EXHIBIT 10.1
THE SYMBOL '***' IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT THE
PORTION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
================================================================================
CREDIT AGREEMENT
DATED AS OF
OCTOBER 29, 1999
AMONG
▇▇.▇▇▇ CORP.,
THE LENDERS PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
AS ADMINISTRATIVE AGENT
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................1
Section 1.01. DEFINED TERMS..............................................1
Section 1.02. CLASSIFICATION OF LOANS AND BORROWINGS....................34
Section 1.03. TERMS GENERALLY...........................................34
Section 1.04. ACCOUNTING TERMS; GAAP....................................35
ARTICLE II THE LOANS AND LETTERS OF CREDIT.................................35
Section 2.01. COMMITMENTS...............................................35
Section 2.02. LOANS AND BORROWINGS; LETTER OF CREDIT SUBFACILITY........35
Section 2.03. REQUESTS FOR BORROWING....................................40
Section 2.04. FUNDING OF BORROWINGS.....................................41
Section 2.05. INTEREST ELECTIONS........................................43
Section 2.06. TERMINATION, REDUCTION AND INCREASE OF COMMITMENTS........45
Section 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT......................48
Section 2.08. AMORTIZATION OF LOANS; MANDATORY REDUCTIONS OF REVOLVING
COMMITMENT................................................49
Section 2.09 PREPAYMENT OF LOANS.......................................51
Section 2.11. INTEREST..................................................56
Section 2.12 ALTERNATE RATE OF INTEREST................................57
Section 2.13. INCREASED COSTS...........................................57
Section 2.14 BREAK FUNDING PAYMENTS....................................58
Section 2.15. TAXES.....................................................59
Section 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS..................................................60
Section 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS............62
Section 2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES........62
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................64
Section 3.01. ORGANIZATION; POWERS......................................64
Section 3.02. AUTHORIZATION; ENFORCEABILITY.............................64
Section 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS......................64
Section 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE...........64
Section 3.05. PROPERTIES; LIENS; LICENSES...............................65
Section 3.06. LITIGATION AND ENVIRONMENTAL MATTERS......................65
Section 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS.......................66
Section 3.08. INVESTMENT AND HOLDING COMPANY STATUS.....................66
Section 3.09. TAXES.....................................................66
i
Section 3.10. ERISA.....................................................66
Section 3.11. INTELLECTUAL PROPERTY.....................................67
Section 3.12. FEDERAL REGULATIONS.......................................67
Section 3.13. DISCLOSURE................................................67
Section 3.14. SUBSIDIARIES..............................................68
Section 3.15. INSURANCE.................................................68
Section 3.16. LABOR MATTERS.............................................68
Section 3.17. AT&T AGREEMENT............................................68
Section 3.18. SECURITY DOCUMENTS........................................68
Section 3.19. CAPITALIZATION............................................69
Section 3.20. FISCAL YEAR...............................................69
ARTICLE IV CONDITIONS......................................................69
Section 4.02. EACH BORROWING............................................72
ARTICLE V AFFIRMATIVE COVENANTS............................................74
Section 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION................74
Section 5.02. NOTICES OF MATERIAL EVENTS................................76
Section 5.03. INFORMATION REGARDING COLLATERAL..........................77
Section 5.04. EXISTENCE; CONDUCT OF BUSINESS............................77
Section 5.05. PAYMENT OF OBLIGATIONS....................................78
Section 5.06. MAINTENANCE OF PROPERTIES.................................78
Section 5.07. INSURANCE.................................................78
Section 5.08. BOOKS AND RECORDS; INSPECTION RIGHTS......................79
Section 5.09. COMPLIANCE WITH LAWS AND AGREEMENTS.......................79
Section 5.10. USE OF PROCEEDS...........................................79
Section 5.11. FURTHER ASSURANCES........................................80
Section 5.12. CASUALTY AND CONDEMNATION.................................80
Section 5.13. INTEREST RATE PROTECTION..................................81
Section 5.14. ADDITIONAL SUBSIDIARIES; ADDITIONAL SECURITY DOCUMENTS....81
Section 5.15. SPECIAL PURPOSE SUBSIDIARIES..............................82
Section 5.16. ACCOUNT CONTROL AGREEMENTS................................83
Section 5.17 WHOLLY-OWNED SUBSIDIARIES.................................83
Section 5.18 OPERATING AND DEPOSIT ACCOUNTS............................83
ARTICLE VI Negative Covenants..............................................83
Section 6.01. INDEBTEDNESS..............................................83
Section 6.02. LIENS.....................................................85
Section 6.03. FUNDAMENTAL CHANGES.......................................86
ii
Section 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; ASSET SALES.................................87
Section 6.05. HEDGING AGREEMENTS........................................89
Section 6.06. RESTRICTED PAYMENTS.......................................90
Section 6.07. TRANSACTIONS WITH AFFILIATES..............................90
Section 6.08. RESTRICTED AGREEMENTS.....................................90
Section 6.09. REPAYMENT OF INDEBTEDNESS.................................91
Section 6.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS.................91
Section 6.11. MATERIAL CONTRACTS........................................91
Section 6.12. SPECIAL PURPOSE SUBSIDIARIES..............................92
Section 6.13. MINIMUM ROUTE MILES AND SEGMENTS/LINKS....................92
Section 6.14. MINIMUM CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS....92
Section 6.15. MINIMUM CONSOLIDATED OPERATING REVENUES...................93
Section 6.16. CONSOLIDATED EBITDA.......................................93
Section 6.17. TOTAL LEVERAGE RATIO......................................94
Section 6.18. CONSOLIDATED LEVERAGE RATIO...............................94
Section 6.19. FIXED CHARGE COVERAGE RATIO...............................94
Section 6.20. CUMULATIVE CAPITAL EXPENDITURES...........................95
Section 6.21. USE OF COLLATERAL.........................................96
Section 6.22. CHANGES TO FISCAL YEAR....................................96
ARTICLE VII EVENTS OF DEFAULT..............................................97
Section 7.01. EVENTS OF DEFAULT.........................................97
ARTICLE VIII THE AGENTS...................................................100
ARTICLE IX MISCELLANEOUS..................................................103
Section 9.01. NOTICES..................................................103
Section 9.02. WAIVERS; AMENDMENTS......................................104
Section 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.......................105
Section 9.04. SUCCESSORS AND ASSIGNS...................................106
Section 9.05. SURVIVAL.................................................109
Section 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS.................109
Section 9.07. SEVERABILITY.............................................110
Section 9.08. RIGHT OF SETOFF..........................................110
Section 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS..................................................110
Section 9.10. WAIVER OF JURY TRIAL.....................................111
Section 9.11. HEADINGS.................................................111
Section 9.12. CONFIDENTIALITY..........................................111
Section 9.13. INTEREST RATE LIMITATION.................................112
iii
Section 9.14. NON-RECOURSE.............................................112
Section 9.15. CSCC LENDERS.............................................112
iv
SCHEDULES:
Schedule 2.01 - Commitment
Schedule 3.05 - Licenses
Schedule 3.06 - Disclosed Matters
Schedule 3.14 - Subsidiaries
Schedule 3.15 - Insurance
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.08 - Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Trust Agreement
Exhibit C Form of Note
Exhibit D Form of Borrowing Request
Exhibit E Form of Collateral Access Agreement
v
CREDIT AGREEMENT, dated as of October 29, 1999 (this "AGREEMENT"), among
▇▇.▇▇▇ Corp., a Delaware corporation (the "BORROWER"), the Lenders party hereto
and First Union National Bank, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS.
As used in this Agreement, the following terms have the meanings specified
below:
"ABR" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ADDITIONAL ASSETS" means any capital assets used or useful in the
business of the Borrower and its Subsidiaries purchased or acquired after the
Second Amendment Effective Date.
"ADDITIONAL GUARANTEES" has the meaning assigned to such term in the Trust
Agreement.
"ADDITIONAL SECURITY DOCUMENTS" has the meaning assigned to such term in
the Trust Agreement.
"ADJUSTED LIBO RATE" means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means First Union, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire in a
form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.
"AGENT" means a collective or individual reference, as the context
requires, to the Administrative Agent and each agent and trustee under the Loan
Documents.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day
plus one-half of one percent. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ANNUAL BUSINESS PLAN" means the annual update to the initial business
plan, including the build-out of the Network agreed to pursuant to Exhibit B of
the AT&T Agreement, as such agreement may be amended from time to time in
accordance with this Agreement (or, if the AT&T Agreement has been terminated
prior to its scheduled expiration as in effect on the Second Amendment Effective
Date, as approved by the Administrative Agent), including an annual operating
and cash flow budget in reasonable detail for the current fiscal year,
projections of Capital Expenditures, Network Expenses and other Permitted
Expenses, and the estimated timing of all Borrowings, in each case for the year
to which such Annual Business Plan applies, and updated financial projections
through the fiscal year during which the Maturity Date is scheduled to occur;
PROVIDED, such annual update shall be subject to the approval of the
Administrative Agent (such approval not to be unreasonably withheld) unless the
Borrower delivers to the Administrative Agent concurrently with the delivery of
such annual update a certificate of a Financial Officer stating that, after
giving effect to such annual update, (a) the Borrower is in pro forma compliance
with the financial covenants set forth in Sections 6.14 through 6.20 (to the
extent applicable) and (b) the Business Plan, as modified by all such annual
updates, remains projected in good faith to be fully financed.
"ANNUALIZED EBITDA" means, as of any date of determination, Consolidated
EBITDA for the period of two consecutive calendar quarters then most recently
ended, times two.
"APPLICABLE RATE" means, for any day, with respect to any Loan, the
applicable rate per annum set forth below under the caption "ABR Spread" or
"LIBOR Spread", as the case may be, during the following periods as of the most
recent determination date:
2
Period ABR Spread LIBOR Spread
--------------------------------- -------------- --------------
During the period 3.50% 4.75%
Consolidated EBITDA is less
than zero
During any period when the 3.25% 4.50%
Consolidated Leverage Ratio
is more than 10 to 1
During any period when the 3.00% 4.25%
Consolidated Leverage Ratio
is more than 6 to 1 but less
than or equal to 10 to 1
During any period when the 2.50% 3.75%
Consolidated Leverage Ratio
is more than 4 to 1 and less
than or equal to 6 to 1
During any period when the 2.25% 3.50%
Consolidated Leverage Ratio
is less than or equal to 4 to 1
For purposes of the foregoing table, (i) the Consolidated Leverage Ratio shall
be determined as of the end of each calendar quarter based upon the Borrower's
consolidated financial statements delivered pursuant to Section 5.01(a) or (b),
except that, prior to delivery of the first such financial statement after the
Effective Date, such determination shall be based upon the financial statements
referred to in Section 3.04 for the calendar quarter ended June 30, 1999, and
(ii) each change in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; PROVIDED that
if the Borrower fails to deliver the consolidated financial statements required
to be delivered by it pursuant to Section 5.01(a) or (b) within the period
specified therein for delivery thereof and, when such financial statements are
delivered, the Applicable Rate resulting from the Consolidated Leverage Ratio
based upon such financial statements is greater than the Applicable Rate in
effect immediately prior to the end of the period during which such financial
statements were required to be delivered, then (x) the Applicable Rate shall be
retroactively increased (for the period from the expiration of the period
specified in Section 5.01(a) or (b) for delivery of such consolidated financial
statements until the earlier of the date such consolidated financial statements
are delivered or the date of the expiration of the period specified therein for
delivery) and (y) if any payments of interest have been made with respect to
such period, the Borrower shall promptly make a supplemental payment of interest
to correct the underpayment.
3
"ASSET SALE" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transactions) in one transaction
or a series of related transactions by the Borrower or its Subsidiaries to any
Person other than the Borrower or any of its Subsidiaries of (i) all or any of
the capital stock of any Subsidiary, (ii) all or substantially all of the
property and assets of an operating unit or business of the Borrower or any of
the Subsidiaries or (iii) any other property or assets of the Borrower or any of
the Subsidiaries other than in the ordinary course of business of the Borrower
or such Subsidiary; PROVIDED that sales or other dispositions of equipment that
has become worn out, obsolete or damaged, or otherwise unsuitable for use in
connection with the business of the Borrower or the Subsidiaries, shall not be
included within the meaning of "Asset Sale".
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of the Borrower and
Administrative Agent if 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.
"AT&T AGREEMENT" means that certain Fiber Optic System Agreement, dated
October 29, 1999, between the Borrower and AT&T Corp., as amended through May
24, 2001 and as further amended from time to time in accordance with this
Agreement.
"AVAILABILITY PERIOD" means, in respect of the Tranche A-1 Loans, the
Tranche A-1 Availability Period, in respect of the Tranche A-2 Loans, the
Tranche A-2 Availability Period, in respect of the Tranche A-3 Loans, the
Tranche A-3 Availability Period, in respect of the Revolving Loans, the
Revolving Availability Period, and, in respect of the Letters of Credit, the
Letter of Credit Availability Period.
"BLOCKAGE NOTICE" has the meaning set forth in the definition of "Blockage
Period."
"BLOCKAGE PERIOD" means any period (i) commencing on a date on which the
Administrative Agent delivers a notice (a "BLOCKAGE NOTICE") to the Borrower to
the effect that an Event of Default under Section 7.01(d) has occurred and is
continuing by reason of a breach of any provision of Sections 6.14 through 6.20,
and (ii) ending on the earliest of: (A) the 179th day after delivery of the
Blockage Notice with respect to such Blockage Period, (B) the cure or waiver of
the breach that was the basis for such Blockage Notice (so long as no other
Event of Default under Section 7.01(d) has occurred and is continuing by reason
of a breach of any provision of Sections 6.14 through 6.20), and (C) the payment
in full of the Loans and the termination of the Commitments under this
Agreement; PROVIDED that no more than one Blockage Notice may be given during
any 365-day period and no such breach that existed on the date of delivery of a
Blockage Notice may be made the basis for another Blockage Period unless such
breach has been cured for at least 90 days.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.
