hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other 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 this Section
are in addition to other rights and remedies (including other rights of setoff)
which 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 hereby 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 hereby 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 or, to the extent permitted by law, in such
Federal court. Each of the parties 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
the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or their properties in the courts of any
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jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
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 paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement 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 HEREBY
---------------------
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.
SECTION 9.11. Headings. Article and Section headings and the
---------
Table of Contents used 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 of the Administrative Agent
----------------
and the Lenders 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
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any
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other Loan Document or the enforcement of rights 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 (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, the term "Information" means all information received
-----------
from the Borrower relating to the Borrower or its businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to 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.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
-------------------------
herein to the contrary, if at any time the interest rate applicable to any
Revolving Loan, together with all fees, charges and other amounts that are
treated as interest on such Revolving Loan under applicable law (collectively
the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") that
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may be contracted for, charged, taken, received or reserved by the Lender
holding such Revolving Loan in accordance with applicable law, the rate of
interest payable in respect of such Revolving Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Revolving Loan but were not payable as a result of the operation
of this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Revolving Loans or periods shall be increased (but
not above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
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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.
SPLITROCK SERVICES, INC.,
by
___________________________________
Name:
Title:
CITICORP USA, INC., individually and as
Administrative Agent,
by
___________________________________
Name:
Title:
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