"BORROWER" means ▇▇.▇▇▇ Corp., a Delaware corporation and a wholly-owned
subsidiary of the Parent.
4
"BORROWING" means a Loan or group of Loans of the same Class and Type,
made, converted or continued on the same date and, in the case of LIBOR Loans,
as to which a single Interest Period is in effect.
"BORROWING REQUEST" means (a) with respect to a Tranche A-1 Borrowing, a
Tranche A-2 Borrowing or a Revolving Loan Borrowing, a request by the Borrower
in accordance with Section 2.03 and in the form of Exhibit D and (b) with
respect to a Tranche A-3 Borrowing either (i) a request for a Tranche A-3
Borrowing in the form of Exhibit D or (ii) in the case of a Deemed Borrowing, a
notice from CSCC to the Administrative Agent of a Borrowing of ABR Loans in
accordance with the terms of Section 2.04.
"BRIDGE FACILITY" means, at any time, the extensions of credit
contemplated by the Bridge Loan Agreement.
"BRIDGE LOAN AGREEMENT" means that certain Bridge Loan Agreement, dated as
of October 29, 1999, among Warburg Dillon Read LLC, Credit Suisse First Boston,
as Agents and the Parent that was subsequently terminated on May 10, 2000.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which commercial banks in
New York City are authorized or required by law to
remain closed; PROVIDED that, when used in connection with a LIBOR Loan, the
term "BUSINESS DAY" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"BUSINESS PLAN" means the business plan setting forth the management case
of the Borrower and the Subsidiaries delivered to the Administrative Agent and
the Lenders immediately prior to May 24, 2001, which includes a capital budget,
a construction budget for the Network Expenses, and a schedule of each estimated
Borrowing, in each case consistent with the rest of the Business Plan.
"CAPITAL EXPENDITURES" means, for any period, the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
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;
PROVIDED that no capitalized interest shall be included in the definition of
"Capital Expenditures."
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required 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) the acquisition of beneficial ownership,
directly or indirectly, by any Person or group (within the meaning of the
Securities Exchange Act), other
5
than the Parent Stockholders, of shares representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Parent; (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of the Parent by persons who were
neither (A) recommended by the board of directors of the Parent to be elected by
the stockholders of the Parent nor (B) appointed by directors so nominated; (c)
the acquisition of ownership, directly or indirectly, beneficially or of record,
by any Person other than the Parent of any ownership or equity interest in the
Borrower; or (d) the failure by the Parent to have the ability (without the
consent of any other Person) to elect at least a majority of the directors of
the Borrower.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the Effective Date, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the Effective Date or (c) compliance by any Lender (or, for purposes of Section
2.13(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
Effective Date.
"CHARGES" has the meaning set forth in Section 9.13.
"CISCO FINANCED PRODUCTS" means the Cisco Products the acquisition of
which is financed by CSCC Lenders through Tranche A-3 Loans pursuant to the
terms of this Agreement.
"CISCO PRODUCTS" means networking and telecommunications equipment
(including installation and delivery) and other goods, spare parts, accessories,
software and services which Cisco Systems manufactures, assembles, sells,
licenses or provides.
"CISCO PURCHASE COMMITMENT" means the Purchase Commitment set forth in
Exhibit T to the Cisco Supply Agreement as in effect on the Second Amendment
Effective Date.
"CISCO SUBSCRIPTION AGREEMENT" means that certain Series B Senior
Cumulative Convertible Preferred Stock Purchase Agreement, dated as of April 12,
2001, between the Parent and Cisco Systems.
"CISCO SUPPLY AGREEMENT" means that certain Service Provider Agreement,
dated as of April 6, 2001, between Cisco Systems and ▇▇.▇▇▇ Corp.
"CISCO SYSTEMS" means Cisco Systems, Inc. or any subsidiary or Affiliate
thereof.
"CISCO VENDOR" means Cisco Systems or any distributor or other reseller or
provider of Cisco Products reasonably acceptable to Cisco Systems.
"CLASS" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Tranche A-1 Loans,
Tranche A-2 Loans, Tranche A-3 Loans or Revolving Loans.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
6
"COLLATERAL" has the meaning assigned to such term in the Trust Agreement.
"COLLATERAL TRUSTEE" means a collective reference to the Corporate Trustee
and the Individual Trustee under the Trust Agreement.
"COMMITMENT" means, with respect to each Lender, the commitment, if any,
of such Lender to make Loans and issue or participate in Letters of Credit
hereunder during any Availability Period, expressed as an amount representing
the maximum principal amount of the Loans to be made and Letters of Credit to be
issued or participated in by such Lender hereunder, as such commitment may be
(a) reduced or increased from time to time pursuant to Section 2.06 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, in the amendment or Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment or in the
joinder agreement or other document pursuant to which such Lender shall have
agreed to provide all or a portion of any increase in the Commitment pursuant to
Section 2.06(f), as applicable. The aggregate amount of the Lenders'
Commitments, as of the Second Amendment Effective Date, is $647,394,032.04.
"COMMITMENT FEE" has the meaning set forth in Section 2.10(a).
"CONSOLIDATED DEBT SERVICE" means, for any period, without duplication,
Consolidated Interest Expense for such period (excluding amortization of
deferred financing costs and fees and other non-cash interest charges), PLUS any
scheduled mandatory cash Repayments of Indebtedness of the Borrower and its
Subsidiaries made during such period, PLUS all dividends paid by the Borrower to
the Parent during such period (excluding any amount exceeding the amount of the
Permitted Interest Liabilities paid by the Parent during such period), PLUS all
Commitment Fees paid by any Loan Party during such period and other commitment
fees in respect of any Consolidated Indebtedness.
"CONSOLIDATED EBITDA" means, for any period: (i) Consolidated Net Income
for such period (adjusted to exclude all extraordinary items and Non-Recurring
Items), PLUS (ii) without duplication and to the extent deducted from revenues
in determining Consolidated Net Income for such period, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts
attributable to depreciation and amortization for such period, (d) non-cash
compensation expenses, (e) the aggregate amount of (1) all fees and expenses
paid by the Borrower under and in respect of the closing and syndication of the
Existing
Credit Agreement, the closing of the First Amendment or the Second
Amendment or under this Agreement and in connection with the Fee Letter and the
Tranche A-3 Fee Letter and (2) expenses in respect of Permitted Transaction Fees
(but, solely for purposes of this definition, only to the extent incurred in
connection with the consummation of the transactions contemplated by the Bridge
Loan Agreement, the Subscription Agreement, the Cisco Subscription Agreement and
the issuance of the Senior Notes), and (f) on or prior to September 30, 2001,
the amount expensed in connection with cash bonuses to and/or the forgiveness of
loans in favor of the chief executive officer and other key employees of the
Borrower related to initial compensation payment which shall not exceed
$10,000,000 in the
7
aggregate, in each case as determined for such period on a consolidated basis
with respect to the Borrower and the Subsidiaries in accordance with GAAP.
"CONSOLIDATED GROSS REVENUES" means, for any period, consolidated gross
revenues of the Borrower and its Subsidiaries attributable to sales of its
services determined for such period on a consolidated basis with respect to the
Borrower and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" means, as of any date of determination, the
aggregate principal amount of Indebtedness of the Borrower and its Subsidiaries
outstanding as of such date determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of (a) the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations, but excluding any such
interest expense of any Person for any period that the income (or loss) of such
Person is excluded from the calculation of Consolidated Net Income by reason of
clause (b) of the definition of "Consolidated Net Income"), accrued by the
Borrower and the Subsidiaries during such period, PLUS (b) preferred stock
dividends in respect of Disqualified Stock of the Borrower and its Subsidiaries
for such period, in each case determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Consolidated Indebtedness as of such date to (b) Annualized EBITDA.
"CONSOLIDATED NET INCOME" means, for any period, net income or loss of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, excluding (a) the income of any Person in which any
other Person (other than the Borrower or any of its Subsidiaries or any director
holding qualifying shares in compliance with applicable law) has a joint
interest, except to the extent of the amount of dividends or other distributions
(including distributions made as a return of capital or Repayment of principal
or advances) actually paid to the Borrower or any of its Subsidiaries, by such
Person, and (b) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or the date such Person's assets are
acquired by the Borrower or any Subsidiary of Borrower.
"CONSOLIDATED OPERATING REVENUES" means, for any period, Consolidated
Gross Revenues for such period excluding, to the extent included in the
determination thereof, without duplication (i) all revenues of the Borrower and
its Subsidiaries attributable to the sale of capital assets and (ii) all
revenues of the Borrower and its Subsidiaries attributable to Dark Fiber/Conduit
Dispositions and Fiber Swaps, in each case, determined on a consolidated basis
in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
8
"CONVERSION DATE" means the earlier to occur of (i) September 30, 2003,
and (ii) the first Quarterly Date as of which the Consolidated EBITDA for each
of two consecutive calendar quarters then most recently ended has been positive;
provided that in no case shall the Conversion Date be any earlier than October
31, 2002.
"CSCC" means Cisco Systems Capital Corporation, a Nevada corporation.
"CSCC BORROWING PROCEDURES LETTER" means that certain letter agreement,
dated as of May 24, 2001, by and between CSCC and the Borrower, relating to the
procedures for the making of Tranche A-3 Loans at any time that a CSCC Lender
holds any Tranche A-3 Commitment, as amended or waived from time to time by the
parties thereto.
"CSCC LENDER" means any Lender that is CSCC or an Affiliate of CSCC.
"CUMULATIVE CAPITAL EXPENDITURES" means all Capital Expenditures of the
Borrower and its Subsidiaries since January 1, 2001.
"CUMULATIVE DARK FIBER/CONDUIT GROSS PROCEEDS" means, as of any date of
determination, the aggregate amount of gross cash proceeds received by the
Borrower and the Subsidiaries in respect of Dark Fiber/Conduit Dispositions.
"CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS" means, as of any date of
determination, the aggregate amount of (i) Dark Fiber/Conduit Revenue/Proceeds
for all Dark Fiber/Conduit Dispositions and Fiber Swaps consummated on or prior
to such date and (ii) cash equity proceeds received by the Borrower or the
Subsidiaries after the Second Amendment Effective Date (excluding cash equity
proceeds received from Cisco Systems on or prior to the Second Amendment
Effective Date pursuant to the Cisco Subscription Agreement in an amount up to
$200,000,000), to the extent such proceeds are used in the construction,
operation and development of the Network or to make a prepayment pursuant to
Section 2.09(e). For purposes of this definition, "Dark Fiber/Conduit
Revenue/Proceeds" means, as of any date of determination thereof, for any Dark
Fiber/Conduit Disposition or Fiber Swap (a "disposition"), the greater of (i)
the revenues of the Borrower and its Subsidiaries attributable to such
disposition for the period from the date of such disposition to the date of
determination, determined on a consolidated basis in accordance with GAAP, and
(ii) the amount of cash proceeds received by the Borrower and its Subsidiaries
in respect of such disposition during such period.
"DARK FIBER/CONDUIT DISPOSITION" means a lease, sale, conveyance or other
disposition (other than a Fiber Swap) by the Borrower or any Subsidiary of
unused or "dark" fiber optic strands or unused conduit, or the use thereof, for
a period of at least ten (10) years, in a transaction in which none of Borrower
or the Subsidiaries has any obligation to "light" such fiber optic strands
except dispositions required by the AT&T Agreement as in effect on May 24, 2001,
or as amended with the consent of the Administrative Agent if such consent is
required pursuant to Section 6.11.
9
"DEDICATED CONDUIT" means that portion of the conduit that has been
dedicated to lit fiber services conducted by ▇▇.▇▇▇ Services.
"DEEMED BORROWING" has the meaning set forth in Section 2.04.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 3.06.
"DISQUALIFIED STOCK" means, with respect to any Person, any capital stock
of such Person which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or other Disqualified Stock, (iii) requires the payment of
dividends other than dividends payable solely in additional shares of capital
stock of such Person (other than Disqualified Stock) or (iv) is redeemable or
subject to required repurchase at the option of the holder thereof, in whole or
in part; PROVIDED that "Disqualified Stock" shall not include either the Series
A Convertible Preferred Stock or Series B Convertible Preferred Stock of the
Parent solely by the virtue of such class of capital stock (i) being redeemable
upon the occurrence of any event that constitutes a change of control, subject
to the Repayment of the Obligations prior to payment of any such redemption
obligation, or (ii) being redeemable on a date not earlier than two years after
the Maturity Date.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EFFECTIVE DATE" means October 29, 1999.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has a
combined capital and surplus of not less than $500 million (or its equivalent in
foreign currency) whose debt is rated "A" or better by S&P or "A2" or better by
▇▇▇▇▇'▇ at the time as of which any investment or rollover therein is made.
"ELIGIBLE PERSON" means (a) a commercial bank, an insurance company or
other similar financial institution, (b) any other entity which is (or which is
managed by a manager which manages funds which are) primarily engaged in making,
purchasing or otherwise investing in commercial loans or extending, or investing
in extensions of, credit for its own account in the ordinary course of business,
(c) a Person that is primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary, (d)
any Approved Fund, (e) any other Person which is an "accredited investor" (as
defined in Regulation D under the Securities Exchange Act of 1934, as amended)
which extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds and lease financing companies, or (f) any Person that
supplies or makes available to the Borrower or any of its Subsidiaries any
property or services used or useful for any Qualifying Business, or any
Affiliate of any such
10
Person, and that provides a portion of any increase in the Commitments pursuant
to Section 2.06(f); PROVIDED, HOWEVER, that, except if the Borrower so elects,
in no event may any Person be an "Eligible Person" if such Person is engaged in
a business that competes with a Qualifying Business or if it is Controlled by a
Person that is engaged in a business that competes with a Qualifying Business.
As used herein, "Approved Fund" means (i) with respect to any Lender which is a
fund primarily engaged in making, purchasing or otherwise investing in
commercial loans, any other fund which is primarily engaged in making,
purchasing or otherwise investing in commercial loans or extending, or investing
in extensions of, credit for its own account in the ordinary course of its
business and which is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor or (ii) any other Person
which has been approved by the Administrative Agent (such approval not to be
unreasonably withheld or delayed) and which is (or which is managed by a manager
which manages funds which are) primarily engaged in making, purchasing or
otherwise investing in commercial loans or extending, or investing in extensions
of, credit for its own account in the ordinary course of its business.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, 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
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Loan Party directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) 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 any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, 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 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
11
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 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 Article VII.
"EXCESS CASH FLOW" means, for any fiscal year of the Borrower, the sum
(without duplication) of the following (PROVIDED that "Excess Cash Flow" shall
be zero for any fiscal year for which the sum of the following would otherwise
be less than zero):
(a) Consolidated Net Income for such fiscal year, adjusted to exclude any
gain or loss or net income or loss attributable to Prepayment Events, Dark
Fiber/Conduit Dispositions and Fiber Swaps; PLUS
(b) depreciation, amortization and other non-cash charges or losses
deducted in determining such Consolidated Net Income for such fiscal year
(including any interest expense accrued for such fiscal year that is not payable
currently in cash to the extent deducted in determining Consolidated Net
Income); PLUS
(c) the sum of (i) the amount, if any, by which Net Working Capital
decreased during such fiscal year, plus (ii) the amount, if any, by which the
consolidated deferred revenues of the Borrower and its Subsidiaries increased
during such fiscal year; MINUS
(d) the sum of (i) any non-cash gains included in determining such
Consolidated Net Income for such fiscal year plus (ii) the amount, if any, by
which Net Working Capital increased during such fiscal year plus (iii) the
amount, if any, by which the consolidated deferred revenues of the Borrower and
the Subsidiaries decreased during such fiscal year; MINUS
(e) Capital Expenditures for such fiscal year except to the extent
attributable to the incurrence of Capital Lease Obligations and other
Indebtedness of the Borrower and its Subsidiaries other than the Loans; MINUS
(f) the aggregate principal amount of Indebtedness repaid or prepaid by
the Borrower and its Subsidiaries during such fiscal year, excluding (i) Loans
prepaid pursuant to clauses (b) and (c) of Section 2.09, and (ii) Repayments or
prepayments of Indebtedness financed by incurring other Indebtedness, to the
extent that mandatory principal payments in respect of such other Indebtedness
would not be excluded from this clause (f) when made, in each case calculated
for such fiscal year; MINUS
12
(g) the aggregate amount in such fiscal year of dividends and
distributions paid by the Borrower to the Parent in order to permit the Parent
to pay Permitted Parent Liabilities.
"EXCLUDED EQUITY CONTRIBUTION" means (a) cash proceeds from the issuance
and sale of equity interests to management (including pursuant to the exercise
of options) and (b) other cash equity contributions to the Borrower not to
exceed *********** in the aggregate.
"EXCLUDED REAL ESTATE RIGHTS" means any Real Estate Rights acquired,
constructed or improved with proceeds of Indebtedness permitted pursuant to
Sections 6.01(iv)(C) or (D).
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
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 in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.17(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.15(a).
"EXISTING AGREEMENTS" means (i) the Amended and Restated Fiber Network
Development Agreement, dated October 29, 1999, between Sea Breeze Communication
Company and the Borrower, (ii) the note of the Parent payable to ▇▇▇▇ Telecom in
the principal amount of $10,000,000, (iii) the Master Secondment Agreement,
dated October 29, 1999, between the Borrower and ▇▇▇▇ Telecom and (iv) Master
Secondment Agreement dated as of October 29, 1999 by and between PF Telecom
Holdings LLC and Borrower, in each case as amended through May 24, 2001.
"EXISTING
CREDIT AGREEMENT" means that certain
Credit Agreement, dated as
of October 29, 1999, among the Borrower, the lenders party thereto and Lucent,
as administrative agent and syndication agent.
"EXISTING LENDER CLASS" has the meaning set forth in Section 2.09(g).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of
New York, or, if such rate is not so
published 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
13
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means that certain letter agreement, dated as of May 24,
2001, by and between First Union and the Borrower, relating to certain
syndication requirements and the payment of certain fees by the Borrower.
"FIBER SWAP" means any exchange or lease of fiber optic strands or conduit
in exchange for the ownership or use of other fiber optic strands or conduit.
"FINANCIAL OFFICER" means, with respect to any Person, the chief executive
officer, the chief financial officer, principal accounting officer, treasurer or
controller of such Person.
"FIRST AMENDMENT" means that certain First Amendment to Loan Documents
dated as of March 31, 2000 among the Borrower, the Guarantors, the Lenders party
thereto, the Collateral Trustee and the Administrative Agent.
"FIRST UNION" shall mean First Union National Bank, a national banking
association, together with its successors.
"FIXED CHARGE COVERAGE RATIO" means, for the twelve month period ending as
of any date of determination thereof, the ratio of (a) Consolidated EBITDA MINUS
Maintenance Capital Expenditures MINUS (without duplication) cash taxes paid by
the Borrower to a Governmental Authority or pursuant to the Tax Sharing
Agreement to (b) Consolidated Debt Service; provided, however, that until the
calculation date ending on the last day of the second quarter after the
Conversion Date the calculation of the Fixed Charge Coverage Ratio shall be made
by multiplying by two the result for each such component of the calculation for
the two consecutive quarters most recently ended as of the date of
determination.
"FIXTURE" shall mean a fixture as defined in ss. 9-313(1)(a) of the
Uniform Commercial Code as in effect in the State of
New York; for purposes
hereof, "Fixture" shall specifically include conduit and specifically exclude
fiber.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"GAAP" means, subject to Section 1.04, generally accepted accounting
principles in the United States of America.
"GOVERNMENT ACTS" has the meaning set forth in Section 2.18.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
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.
14
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to 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 guarantee issued to support such Indebtedness or
obligation; PROVIDED that the term "guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"GUARANTEES" has the meaning assigned to such term in the Trust Agreement.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection
and obligations as principal or for reimbursement of the surety in respect of
payment bonds, performance bonds, bid bonds and other surety bonds issued by or
for the account of the Borrower or any Subsidiary in the ordinary course of
business) guaranteeing or intended to guarantee any Indebtedness or other
obligation of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount of the Indebtedness in respect of which such
Guaranty Obligation is made.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
15
"HIGH YIELD DEBT" means the Senior Notes and any and all other fixed rate
Indebtedness of the Parent in respect of debt Securities issued in an
underwritten public offering or private placement pursuant to Rule 144A of the
Securities Act, which Indebtedness (i) is not secured by any Lien on the assets
of any Loan Party, (ii) does not mature (except upon acceleration upon events of
default, subject to clause (v) below, under the High Yield Indenture), nor is
any scheduled Repayment thereof due, prior to the date that is one year after
the later of the Maturity Date and any other maturity date established in
respect of Loans hereunder at the time such debt Securities are issued, (iii) is
not subject to any mandatory redemption or required repurchase, conversion or
exchange (whether upon the occurrence of any contingency or otherwise), but
excluding contingent redemption offer provisions in the event of a "change of
control" or "asset sale" that are customary for similar debt Securities, (iv) is
not guaranteed by any other Loan Party, (v) is issued on such other terms,
including covenants, events of default and similar provisions relating thereto,
that are customary at the times of offering and issuance for debt Securities
issued by companies of comparable credit quality with, and in the same market
as, the Parent, and otherwise no less favorable to the Parent than the Bridge
Facility, and (vi) as to which the Administrative Agent has received all drafts
of the High Yield Indenture and other related documents and agreements provided
to the Parent and has been consulted by the Parent with respect to the terms and
conditions of such documents and agreements prior to the execution and delivery
thereof.
"HIGH YIELD INDENTURE" means, at any time, the Senior Note Indenture and
any other indenture then outstanding executed with respect to an issuance of
Indebtedness meeting the definition of High Yield Debt (which indenture has not
been amended, modified, supplemented or waived except in compliance with clause
(vi) of the definition of "High Yield Debt," or in any other manner that would
cause it not to comply with the definition of "High Yield Debt").
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar debt securities, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business that are
not overdue by more than 60 days unless and to the extent that any such amount
may be the subject of a bona fide dispute), (f) 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, but only to the extent of the lesser of the amount of such
Indebtedness and the fair market value of such property, (g) all Guaranty
Obligations of such Person, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances, (k) all Disqualified Stock of
such Person, and (l) all obligations of such Person under Hedging Agreements;
provided, however, obligations of such Person evidenced by payment, performance,
bid or surety bonds incurred in the ordinary course of business shall not
constitute Indebtedness. 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
16
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. The amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP. For purposes of this Agreement, the Cisco Purchase
Commitment shall not constitute Indebtedness.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INDEMNITY AND CONTRIBUTION AGREEMENT" means that certain Indemnity,
Subrogation and Contribution Agreement, dated as of the Effective Date, among
the Loan Parties and the Collateral Trustee.
"INFORMATION" has the meaning set forth in Section 9.12.
"INITIAL GUARANTEE" has the meaning assigned to such term in the Trust
Agreement.
"INITIAL SECURITY DOCUMENTS" has the meaning assigned to such term in the
Trust Agreement.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 3.11.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.05.
"INTEREST FUND" means a fund, escrow or reserve established for the
purpose of providing a source of funds to pay interest in respect of
Indebtedness of the Parent.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December and (b) with respect to any
LIBOR Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a LIBOR Borrowing with an Interest
Period of more than three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; PROVIDED that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
17
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"ISSUING LENDER" shall mean First Union.
"ISSUING LENDER FEES" shall have the meaning set forth in Section 2.10(e).
"▇▇▇▇ TELECOM" means ▇▇▇▇ Telecom Ventures, Inc., a Delaware corporation.
"LENDERS" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance
or upon any increase in the Commitments pursuant to Section 2.06(f), other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.
"LETTER OF CREDIT AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of (A) the Maturity Date, and
(B) any earlier date of termination of the LOC Commitments in accordance with
this Agreement.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.10(d).
"LETTERS OF CREDIT" shall mean any letter of credit issued by the Issuing
Lender for the account of the Borrower pursuant to the terms hereof, as such
Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.
"LIBO RATE" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate appearing on Telerate Page 3750 (or on any successor page) as
the London interbank offered rate for deposits in dollars at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO RATE"
with respect to such LIBOR Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent (or, if the Administrative Agent at the time is not a commercial bank, any
commercial bank based in
New York City selected by the Administrative Agent for
the purpose of quoting such rate, PROVIDED that such commercial bank has a
combined capital and surplus and undivided profits of not less than
$500,000,000) in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIBOR" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
"LICENSES" has the meaning set forth in Section 3.05(b).
18
"LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" means this Agreement, the Fee Letter, the Guarantees, the
Security Documents, the LOC Documents, the Tranche A-3 Fee Letter, the First
Amendment, the Second Amendment, the Side Letter and the Indemnity and
Contribution Agreement.
"LOAN PARTIES" means the Parent, the Borrower and the Subsidiaries.
"LOANS" means the loans made or deemed made to the Borrower pursuant to
this Agreement.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in SCHEDULE 2.01, as such amount may be
reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.01, as such percentage
may be modified in connection with any assignment made in accordance with the
provisions of Section 9.04.
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.02(b) and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.01.
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (a) the rights and obligations of
the parties concerned or (b) any collateral security for such obligations. To
the extent of any conflict between the provisions of this Agreement and any LOC
Documents, this Agreement shall be controlling.
"LOC OBLIGATIONS" shall mean, at any time, the sum (without duplication)
of (a) the maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such Letters of
Credit PLUS (b) the aggregate amount of all drawings under Letters of Credit
honored by the Issuing Lender but not theretofore reimbursed.
"LUCENT" means Lucent Technologies Inc.
19
"MAINTENANCE CAPITAL EXPENDITURES" means, for any period, Capital
Expenditures made during such period to maintain the Network.
"MANDATORY BORROWING" shall have the meaning set forth in Section
2.02(b)(v).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Parent and the Subsidiaries taken as a whole, (b) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (c) the
ability of any Loan Party to perform any of its obligations under any Loan
Document, (d) the legality, validity, binding effect or enforceability of this
Agreement or any other Loan Document, or (e) the rights of or benefits available
to the Lenders under any Loan Document.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Loan Parties in an aggregate principal amount exceeding $6,000,000. For
purposes of determining "Material Indebtedness," the "principal amount" of the
obligations of a Loan Party in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that such Loan Party would be required to pay if such Hedging Agreement were
terminated at such time.
"MATURITY DATE" means December 31, 2006.
"MAXIMUM RATE" has the meaning set forth in Section 9.13.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any Prepayment Event, (a) the cash
proceeds 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, 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
its Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale or other disposition of an asset
(including pursuant to a casualty or condemnation), the amount of all payments
required to be made by the Borrower and its Subsidiaries as a result of such
event to repay Indebtedness (other than 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 its Subsidiaries (either directly or to the Parent pursuant to the
Tax Sharing Agreement), and the amount of any reserves established by the
Borrower and its Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case that are directly attributable to such
event (as determined reasonably and in good faith by the chief financial officer
of the Borrower).
20
"NET WORKING CAPITAL" means, at any date (a) the consolidated current
assets of the Borrower and its Subsidiaries as of such date (excluding, without
duplication, cash and Permitted Investments and any current assets attributable
to Dark Fiber/Conduit Dispositions and Fiber Swaps), minus (b) the consolidated
current liabilities of the Borrower and its Subsidiaries as of such date
(excluding, without duplication, current liabilities in respect of Indebtedness
and any current liabilities attributable to Dark Fiber/Conduit Dispositions and
Fiber Swaps), determined on a consolidated basis in accordance with GAAP. Net
Working Capital at any date may be a positive or negative number. Net Working
Capital increases when it becomes more positive or less negative and decreases
when it becomes less positive or more negative.
"NETWORK" means the approximately 18,400-mile fiber optic network to be
developed, constructed and operated by the Borrower pursuant to the Business
Plan in jurisdictions along project routes identified in the Annual Business
Plan, as such network is expanded through the addition of optic fiber strands or
conduit acquired through Fiber Swaps or with the proceeds of Dark Fiber/Conduit
Dispositions or other dispositions of assets permitted under Section 6.04(b) or
through the issuance of capital stock or other equity Securities by the Parent,
that are used to expand the mileage of such initially-built system; PROVIDED,
any material expansion of such network shall be subject to the approval of the
Administrative Agent (such approval not to be unreasonably withheld) unless the
Borrower delivers to the Administrative Agent, a certificate of a Financial
Officer stating that, after giving effect to such expansion, (a) the Borrower
will be in pro forma compliance with the financial covenants set forth in
Sections 6.14 through 6.20 and (b) the Business Plan, as modified by all Annual
Business Plans, remains projected in good faith to be fully financed.
"NETWORK EXPENSES" means Capital Expenditures (excluding Capital
Expenditures financed by the incurrence of Capital Lease Obligations or of
purchase money indebtedness) for equipment and other property and related
services to be used by the Borrower for the construction and development of the
Network and the deployment of equipment and systems necessary for operating the
Network.
"NEW LENDER CLASS" has the meaning set forth in Section 2.09(g).
"NON-RECURRING ITEMS" means, with respect to any Person for any period,
(a) all non-recurring items that do not involve any payment of cash by a Person
or any of its subsidiaries during such period or any future period and (b)
non-recurring items set forth on such Person's consolidated statement of
operations for such period below the operating income line in respect of (i)
gains or losses on sales or dispositions of assets outside the ordinary course
of business, (ii) discontinued operations, (iii) the effects of changes in
accounting principles or methods, (iv) write-downs on any investments of such
Person or of any subsidiary of such Person (other than such Person or any of its
subsidiaries), and (v) any restructuring charges, including the amount of any
such restructuring charge to cover cash payouts to laid-off employees of such
Person or any of its subsidiaries. "Non-Recurring Items" shall include without
duplication, and only to the extent included in determining Consolidated Net
Income, all gain, net income or loss attributable to Dark Fiber/Conduit
Dispositions and Fiber Swaps.
21
"OBLIGATIONS" means, at any time, all obligations of payment and
performance of the Borrower, the Parent and the Subsidiaries under the Loan
Documents.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar 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.
"PARENT" means
Velocita Corp., a Delaware corporation.
"PARENT DEBT INSTRUMENT" means, at any time, (i) any High Yield Indenture
which shall then evidence outstanding Indebtedness of the Parent, and (ii) any
other agreement or instrument evidencing Indebtedness of the Parent (other than
an indenture in respect of high yield Indebtedness of the Parent that does not
comply with the definition of "High Yield Indenture").
"PARENT STOCKHOLDERS" means: Cisco Systems; ▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇; Treg
Ventures LLC; ▇▇▇▇ Telecom; PF Telecom Holdings, LLC; GLW Ventures LLC;
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Odyssey Coinvestors, LLC; Odyssey Investment Partners Fund, LP;
First Union Investors, Inc. and UBS Capital II LLC; and each "Permitted
Transferee" of each such Person, as such term is defined under the Stockholders
Agreement as in effect on the Second Amendment Effective Date.
"PARTICIPANT" has the meaning set forth in Section 9.04(e).
"PARTICIPATION INTEREST" means the purchase by a Lender of a participation
interest in Letters of Credit as provided in Section 2.02(b).
"PAYMENT DATE" means each Quarterly Date after the Effective Date ending
on and including the Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means, with respect to the Borrower, a
certificate in the form of Exhibit A to the Security Agreement and, with respect
to any Subsidiary, a similar certificate in the form approved under the
applicable Security Document delivered by such Subsidiary or any other form
approved by the Collateral Trustee.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes, assessments, governmental charges or
similar claims that are not yet due or are being contested in compliance with
Section 5.05;
(b) statutory or common law Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other similar Liens, arising in
the ordinary
22
course of business and securing obligations that are not yet delinquent or are
being contested in compliance with Section 5.05;
(c) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security laws or regulations;
(d) Liens incurred or deposits made to secure the performance of tenders,
bids, leases, statutory or regulatory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature, in each case in the ordinary course of business,
and a bank's unexercised right of set-off with respect to deposits made in the
ordinary course;
(e) judgment liens in respect of judgments that do not constitute an Event
of Default under clause (k) of Section 7.01;
(f) easements, municipal and zoning ordinances, rights-of-way and similar
encumbrances on or defects or other irregularities of title to real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations (other than customary maintenance required by
Governmental Authorities) and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(g) interests of lessees under leases or subleases granted by the Parent,
the Borrower or a Subsidiary as lessor that do not materially interfere with the
ordinary course of business of the Borrower and the Subsidiaries, taken as a
whole;
(h) any interest or title of a lessor in any property subject to any lease
otherwise permitted by the Loan Documents;
(i) any interest or title of a licensor in any property subject to any
license otherwise permitted by the Loan Documents;
(j) Liens in favor of a Securities Intermediary pursuant to such
Securities Intermediary's customary customer account agreement; PROVIDED that
any such Liens shall at no time secure any Indebtedness or obligations other
than customary fees and charges payable to such Securities Intermediary; and
(k) Liens (on terms approved by the Administrative Agent) in favor of a
purchaser of unused or "dark" fiber or unused conduit in a Dark Fiber/Conduit
Disposition or Fiber Swap attaching only to the property subject to such Dark
Fiber/Conduit Disposition or Fiber Swap for which the purchase price in such
Dark Fiber/Conduit Disposition or Fiber Swap has been paid in full by such
purchaser;
PROVIDED that the term "PERMITTED ENCUMBRANCES" shall not include any Lien
securing Indebtedness.
23
"PERMITTED EXPENSES" means, for any fiscal year, (i) Network Expenses,
(ii) operating expenses of the Borrower or otherwise related to the Network, and
other working capital expenses, (iii) payments of interest on Indebtedness of
the Borrower, (iv) dividends to the Parent to the extent permitted pursuant to
Section 6.06(iii), (iv) or (v), and (v) fees due hereunder and under the Fee
Letter and the Tranche A-3 Fee Letter, in each case paid or incurred, or to be
paid or incurred, in accordance with the Annual Business Plan applicable to such
fiscal year.
"PERMITTED INTEREST FUND" means one or more Interest Funds in an aggregate
amount not greater than the amount which, together with any investment earnings
thereon, would be sufficient to allow the Parent to pay interest in respect of
up to six semi-annual interest payments on Permitted Parent Debt.
"PERMITTED INTEREST LIABILITIES" means interest payable in respect of
Permitted Parent Debt in accordance with the terms of the Parent Debt
Instrument; PROVIDED, HOWEVER, that in the event an Interest Fund is established
in connection with the issuance and sale of Securities evidencing Indebtedness
of the Parent, Permitted Interest Liabilities shall not include any interest
payable in respect of Permitted Parent Debt during any period in which the
Parent's obligations to pay such interest are to be discharged pursuant to the
terms of the Permitted Debt Instrument by distributions from such Interest Fund;
and PROVIDED, FURTHER, in the case of any Indebtedness under any High Yield
Indenture, such interest shall be determined on the basis of the annual rate of
interest specified therein determined in accordance with such High Yield
Indenture, and if such interest exceeds 16% per annum (determined on the basis
of the amount on which such interest accrues in accordance with the terms of
such High Yield Indenture), the excess of such interest over 16% per annum
(determined on the basis of such amount) shall be paid by the issuance of
additional Indebtedness under the High Yield Indenture in an aggregate principal
amount equal to such excess.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing not more than 365
days after the date of acquisition thereof;
(b) commercial paper of a domestic issuer rated "A-1" or better by S&P or
"P-1" or better by Moody's maturing not more than 365 days after the date of
acquisition thereof;
(c) certificates of deposit, banker's acceptances and time deposits
maturing not more than 365 days after the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, an Eligible Institution;
(d) master note or deposit arrangements with Securities of the types
described in paragraphs (a), (b) and (c) above;
24
(e) money market preferred stock of a corporation organized under the laws
of a jurisdiction within the United States of America rated "AA" or better by
S&P or "Aa" or better by Moody's; PROVIDED, HOWEVER, that any such debt security
that is rated by both such rating agencies shall be rated "AA" or better by S&P
or Moody's;
(f) fully collateralized repurchase agreements with a term of not more
than 30 days for Securities described in clause (a) above and entered into with
an Eligible Institution; and
(g) any fund investing exclusively in investments of the types described
in clauses (a) through (f) above.
"PERMITTED PARENT DEBT" means any Indebtedness of the Parent outstanding
under any Parent Debt Instrument in an aggregate principal amount equal to the
difference (but not less than zero) of (a) the net proceeds of the incurrence of
such Indebtedness (i) applied to the payment of Permitted Transaction Fees
incurred in connection with such incurrence, (ii) applied to the Repayment of
other Permitted Parent Debt, and any interest accrued thereon to the date of
Repayment, (iii) contributed to a Permitted Interest Fund, or (iv) contributed
to the Borrower as equity capital, MINUS (b) the aggregate amount of all
Repayments of such Indebtedness made after such incurrence.
"PERMITTED PARENT EXPENSES" means all operating and administrative
expenses of the Parent (other than any expenses in respect of taxes that are
allocated between the Parent and the Borrower and its Subsidiaries pursuant to
the Tax Sharing Agreement), in each case, to the extent fairly allocable to the
business of the Borrower and, at such times as the Parent has other
subsidiaries, in an amount no greater than Borrower's pro rata share thereof.
"PERMITTED PARENT LIABILITIES" means, for any period, the sum of (i)
Permitted Transaction Fees, (ii) Permitted Interest Liabilities, (iii) Permitted
Parent Expenses and (iv) an aggregate amount (together with any amounts invested
by the Borrower and its Subsidiaries pursuant to Section 6.04(a)(iv)(B)(III))
not greater than $3,000,000 during each fiscal year of the Borrower (it being
agreed that amounts not used in any fiscal year may be carried forward to the
next succeeding fiscal year only) PLUS net cash proceeds received since the
Effective Date from the issuance of equity interests of the Parent to directors,
officers and employees (net of loans to directors, officers and employees
pursuant to Section 6.04(a)(iv)(B)(III)(y) that are outstanding or that have
been forgiven), payable to purchase or otherwise acquire or retire capital stock
of the Parent or options or warrants for the issuance of capital stock of the
Parent issued to directors, officers or employees.
"PERMITTED PREFERRED STOCK" means capital stock of the Borrower (other
than Disqualified Stock of the Borrower) of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of the Borrower, over shares of capital stock of any other class of
the Borrower.
"PERMITTED TRANSACTION FEES" means (without duplication) (i) all fees and
expenses paid by the Parent under the Bridge Loan Agreement, in connection with
that certain fee letter, dated
25
as of October 1, 1999, between the Parent and the Bridge Facility lenders, or
otherwise in connection with the Bridge Facility, (ii) all fees and expenses
paid by the Parent under the Subscription Agreement or otherwise in connection
with the Subscription Agreement, (iii) fees of $2,500,000 paid to Odyssey
Coinvestors, LLC, and Odyssey Investment Partners Fund, LP, under that certain
fee letter, dated October 29, 1999, from such Persons to the Parent, (iv)
customary underwriting fees, sales commissions and other transaction fees and
expenses incurred by the Parent in connection with any issuance of High Yield
Debt (it being acknowledged that fees and commissions payable under that certain
Engagement Letter, dated as of October 29, 1999, between the Parent, Warburg
Dillon Read, LLC and Credit Suisse First Boston Corporation, are customary) and
(v) all fees and expenses payable by the Parent under the Cisco Subscription
Agreement or otherwise in connection with the Cisco Subscription Agreement.
"PERMITTED UCC JURISDICTION" means any jurisdiction within the United
States which the Borrower or a Subsidiary identifies in a certificate delivered
(i) in connection with the execution and delivery of any Security Document
pursuant to Section 4.01 or Section 5.14(a) or (ii) otherwise in a certificate
delivered to the Administrative Agent and the Collateral Trustee, in any such
case, as a jurisdiction in which the Borrower or such Subsidiary maintains or
anticipates maintaining Collateral at any time the Loans are to be outstanding
or as a jurisdiction in which the Borrower or such Subsidiary maintains or
anticipates maintaining Collateral at any time the Loans are to be outstanding;
PROVIDED, that all filings have been made under the Uniform Commercial Code that
are required in order for the Collateral Trustee to continue at all times to
have a valid, legal and perfected security interest in all Collateral located in
such jurisdiction in which a security interest may be granted and perfected by
the filing of a financing statement under the Uniform Commercial Code.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"▇▇.▇▇▇ PROPERTY" has the meaning set forth in Section 5.15.
"▇▇.▇▇▇ SERVICES" has the meaning set forth in Section 5.15.
"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 Parent or 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.
"PREPAYMENT EVENT" means:
(a) any Asset Sale other than (i) dispositions permitted by Section
6.04(b), and (ii) any Dark Fiber/Conduit Disposition or Fiber Swap;
(b) any receipt by the Borrower or any Subsidiary of cash proceeds in
respect of any Dark Fiber/Conduit Disposition at any time after Cumulative Dark
Fiber/Conduit Gross Proceeds exceed ************;
26
(c) any Fiber Swap resulting in cash proceeds or other consideration;
(d) 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 after the Effective Date;
PROVIDED that (i) such events (other than any such event referred to in
clause (b) above) shall not constitute "Prepayment Events" to the extent that
the aggregate Net Proceeds from all such events are less than $250,000 during
any fiscal year of the Borrower, and (ii) any such event referred to in clauses
(a) or (c) above shall not constitute a "Prepayment Event" if the Borrower
elects (by notice to the Administrative Agent within five Business Days after
receipt of the Net Proceeds of such event) (A) to the extent such Net Proceeds
are from Asset Sales of Cisco Financed Product, to reinvest such Net Proceeds in
other Cisco Products as promptly as practicable, but in any event within 180
days, after the receipt of the Net Proceeds of such event and (B) to the extent
such Net Proceeds are from Asset Sales other than as described in the preceding
subclause (A), to reinvest the Net Proceeds of such event in Additional Assets
as promptly as practicable, but in any event within 180 days, after the receipt
of the Net Proceeds of such event and (iii) any such event referred to in clause
(d) above shall not constitute a "Prepayment Event" if the Borrower elects (by
notice to the Administrative Agent within five Business Days after receipt of
the Net Proceeds of such event) to apply the Net Proceeds of such event to
repair, restore or replace the affected property or asset, or to reinvest such
Net Proceeds in Additional Assets as promptly as practicable, but in any event
within 180 days, after the receipt of the Net Proceeds of such event; PROVIDED,
FURTHER, that if, at the expiration of the 180-day period referred to in clauses
(ii) and (iii) less than all the Net Proceeds of such event have been reinvested
or applied as provided therein, then a "Prepayment Event" shall be deemed to
have occurred at the expiration of such 180-day period with Net Proceeds equal
to the Net Proceeds that have not been so reinvested or applied. Notwithstanding
the foregoing, any Asset Sale or similar event that would not otherwise
constitute a Prepayment Event hereunder but, under the terms of any indenture or
other agreement governing any Material Indebtedness, would require any
prepayment or redemption of, or offer to prepay or redeem, any such Indebtedness
to the extent that the Net Proceeds therefrom are not reinvested within a
specified period of time, shall constitute a Prepayment Event to the extent that
the Net Proceeds therefrom are not reinvested in accordance with clauses (ii)
and (iii) above.
"PRIME RATE" shall mean, at any time, the rate of interest per annum
publicly announced from time to time by First Union at its principal office in
Charlotte, North Carolina as its prime rate. Each change in the Prime Rate shall
be effective as of the opening of business on the day such change in the Prime
Rate occurs. The parties hereto acknowledge that the rate announced publicly by
First Union as its Prime Rate is an index or base rate and shall not necessarily
be its lowest or best rate charged to its customers or other banks.
"PURCHASE MONEY DEBT" means Indebtedness of the Borrower or any Subsidiary
permitted under Section 6.01(iv), and any Indebtedness of the Borrower or any
Subsidiary permitted under Section 6.01(v) the proceeds of which are used to
refinance such Indebtedness.
27
"PURCHASE MONEY DEBT LIMIT" means ***********.
"PURCHASE MONEY LIEN" means any Lien permitted under clause (iv) of
Section 6.02 securing Indebtedness permitted under clause (iv) of Section 6.01
and any related obligations for fees, expense reimbursements, indemnities or the
like to the holders of such Indebtedness.
"PURCHASE PRICE" means any amounts paid or payable for Vendor Product to
be used in connection with the Network pursuant to invoices or purchase
receipts.
"QUALIFYING BUSINESS" means the business of owning, constructing,
developing and operating the Network, and all other activities incidental,
related or ancillary to, or necessary for, such business.
"QUARTERLY DATE" means the last day of each of March, June, September and
December.
"REAL ESTATE RIGHTS" has the meaning set forth in Section 5.15.
"REDUCTION DATE" means each Quarterly Date beginning with the Quarterly
Date ended March 31, 2003 and ending on and including the Maturity Date.
"REGISTER" has the meaning set forth in Section 9.04(c).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REPAYMENT" means, in respect of any Indebtedness, the direct or indirect
repayment, prepayment, redemption, purchase, acquisition, defeasance, retirement
or other satisfaction of the principal of such Indebtedness, in whole or in
part, whether optional or mandatory. "REPAY" has a meaning correlative thereto.
"REQUIRED LENDERS" shall mean Lenders, including the Administrative Agent,
holding in the aggregate more than 50% of (a) all Revolving Loans and LOC
Obligations then outstanding at such time PLUS (b) the aggregate unused
Revolving Commitments at such time (treating for purposes hereof, in the case of
the Issuing Lender, the portion of the LOC Obligations of the Issuing Lender
which is not subject to the Participation Interests of the other Lenders as
direct Obligations of the Issuing Lender and, in the case of the Lenders other
than the Issuing Lender, the Participation Interests of such Lenders in LOC
Obligations hereunder as direct Obligations of such Lenders) PLUS (c) all
Tranche A-1 Loans and Tranche A-2 Loans then outstanding at such time PLUS (d)
during the Tranche A-1 Availability Period, the aggregate unused Tranche A-1
Commitments at such time PLUS (e) during the Tranche A-2 Availability Period,
the aggregate unused Tranche A-2 Commitments at such time, PLUS (f) any and all
increases in the Loans and the Commitments (including the addition of any new
tranche of term loans) pursuant to Section 2.06(f).
28
"RESTRICTED PAYMENT" means (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Borrower or any of its Subsidiaries, and (b) any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any shares of any class of capital
stock of the Borrower or any of its Subsidiaries or any option, warrant or other
right to acquire any such shares of capital stock of the Borrower or any
Subsidiaries and (c) any payment by the Borrower and its Subsidiaries to the
Parent pursuant to the Tax Sharing Agreement or otherwise in respect of tax
liabilities of the Parent.
"REVOLVING AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of (A) the Maturity Date, and (B)
any earlier date of termination of the Revolving Commitments in accordance with
this Agreement.
"REVOLVING COMMITMENT" means the Commitment with respect to Revolving
Loans in an aggregate amount from all Lenders not to exceed $150,000,000.
"REVOLVING LOANS" means Loans made or deemed made pursuant to this
Agreement with respect to the Revolving Commitment.
"ROW LICENSE" means a collective reference to (i) all licenses granted by
AT&T Corp. to the Borrower or any Subsidiary for the use of AT&T Corp.
rights-of-way, easements and other Real Estate Rights owned or leased by AT&T
Corp., and (ii) each other license granted to the Borrower or any Subsidiary
with respect to rights-of-way, easements or other Real Estate Rights.
"ROW/LICENSE RIGHTS" has the meaning set forth in Section 5.15.
"S&P" means Standard & Poor's Ratings Services, a Division of the
▇▇▇▇▇▇-▇▇▇▇ Companies.
"SECOND AMENDMENT" means that certain Second Amendment to Loan Documents
dated as of May 24, 2001 among the Borrower, the Guarantors, the Lenders party
thereto and the Administrative Agent.
"SECOND AMENDMENT EFFECTIVE DATE" means May 24, 2001.
"SECURITIES" has the meaning assigned thereto in the Securities Act.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities Account
Control Agreement between the Borrower, the Securities Intermediary and the
Collateral Trustee, substantially in the form of Exhibit E to the Security
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended and the
rules of the Securities and Exchange Commission thereunder as in effect from
time to time.
29
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules of the Securities and Exchange Commission thereunder as
in effect from time to time.
"SECURITIES INTERMEDIARY" means any Person that is a party to the
Securities Account Control Agreement as the "Securities Intermediary"
thereunder.
"SECURITY AGREEMENT" means the Security Agreement between the Borrower and
the Collateral Trustee, substantially in the form of Exhibit E to the Trust
Agreement.
"SECURITY DOCUMENTS" means the Trust Agreement, the Initial Security
Documents, the Additional Security Documents and the Securities Account Control
Agreement.
"SEGMENT" means (i) with respect to any inter-city portion of the Network,
the through-portion of such Network between two local networks, and (ii) with
respect to a local portion of the Network, the entire through-portion of such
local network, excluding the spurs which branch off the through-portion.
"SENIOR NOTE INDENTURE" means the indenture dated as of May 10, ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust Company of
New York.
"SENIOR NOTES" means the 13.75% Senior Notes due 2010 issued pursuant to
the Senior Note Indenture.
"SERVICES SUBSIDIARY" has the meaning set forth in Section 5.15(b).
"SIDE LETTER" means that certain Side Letter, dated as of the Second
Amendment Effective Date, between the Borrower and the Administrative Agent.
"SPECIAL PURPOSE SUBSIDIARY" means a collective or individual reference,
as the context requires, to ▇▇.▇▇▇ Property, ▇▇.▇▇▇ Services or any Services
Subsidiary.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which any Lender subject to regulation by the Board
is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "EUROCURRENCY LIABILITIES" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
30
"STOCKHOLDERS AGREEMENT" means that certain Amended and Restated
Stockholders Agreement, dated as of May 24, 2001, among the Parent and each of
the Parent Stockholders parties thereto on the Second Amendment Effective Date.
"SUBSCRIPTION AGREEMENT" means that certain Subscription Agreement, dated
as of October 29, 1999, between the Parent and Odyssey Investment Partners Fund,
LP, Odyssey Coinvestors, LLC and UBS Capital II LLC, as amended through May 24,
2001.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any date,
any corporation, limited liability company, partnership, association or other
entity 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 by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.
"SUCCESSOR VENDOR" has the meaning set forth in Section 9.15.
"SUBSIDIARY" means any direct or indirect subsidiary of the Borrower.
"SUPPLY AGREEMENT" means the Master Supply, Services and Systems Agreement
dated as of August 6, 1999, between Lucent and ▇▇.▇▇▇ Supply Corp. (as assignee
of ▇▇.▇▇▇, LLC, a Delaware limited liability company, n/k/a ▇▇.▇▇▇ Corp.), as
amended through May 24, 2001 and as further amended from time to time.
"TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement, dated as
of October 29, 1999, between the Borrower and each Subsidiary and the Parent.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TOTAL CASH CAPITALIZATION" means, as of any date of determination, the
sum of (a) Consolidated Indebtedness as of such date, PLUS (b) the amount of
paid in capital of the Borrower as of December 31, 2000, as reflected in its
audited annual financial statements for the fiscal year ending on such date,
PLUS (c) the aggregate amount of all cash equity proceeds or contributions
received by the Borrower from and after December 31, 2000, PLUS (without
duplication) (d) cumulative Dark Fiber/Conduit Revenue/Proceeds, PLUS (e)
cumulative payments made and, so long as no Default under Section 7.01(p) has
occurred and is continuing on the date of determination, payments committed to
be made (whether or not earned), as estimated in the AT&T Agreement, by AT&T
under the AT&T Agreement, PLUS (f) cumulative payments made and, so long as
Touch America is not in arrears for 45 days or more in payments due (other than
those payments being disputed in good faith) under the Touch America Agreement
in an aggregate amount of $5,000,000 or more on the date of determination,
payments committed to be made (whether or not earned), as estimated in the Touch
America Agreement, by Touch America under the Touch America Agreement.
31
"TOTAL LEVERAGE RATIO" means, as of any date of determination thereof, the
ratio of Consolidated Indebtedness as of such date to Total Cash Capitalization
as of such date.
"TOUCH AMERICA" means Touch America, Inc., a Montana corporation.
"TOUCH AMERICA AGREEMENT" means that certain Reciprocal IRU Lease and
Exchange Option Agreement, dated February 25, 2000, between ▇▇.▇▇▇ Construction
Corp. and Touch America, as amended through May 24, 2001.
"TRANCHE A" means a collective reference to Tranches ▇-▇, ▇-▇ and A-3.
"TRANCHE A COMMITMENTS" means a collective reference to the Tranche A-1
Commitment, the Tranche A-2 Commitment and the Tranche A-3 Commitment.
"TRANCHE A LOANS" means a collective reference to the Tranche A-1 Loans,
the Tranche A-2 Loans and the Tranche A-3 Loans.
"TRANCHE A-1 AVAILABILITY" has the meaning set forth in Section 4.02(c).
"TRANCHE A-1 AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of (A) the Tranche A-1 Availability
Termination Date, and (B) any earlier date of termination of the Tranche A-1
Commitments in accordance with this Agreement.
"TRANCHE A-1 AVAILABILITY TERMINATION DATE" means the earlier of (i) the
date thirty months after the Effective Date and (ii) the date the Tranche A-1
Commitments are fully drawn.
"TRANCHE A-1 COMMITMENT" means the Commitment with respect to Tranche A-1
Loans in an aggregate amount from all Lenders not to exceed $160,000,000.
"TRANCHE A-1 LOANS" means Loans made or deemed made under this Agreement
pursuant to the Tranche A-1 Commitment.
"TRANCHE A-2 AVAILABILITY" has the meaning set forth in Section 4.02(d).
"TRANCHE A-2 AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of (A) the Tranche A-2 Availability
Termination Date, and (B) any earlier date of termination of the Tranche A-2
Commitments in accordance with this Agreement.
"TRANCHE A-2 AVAILABILITY TERMINATION DATE" means the earlier of (i) the
date that is thirty months after the Effective Date, and (ii) the date the
Tranche A-2 Commitments are fully drawn.
"TRANCHE A-2 COMMITMENT" means the Commitment with respect to Tranche A-2
Loans in an aggregate amount from all Lenders not to exceed $40,000,000.
32
"TRANCHE A-2 LOANS" means Loans made or deemed made under this Agreement
pursuant to the Tranche A-2 Commitment.
"TRANCHE A-3 ACCOUNT" means that certain account of the Borrower held with
the Administrative Agent with respect to which Cisco Systems has complete
dominion and control pursuant to that certain letter agreement dated as of the
Second Amendment Effective Date among the Borrower, Cisco Systems and the
Administrative Agent.
"TRANCHE A-3 AVAILABILITY" has the meaning set forth in Section 4.02(e).
"TRANCHE A-3 AVAILABILITY PERIOD" means the period from and including the
Second Amendment Effective Date to but excluding the earlier of (A) the Tranche
A-3 Availability Termination Date, and (B) any earlier date of termination of
the Tranche A-3 Commitments in accordance with this Agreement.
"TRANCHE A-3 AVAILABILITY TERMINATION DATE" means the earlier of (i) the
date that is twenty-four months after the Second Amendment Effective Date, and
(ii) the date the Tranche A-3 Commitments are fully drawn.
"TRANCHE A-3 COMMITMENT" means the Commitment with respect to Tranche A-3
Loans in an aggregate amount equal to $297,394,032.04.
"TRANCHE A-3 COMMITMENT FEE" has the meaning set forth in Section 2.10(b).
"TRANCHE A-3 EXPOSURE" has the meaning set forth in Section 9.15.
"TRANCHE A-3 FEE LETTER" means that certain letter agreement, dated as of
May 24, 2001, by and between CSCC and the Borrower, relating to the payment of
certain fees by the Borrower to CSCC.
"TRANCHE A-3 LENDERS" means the Lenders holding Tranche A-3 Commitments.
"TRANCHE A-3 LOANS" means Loans made or deemed made under this Agreement
pursuant to the Tranche A-3 Commitment.
"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 Loans
and the use of the proceeds thereof.
"TRUST AGREEMENT" means the Trust Agreement substantially in the form of
Exhibit B.
"TYPE" when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
33
"UNDRAWN COMMITMENT" has the meaning set forth in Section 2.10(a).
"UNDRAWN TRANCHE A-3 COMMITMENT" has the meaning set forth in Section
2.10(b).
"VENDOR PRODUCT" means any products or services (including delivery and
installation) (including, without limitation, Cisco Products) to be used in
connection with the Network that are purchased by the Borrower or any Subsidiary
from vendors, including Lucent and any Cisco Vendor.
"VENDOR SUPPLY AGREEMENT" means any agreement (including, without
limitation, the Lucent Supply Agreement and Cisco Supply Agreement) pursuant to
which Vendor Product is sold to the Borrower or a Subsidiary (other than a
Special Purpose Subsidiary).
"WHOLLY-OWNED SUBSIDIARY" shall mean, as to the Borrower or any of the
Subsidiaries, (i) any corporation 100% of whose capital stock (other than
director's qualifying shares and/or other nominal amounts of shares required to
be held other than by such Person under applicable law) is at the time owned by
such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii)
any partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person owns 100% of the
equity interests outstanding at such time.
"▇▇▇▇▇▇▇ ▇▇▇▇ ENTITY" means ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, or any
spouse, child or grandchild of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, or any
partnership (general or limited), corporation, association, joint stock company,
trust, family trust, venture, unincorporated organization or other entity of any
type or nature, that directly, through one or more intermediaries, is controlled
by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, or any spouse, child, or grandchild of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇.
"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. CLASSIFICATION OF LOANS AND BORROWINGS.
For purposes of this Agreement, Loans may be classified and referred to by
Class (e.g., a "Tranche A Loan") or by Type (e.g., a "LIBOR Loan") or by Class
and Type (e.g., a "Tranche A LIBOR Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Tranche A Borrowing") or by Type (e.g., a "LIBOR
Borrowing") or by Class and Type (e.g., a "Tranche A LIBOR Borrowing").
SECTION 1.03. 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
34
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) and to all exhibits,
schedules, annexes, attachments and appendices to such agreement, instrument or
document, (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
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, contract
rights, licenses and intellectual property.
SECTION 1.04. 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 it is requesting an amendment to any provision hereof to eliminate
the effect of any change occurring after the Second Amendment Effective Date 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 LOANS AND LETTERS OF CREDIT
SECTION 2.01. COMMITMENTS.
Subject to the terms and conditions set forth herein, each Lender agrees
to make Loans and to issue or participate in Letters of Credit to the Borrower
at any time and from time to time during each applicable Availability Period for
such Class of Loans in an aggregate principal amount not exceeding the amount of
its Commitment for each Class of Loans. Amounts repaid in respect of Tranche A
Loans may not be reborrowed. Revolving Loans and LOC Obligations that are repaid
may be reborrowed during the Revolving Availability Period.
SECTION 2.02. LOANS AND BORROWINGS; LETTER OF CREDIT SUBFACILITY.
(a) LOANS.
35
(i) Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in accordance
with their respective Commitments. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; PROVIDED that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure
to make Loans as required.
(ii) Subject to Section 2.12, each Borrowing shall be comprised
entirely of LIBOR Loans or ABR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any LIBOR Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; PROVIDED that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement.
(iii) At the commencement of each Interest Period for any LIBOR
Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $5,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than
$1,000,000, PROVIDED that an ABR Borrowing may be in an aggregate amount
that is equal to the entire remaining Commitments. Notwithstanding the
foregoing, Borrowings funded or held by a CSCC Lender shall not be subject
to the foregoing limitations. Borrowings of more than one Type and Class
may be outstanding at the same time; PROVIDED that there shall not be more
than fifteen LIBOR Borrowings with respect to all of the Tranche A-1
Loans, Tranche A-2 Loans, Tranche A-3 Loans and Revolving Loans,
collectively, outstanding at the same time.
(iv) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing as a LIBOR Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date for the
Loans included in such Borrowing.
(v) Notwithstanding any other provision of this Agreement, it is
hereby acknowledged and agreed that the entire Tranche A-3 Commitment held
by ▇▇▇▇ Telecom has been fully funded by ▇▇▇▇ Telecom on the Second
Amendment Effective Date, and ▇▇▇▇ Telecom shall not be (A) required to
make any other Loans hereunder and (B) entitled to receive (and the
Borrower shall not be required to pay) a Tranche A-3 Commitment Fee for
the portion of the Tranche A-3 Commitment held by ▇▇▇▇ Telecom.
(b) LETTERS OF CREDIT.
(i) ISSUANCE. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and the submission of a Letter of Credit
application in customary form, during the Letter of Credit Availability
Period the Issuing Lender shall issue, and the Lenders shall participate
in, Letters of Credit for the account of the Borrower from time to time
upon request in a form reasonably acceptable to the Issuing Lender;
36
PROVIDED, HOWEVER, that (A) the aggregate amount of LOC Obligations shall
not at any time exceed FIFTY MILLION DOLLARS ($50,000,000) (the "LOC
COMMITTED AMOUNT"), (B) the sum of the aggregate amount of Revolving Loans
PLUS LOC Obligations shall not at any time exceed the aggregate Revolving
Commitment then in effect, (C) all Letters of Credit shall be denominated
in dollars and (D) Letters of Credit shall be issued for lawful corporate
purposes and may be issued as trade letters of credit. No Letter of Credit
shall have an original expiry date more than twelve (12) months from the
date of issuance; PROVIDED, HOWEVER, so long as no Default has occurred
and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on the
request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date
of extension; PROVIDED, FURTHER, that no Letter of Credit, as originally
issued or as extended, shall have an expiry date extending beyond the
Maturity Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall be
a Business Day. First Union shall be the Issuing Lender on all Letters of
Credit. Any Letter of Credit issued hereunder shall be in a minimum
original face amount of $100,000 or such other amount as may be agreed to
by the Issuing Lender and the Borrower.
(ii) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three (3)
Business Days prior to the requested date of issuance. The Issuing Lender
will promptly upon request provide to the Administrative Agent for
dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of any prior report, and
including therein, among other things, the account party, the beneficiary,
the face amount, expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of
Credit. The Issuing Lender will provide to the Administrative Agent
promptly upon request a summary report of the nature and extent of LOC
Obligations then outstanding.
(iii) PARTICIPATIONS. Each Lender upon issuance of a Letter of
Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and nature
of each Lender's participation in any Letter of Credit, to the extent that
the Issuing Lender has not been reimbursed as required hereunder or under
any LOC Document, each such Lender shall pay to the Issuing Lender its LOC
Commitment Percentage of such unreimbursed drawing in same day funds on
the day of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (iv) below if such notice is
received at or before 2:00 p.m.,
New York city time, otherwise such
payment
37
shall be made at or before 12:00 Noon,
New York city time, on the Business
Day next succeeding the day such notice is received. The obligation of
each Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default or
any other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the Issuing
Lender under any Letter of Credit, together with interest as hereinafter
provided.
(iv) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the first Business Day after the day any drawing under any Letter of
Credit is duly honored by the Issuing Lender (with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the
Alternate Base Rate plus the Applicable Rate. Unless the Borrower shall
immediately notify the Issuing Lender and the Administrative Agent of its
intent to otherwise reimburse the Issuing Lender, the Borrower shall be
deemed to have requested a Revolving Loan in the amount of the drawing as
provided in subsection (v) below, the proceeds of which will be used to
satisfy the reimbursement obligations. The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or
defense to payment the Borrower may claim or have against the Issuing
Lender, the Administrative Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of
the Letter of Credit. The Issuing Lender will promptly notify the other
Lenders of the amount of any unreimbursed drawing and each Lender shall
promptly pay to the Administrative Agent for the account of the Issuing
Lender in dollars and in immediately available funds, the amount of such
Lender's LOC Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 p.m.,
New York city time, otherwise such payment shall be made at or before
12:00 Noon,
New York city time, on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to
the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of
such drawing until such Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days of
the date of drawing, the Federal Funds Effective Rate and thereafter at a
rate equal to the Alternate Base Rate. Each Lender's obligation to make
such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence
of a Default or the acceleration of the Obligations and shall be made
without any offset, abatement, withholding or reduction whatsoever.
38
(v) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
to reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of Credit,
in which case a Revolving Loan Borrowing comprised entirely of ABR Loans
(each such borrowing, a "MANDATORY BORROWING") shall be immediately made
(without giving effect to any termination of the Commitments pursuant to
Section 7.01) PRO RATA based on each Lender's respective Revolving
Commitment (determined before giving effect to any termination of the
Commitments pursuant to Section 7.01) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each Lender hereby irrevocably agrees to make such Revolving
Loans immediately upon any such request or deemed request on account of
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date NOTWITHSTANDING (I) the
amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.02 are then satisfied, (III) whether
a Default then exists, (IV) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required in Section
2.03, (V) the date of such Mandatory Borrowing, or (VI) any reduction in
the aggregate amount of Revolving Commitments after any such Letter of
Credit may have been drawn upon. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law with respect to the Borrower), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to
such purchase) its Participation Interests in the outstanding LOC
Obligations; PROVIDED, FURTHER, that in the event any Lender shall fail to
fund its Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable to the Issuing
Lender upon demand, at the rate equal to, if paid within two (2) Business
Days of such date, the Federal Funds Effective Rate, and thereafter at a
rate equal to the Alternate Base Rate.
(vi) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES. Notwithstanding
anything to the contrary set forth in this Agreement, including without
limitation Section 2.02(b)(i), a Letter of Credit issued hereunder may
contain a statement to the effect that such Letter of Credit is issued for
the account of a Subsidiary of the Borrower, provided that notwithstanding
such statement, the Borrower shall be the actual account party for all
purposes of this Agreement for such Letter of Credit and such statement
shall not affect the Borrower's reimbursement obligations hereunder with
respect to such Letter of Credit.
39
(vii) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(viii) UNIFORM CUSTOMS AND PRACTICES/INTERNATIONAL STANDBY PRACTICES
1998. The Issuing Lender shall have the Letters of Credit be subject to
The Uniform Customs and Practice for Documentary Credits (the "UCP") or
the International Standby Practices 1998 (the "ISP98"), in either case as
published as of the date of issue by the International Chamber of
Commerce, in which case the UCP or ISP98, as applicable, may be
incorporated therein and deemed in all respects to be a part thereof.
(ix) APPLICABILITY. Notwithstanding anything else in this Section
2.02(b) to the contrary, the provisions of this Section 2.02(b) shall only
apply to those Lenders that have Revolving Commitments.
SECTION 2.03. REQUESTS FOR BORROWING.
To request a Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a LIBOR Borrowing (other than a
Tranche A-3 Borrowing), not later than 11:00 a.m.,
New York City time, three
Business Days before the date of the proposed Borrowing, (b) in the case of an
ABR Borrowing (other than a Tranche A-3 Borrowing), not later than 11:00 a.m.,
New York City time, one Business Day before the date of the proposed Borrowing
or (c) in the case of a Tranche A-3 Borrowing, not later than 11:00 a.m., New
York City time, five Business Days before the date of the proposed Borrowing;
provided, that in the case of any Tranche A-3 Loans funded by a CSCC Lender all
Borrowings of Tranche A-3 Loans shall be requested as set forth in the CSCC
Borrowing Procedures Letter. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a LIBOR Borrowing or an ABR
Borrowing and whether such Borrowing shall consist of Tranche A-1 Loans,
Tranche A-2 Loans, Tranche A-3 Loans or Revolving Loans;
(iv) in the case of a LIBOR Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period";
40
(v) with respect to any Tranche A-3 Borrowing, whether any portion
of such Borrowing is to be used by the Borrower for the purposes of
funding payment to a Cisco Vendor other than Cisco Systems and the amount
of such portion;
(vi) the location and number of the account or accounts to which
funds (if any) are to be disbursed, which shall comply with the
requirements of Section 2.04;
(vii) a representation by the Borrower that, after giving effect to
such Borrowing, the Borrower has complied with the terms of Section 4.02;
and
(viii) in the case of a Tranche A-3 Borrowing (x) involving a CSCC
Lender and (y) the proceeds of which are used to pay (or to finance the
previous payment of) the purchase price of Cisco Products, a
representation by the Borrower that it has delivered to all applicable
CSCC Lenders copies of the relevant unpaid invoices of such Cisco
Products.
Each such written Borrowing Request shall also certify that there shall not
exist, on the date of the requested Borrowing and after giving effect thereto, a
Default. If any portion of the proceeds of a Tranche A-3 Loan Borrowing funded
by a CSCC Lender is to be used by the Borrower for the purpose of funding
payment to a Cisco Vendor other than Cisco Systems, such portion of such
Borrowing shall be requested and available only if CSCC has executed (such
execution not to be unreasonably withheld) the Borrowing Request with respect to
such Borrowing.
The Tranche A-3 Loan to be made by ▇▇▇▇ Telecom shall be funded on the
Second Amendment Effective Date in accordance with the provisions of the
commitment letter dated April 12, 2001 delivered by ▇▇▇▇ Telecom, without need
for submission of a Borrowing Request, as a LIBOR Borrowing for a 6 month
Interest Period.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested LIBOR Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Except as
to a Tranche A-3 Borrowing, if no election as to the Class of Borrowing is
specified, then the requested Borrowing shall consist of Revolving Loans.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each applicable Lender of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing.
So long as any CSCC Lender holds any Tranche A-3 Commitment, the proviso
in the first sentence and the last sentence in the first paragraph of this
Section 2.03 may not be amended, modified or waived without the prior written
consent of CSCC.
SECTION 2.04. FUNDING OF BORROWINGS.
(a) Each Lender shall make each 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
41
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower designated by the Borrower in the applicable
Borrowing Request. Without limiting the generality of the foregoing, in the case
of any Tranche A-3 Loans made at any time when any CSCC Lender holds any Tranche
A-3 Commitment:
(i) If any such Tranche A-3 Loans are requested from a CSCC Lender
for the purpose of funding payment of any unpaid invoice due to a Cisco
Vendor, the applicable Borrowing Request submitted by the Borrower may
contain a certification that the proceeds of such Tranche A-3 Loans will
be disbursed directly to Cisco Systems and/or the applicable Cisco Vendors
and such unpaid invoice has been provided to the Borrower, in which case
such Tranche A-3 Loans shall be funded by such CSCC Lender directly to
Cisco Systems and/or the applicable Cisco Vendors and not to the
Administrative Agent;
(ii) A Borrowing Request for Tranche A-3 Loans from a CSCC Lender
may be submitted by CSCC instead of the Borrower so long as (A) CSCC
certifies in such Borrowing Request that the Tranche A-3 Loans funded by
such CSCC Lender (each such funding, a "DEEMED BORROWING") pursuant to
such Borrowing Request will be used to pay an unpaid invoice issued by
Cisco Systems to the Borrower that remains unpaid more than 30 days after
the invoice date (and the Administrative Agent shall be entitled to rely
on such certification without further investigation), (B) such Borrowing
Request certifies that the proceeds of the requested Tranche A-3 Loans
will be disbursed directly to Cisco Systems, in which case such Tranche
A-3 Loans shall be funded by such CSCC Lender directly to Cisco Systems
and not the Administrative Agent and (C) a copy of such Borrowing Request
is promptly submitted by CSCC to the Borrower on the same Business Day it
is submitted to the Administrative Agent (and the Administrative Agent
receives evidence that such condition has been satisfied); PROVIDED, that
any Borrowing Request submitted by CSCC shall not be effective if the
Administrative Agent receives, within five Business Days after CSCC
delivers such Borrowing Request, a written notice from the Borrower
instructing the Administrative Agent not to honor such Borrowing Request
because the Borrower has either paid the invoice(s) or disputes its
liability with Cisco in respect thereof (which written notice shall be
promptly provided by the Borrower to CSCC); provided, further that no
Deemed Borrowing may occur after notice to the Borrower and CSCC by the
Administrative Agent that an Event of Default has occurred and is
continuing (until such Event of Default is cured or waived) except for any
Deemed Borrowing(s) with respect to any invoice(s) then outstanding at
such time and with respect to Cisco Product that has been shipped for
delivery; and
(iii) Upon delivery of any such Borrowing Request executed by CSCC,
CSCC shall promptly obtain and deliver to the Administrative Agent and the
Borrower confirmation that such funding was made and an acknowledgment by
Cisco Systems that the amount funded was applied to the payment of such
invoice;
(iv) If the Borrowing Request submitted by CSCC with respect to any
such Tranche A-3 Loans instructs the Administrative Agent to pay the
proceeds of such Tranche A-3 Loans directly to the Tranche A-3 Account,
the Administrative Agent shall
42
(and is hereby irrevocably authorized by the Borrower to) pay such
proceeds directly to the Tranche A-3 Account in the amounts specified in
such Borrowing Request unless the Administrative Agent has received a
notice not to honor as set forth in the proviso in clause (ii) above.
The Borrower shall be liable for payment of all Indebtedness in
respect of Tranche A-3 Loans whether arising from a funding made pursuant
to a Borrowing Request signed by the Borrower or from a funding made
pursuant to a Borrowing Request signed by CSCC on behalf of the Borrower
in accordance with Section 2.04(a)(ii). If the Borrower provides written
notice to the Administrative Agent in accordance with clause (ii) above
instructing the Administrative Agent not to honor a Borrowing Request
submitted by CSCC, then no Tranche A-3 Borrowing may be effectuated or
requested by CSCC, and no Borrowing Request may be executed and delivered
by CSCC, for purposes of paying any invoices issued by Cisco Systems. So
long as any CSCC Lender holds any Tranche A-3 Commitment, Section
2.04(a)(i), (ii), (iii) or (iv) may not be amended, modified or waived
without the prior written consent of CSCC.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
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 Borrowing available to the Administrative Agent, then the
applicable Lender agrees 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 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. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.05. INTEREST ELECTIONS.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
43
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required to be made under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02 and paragraph (f) of
this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a LIBOR Borrowing or
an ABR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the Interest
Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term
"Interest Period."
If any such Interest Election Request requests a LIBOR Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a LIBOR Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBOR Borrowing at the end of the then current Interest Period and (ii) unless
repaid, each LIBOR Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued as a
LIBOR Borrowing if after giving effect thereto both (i) the Interest Period
therefor would commence
44
before and end after a date on which any principal of the Loans of such Class is
scheduled to be repaid or, with respect to Revolving Loans, the Revolving
Commitment is scheduled to be reduced pursuant to Section 2.08(c) and (ii) the
sum of the aggregate principal amount of outstanding LIBOR Borrowings of such
Class with Interest Periods ending on or prior to such scheduled Repayment date
(or scheduled reduction date) plus the aggregate principal amount of outstanding
ABR Borrowings of such Class would be less than the aggregate principal amount
of Loans of such Class required to be repaid on such scheduled Repayment date
(or scheduled reduction date).
SECTION 2.06. TERMINATION, REDUCTION AND INCREASE OF COMMITMENTS.
(a) Unless previously terminated, the Commitments with respect to ▇▇▇▇▇▇▇
▇-▇, ▇-▇ and A-3 Loans shall terminate on, respectively, the Tranche A-1
Availability Termination Date, the Tranche A-2 Availability Termination Date and
the Tranche A-3 Availability Termination Date, and the Commitments with respect
to Revolving Loans shall terminate on the Maturity Date.
(b) On the date of each Revolving Loan Borrowing, the Commitments with
respect to Revolving Loans shall be temporarily reduced by an amount equal to
such Revolving Loan until such Revolving Loan is repaid.
(c) If a prepayment of Revolving Loans is required pursuant to Section
2.09, then the Revolving Commitment shall be reduced by an amount equal to such
prepayment.
(d) Subject to Section 2.06(e), the Borrower may at any time terminate, or
from time to time reduce, the Commitments; PROVIDED, HOWEVER, that (i) no such
reduction or termination shall be permitted if after giving effect thereto and
to any prepayments of the Loans made on the effective date thereof, (A) the sum
of the then outstanding aggregate principal amount of the Revolving Loans PLUS
LOC Obligations would exceed the aggregate Revolving Commitment then in effect,
(B) the sum of the then outstanding aggregate principal amount of the Tranche
A-1 Loans would exceed the aggregate Tranche A-1 Commitment then in effect, (C)
the sum of the then outstanding aggregate principal amount of Tranche A-2 Loans
would exceed the aggregate Tranche A-2 Commitment then in effect and (D) the sum
of the then outstanding aggregate principal amount of Tranche A-3 Loans would
exceed the aggregate Tranche A-3 Commitment then in effect, and (ii) unless such
reduction causes the Commitments to be reduced to zero (A) each reduction of the
Commitments pursuant to this paragraph (d) shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (B) unless at
such time no Loans are outstanding, the Borrower shall not terminate or reduce
the Commitments if the Commitments remaining following the proposed termination
or reduction, together with other identified funds available to Borrower, are
not, in the reasonable opinion of the Administrative Agent (upon consultation
with an independent engineer), sufficient to complete the Network in accordance
with the Annual Business Plan.
(e) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (d) of this Section 2.06 at
least five Business Days prior to the proposed effective date of such
termination or reduction, specifying such election
45
and the proposed effective date thereof; PROVIDED, HOWEVER, that such
termination or reduction shall become effective when and only to the extent that
the Administrative Agent reasonably determines the Borrower has complied with
the requirements of paragraph (d) of this Section 2.06. Promptly following such
determination, the Administrative Agent shall advise the Lenders thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable
subject to the determination by the Administrative Agent of the compliance by
the Borrower with the requirements of paragraph (d) of this Section 2.06. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Tranche A-1 Commitments or Tranche A-2 Commitments pursuant to paragraph
(e) of this Section 2.06 shall be made ratably among the Lenders in accordance
with their respective Tranche A-1 Commitments and Tranche A-2 Commitments.
(f) Subject to the terms and conditions set forth herein, upon ten (10)
Business Days advance written notice to the Administrative Agent, the Borrower
shall have the right, at any time and from time to time from the Effective Date
until sixty (60) days prior to the Maturity Date, to increase the aggregate
amount of the Commitments hereunder (either by an increase in the Tranche A-1
Commitments or Tranche A-2 Commitments (allocated to the Tranche A-1 Commitment
and the Tranche A-2 Commitment on a pro rata basis) or by an increase in the
Tranche A-3 Commitments or by the addition of a new tranche of term loans under
this Agreement that has a weighted average life to maturity equal to or longer
than the Tranche A-1 and Tranche A-2 Term Loans and otherwise is pari passu with
the Loans and LOC Obligations in all respects, including as to ranking,
security, mandatory prepayments and voting issues) by an aggregate amount not to
exceed the lesser of (x) $150,000,000 and (y) the product of (A) the aggregate
cash proceeds of cash contributions to capital or the issuance and sale of
equity interests in the Borrower received by the Borrower at any time after the
Second Amendment Effective Date that are not required to be used to prepay the
Loans and cash collateralize the LOC Obligations in accordance with the terms of
Section 2.09(e) multiplied by (B) 0.50; PROVIDED, FURTHER, that
(i) any such increase in the Tranche A-1 Commitments or Tranche A-2
Commitments shall be in a minimum principal amount of $5,000,000 and
integral multiples of $1,000,000 in excess thereof (or the remaining
amount, if less),
(ii) any such increase pursuant to the addition of a new tranche of
term loans shall be in a minimum principal amount of $20,000,000 and
integral multiples of $1,000,000 in excess thereof (or the remaining
amount, if less),
(iii) if the Tranche ▇-▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇-▇ Commitments or
Tranche A-3 Commitments are increased and if any Tranche A-1 Loans,
Tranche A-2 Loans or Tranche A-3 Loans are outstanding at the time of any
such increase, the Lenders shall assign portions of their outstanding
Tranche A-1 Loans, Tranche A-2 Loans or Tranche A-3 Loans (and their
unfunded Commitments shall automatically be increased by an identical
amount) to other Lenders (including new Lenders) as necessary to conform
to the revised Tranche A-1 Commitments, Tranche A-2 Commitments and
Tranche A-3 Commitments of the Lenders resulting from such increase and
the Borrower shall pay
46
any break-funding amount owing under Section 2.14 in connection with such
assignments,
(iv) to the extent such increase is an increase of the Tranche A-1
Commitment and (A) such increase is effective prior to the Tranche A-1
Availability Termination Date, the Borrower shall have the right to borrow
up to the full amount of such increase until the Tranche A-1 Availability
Termination Date, or (B) such increase is effective on or after the
Tranche A-1 Availability Termination Date, a Borrowing of Tranche A-1
Loans in the amount of such increase in the Tranche A-1 Commitment shall
be made on the effective date of such increase,
(v) to the extent such increase is an increase of the Tranche A-2
Commitment and (A) such increase is effective prior to the Tranche A-2
Availability Termination Date, the Borrower shall have the right to borrow
up to the full amount of such increase until the Tranche A-2 Availability
Termination Date, or (B) such increase is effective on or after the
Tranche A-2 Availability Termination Date, a Borrowing of Tranche A-2
Loans in the amount of such increase in the Tranche A-2 Commitment shall
be made on the effective date of such increase,
(vi) to the extent such increase is an increase of any Tranche A-3
Commitments, the Borrower and the Lenders committing to provide such
increase in Tranche A-3 Commitments may independently agree (without any
right of consent by any other Lender or the Administrative Agent) to
extend to any date satisfactory to them the availability period during
which Tranche A-3 Loans that are committed under such increase may be
requested by the Borrower and are to be funded by such Lenders, and
(vii) the conditions to borrowing set forth in Section 4.02 shall be
satisfied as of the date of such increase.
It is hereby acknowledged and agreed that (a) the increase in the
aggregate amount of the Commitments and Loans hereunder resulting from the
addition of the Tranche A-3 Commitments as of the Second Amendment Effective
Date has been made pursuant to the terms of this Section 2.06(f), (b) the
Tranche A-3 Commitments and Tranche A-3 Loans shall constitute Commitments and
Loans, respectively, for all purposes under this Agreement, including, without
limitation, Section 9.02(b) and the definition of "Required Lenders," and (c)
the amount of the increase in the aggregate Commitments permitted by this
Section 2.06(f), as in effect on the Second Amendment Effective Date, shall be
in addition to, and shall not be reduced by, the amount of the Tranche A-3
Commitments added to this Agreement as of the Second Amendment Effective Date.
Any increase in the Commitments hereunder (including pursuant to the addition of
a new tranche of term loans) shall be subject to satisfaction of the following:
(1) the amount of such increase shall be offered first to the existing Lenders,
and in the event the additional commitments which existing Lenders are willing
to take shall exceed the amount requested by the Borrower, then (x) each
existing Lender that is willing to provide a portion of such increase (each a
"Committing Lender") shall be entitled to provide an amount up to its pro rata
share of such increase based on the amount of its existing Commitments and (y)
if there is any portion of such increase remaining after giving effect to clause
(x), then the Borrower, in
47
consultation with the Administrative Agent, shall determine how the remaining
portion of such increase is disbursed among the Committing Lenders (taking into
consideration the amount of the additional commitments which each Committing
Lender was initially willing to take) so that such increase is fully committed,
(2) if the amount of the additional commitments requested by the Borrower shall
exceed the additional commitments which the existing Lenders are willing to
take, then the Borrower may invite other Eligible Persons to join this
Credit
Agreement as Lenders hereunder for the portion of commitments not taken by
existing Lenders, provided that such other Eligible Persons shall enter into
such joinder agreements to give effect thereto as the Administrative Agent and
the Borrower may reasonably request and (3) the Borrower shall execute and/or
deliver to the Administrative Agent such promissory notes, certified
resolutions, opinions of counsel and such modifications to this Agreement
(including revisions of SCHEDULE 2.1(a)) and the other Loan Documents as the
Administrative Agent shall reasonably request in connection with such increase.
The Lenders hereby authorize the Administrative Agent, on their behalf, to
execute any amendment or modification to this Agreement and the other Loan
Documents necessary to consummate any increase in the Commitments pursuant to
this Section.
SECTION 2.07. REPAYMENT OF 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 Loan of such Lender as provided in Section 2.08.
(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 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 Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(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 Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender such 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 the form set forth as Exhibit D. Thereafter, the 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
48
form 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).
(f) Vendor Product financed by Loans under this Agreement may be ordered
or purchased by, and delivered to, the Borrower or (subject to the other
provisions of this Agreement) any Subsidiary. The Borrower acknowledges that (i)
it will receive an immediate and direct benefit, in the form of an increase in
the value of its investment in the Subsidiary, if any such Vendor Product is
ordered by and delivered to a Subsidiary, (ii) all such Loans shall be made for
the account of the Borrower and (iii) the Borrower's liability for such Loans
shall not be affected in any respect by reason of the fact that a Subsidiary,
rather than the Borrower, received delivery of, or title to, such Vendor
Product.
SECTION 2.08. AMORTIZATION OF LOANS; MANDATORY REDUCTIONS OF REVOLVING
COMMITMENT.
(a) Subject to adjustment pursuant to paragraph (d) of this Section, the
Borrower shall Repay Tranche A-1 Loans and Tranche A-2 Loans on each of the
following Payment Dates in an aggregate amount equal to the percentage set forth
opposite such Payment Date of the sum of all Tranche A-1 Loans and Tranche A-2
Loans made or deemed made hereunder (including amounts previously repaid or
prepaid):
PAYMENT DATES PERCENTAGE
------------- ----------
September 30, 2002 2.50%
December 31, 2002 2.50%
March 31, 2003 2.50%
June 30, 2003 2.50%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 6.25%
December 31, 2004 6.25%
March 31, 2005 6.25%
June 30, 2005 6.25%
September 30, 2005 7.50%
December 31, 2005 7.50%
March 31, 2006 7.50%
June 30, 2006 7.50%
September 30, 2006 10.00%
December 31, 2006 10.00%
49
(b) Subject to adjustment pursuant to paragraph (d) of this Section, the
Borrower shall Repay Tranche A-3 Loans on each of the following Payment Dates in
an aggregate amount equal to the percentage set forth opposite such Payment Date
of the sum of all Tranche A-3 Loans made or deemed made hereunder (including
amounts previously repaid or prepaid):
PAYMENT DATES PERCENTAGE
------------- ----------
March 31, 2003 1.25%
June 30, 2003 3.75%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 6.75%
December 31, 2004 6.75%
March 31, 2005 7.00%
June 30, 2005 7.25%
September 30, 2005 8.00%
December 31, 2005 8.00%
March 31, 2006 8.00%
June 30, 2006 8.25%
September 30, 2006 10.00%
December 31, 2006 10.00%
(c) The Revolving Commitment shall be reduced on each of the following
Reduction Dates in an aggregate amount equal to the percentage set forth
opposite such Reduction Date of the initial Revolving Commitment and, if on any
such Reduction Date the outstanding Revolving Loans and LOC Obligations exceed
the Revolving Commitment as so reduced, the Borrower shall Repay Revolving Loans
on each such Reduction Date in an amount such that after giving effect to such
reduction of the Revolving Commitment and corresponding Repayment, the amount of
Revolving Loans and LOC Obligations outstanding shall not exceed the Revolving
Commitment.
REDUCTION DATES PERCENTAGE
--------------- ----------
March 31, 2003 2.50%
June 30, 2003 2.50%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 6.25%
December 31, 2004 6.25%
March 31, 2005 6.25%
June 30, 2005 6.25%
September 30, 2005 8.75%
December 31, 2005 8.75%
50
REDUCTION DATES PERCENTAGE
--------------- ----------
March 31, 2006 8.75%
June 30, 2006 8.75%
September 30, 2006 10.00%
December 31, 2006 10.00%
(d) To the extent not previously paid, all Loans of each Class shall be
due and payable on the Maturity Date.
(e) Any prepayment of a Borrowing of any Class shall be applied to reduce
ratably the subsequent scheduled Repayments of the Borrowings of such Class to
be made pursuant to this Section; provided, however, with respect to optional
prepayments only, if any scheduled Repayment shall be due within 90 days of such
optional prepayment, then at the Borrower's election, the Borrower may apply
such prepayment to such next scheduled Repayment only, and then ratably to the
remaining scheduled Repayments occurring thereafter.
(f) Prior to any Repayment of any Loans of any Class hereunder, the
Borrower shall select the applicable Classes and Types of Loans to be repaid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such Repayment; PROVIDED that (i) each
Repayment of Loans of any Class shall be applied to repay any outstanding ABR
Loans of such Class before any other Loans of such Class, (ii) all such
Repayments made pursuant to Section 2.08(a) shall be applied to reduce ratably
Borrowings of Tranche A-1 Loans and Tranche A-2 Loans (iii) all such Repayments
made pursuant to Section 2.08(b) shall be applied to reduce ratably Borrowings
of Tranche A-3 Loans and (iv) all such Repayments (if any) made pursuant to
Section 2.08(c) shall be applied to reduce ratably Borrowings of Revolving Loans
and (after all Revolving Loans have been repaid) to a cash collateral account in
respect of LOC Obligations. If the Borrower fails to make a timely selection of
the Loan or Loans to be repaid, such Repayment shall be applied, first, to repay
any outstanding ABR Loans of the applicable Class and, second, to other Loans of
the applicable Class in the order of the remaining duration of their respective
Interest Periods (the Loans with the shortest remaining Interest Period to be
repaid first). Any Repayment of the Loans shall be applied to reduce ratably the
subsequent scheduled Repayments of the then-outstanding and unpaid balances of
the Loans of the same Class and Type then outstanding. Repayments of Loans shall
be accompanied by the payment of accrued interest on the amount of the Repayment
thereof.
SECTION 2.09 PREPAYMENT OF LOANS.
(a) The Borrower shall have the right at any time and from time to time to
prepay any Loan in whole or in part, subject to the requirements of this Section
2.09, without penalty or premium (except as provided in Section 2.14 or 2.15).
(b) In the event and on each occasion that any Net Proceeds are received
by or on behalf of the Borrower or any of its Subsidiaries in respect of any
Prepayment Event, the Borrower shall, within ten Business Days after such Net
Proceeds are received, prepay Loans
51
and cash collateralize LOC Obligations to the extent required by Section 2.09(g)
in an aggregate amount equal to 50% of such Net Proceeds.
(c) Following the end of each fiscal year of the Borrower, commencing with
the fiscal year in which the Conversion Date occurs, the Borrower shall prepay
Loans and cash collateralize LOC Obligations to the extent required by Section
2.09(g) in an aggregate amount equal to 50% of the Excess Cash Flow for such
fiscal year if the Consolidated Leverage Ratio at the end of such fiscal year
exceeded 4.00:1.00 (PROVIDED that such prepayment shall be in an aggregate
amount equal to 100% of Excess Cash Flow if a Default or Event of Default has
occurred and is continuing on the date such payment is due). Each prepayment
pursuant to this paragraph shall be made on or before the date on which
financial statements are delivered pursuant to Section 5.01 with respect to the
fiscal year for which Excess Cash Flow is being calculated (and in any event
within 90 days after the end of such fiscal year).
(d) In the event and on each occasion that the Borrower Repays any
Indebtedness, then the Borrower shall, within three Business Days after the date
of such Repayment, prepay Loans and cash collateralize LOC Obligations to the
extent required by Section 2.09(g) in an aggregate amount equal to the product
of (x) the sum of the aggregate principal amount of the Loans outstanding at the
time, multiplied by (y) a fraction, the numerator of which is the aggregate
principal amount of such Repayment, and the denominator of which is the amount
of Consolidated Indebtedness (excluding, to the extent included in the
determination thereof, Purchase Money Debt, the Repayment of which does not
require the Repayment of Loans under this Section 2.09(d)) immediately prior to
such Repayment; PROVIDED that prepayments of Borrowings shall not be required
pursuant to this paragraph in respect of (i) any Repayment of the Loans or any
Purchase Money Debt, (ii) any scheduled Repayment or mandatory prepayment of
Indebtedness, (iii) any Repayment of Indebtedness to the extent such Repayment
is refinanced by incurring other Indebtedness that (A) has a scheduled maturity
date that is on or after the scheduled maturity date of the Indebtedness being
refinanced, (B) has a weighted average life to maturity that is equal to or
longer than the remaining weighted average life to maturity of the Indebtedness
being refinanced, determined immediately prior to giving effect to such
Repayment, (C) does not include any provisions that may require mandatory
Repayment thereof prior to scheduled maturity, other than scheduled Repayments
taken into consideration in determining compliance with clause (B) above and
other provisions that are not materially more burdensome than any such
provisions included in the Indebtedness being refinanced, and (D) is issued or
incurred by the same Person that issued or incurred the Indebtedness being
refinanced and is not guaranteed or secured by any Lien unless the Indebtedness
being refinanced was guaranteed or secured (in which case such Indebtedness
shall not be guaranteed by any Person that did not guarantee the Indebtedness
being refinanced and shall not be secured by a Lien on any asset that did not
secure the Indebtedness being refinanced), or (iv) any Repayment of Revolving
Loans.
(e) In the event and on each occasion that the Borrower receives an equity
contribution (other than an Excluded Equity Contribution) from the Parent after
the Second Amendment Effective Date, the Borrower shall, within three Business
Days after such equity contribution, prepay Loans and cash collateralize LOC
Obligations to the extent required by Section 2.09(g) in an amount equal to 25%
of the aggregate cash proceeds net of reasonable fees
52
and expenses of such equity contribution; PROVIDED, that the aggregate amount of
Loans prepaid pursuant to this subsection (e) shall not exceed ***********.
(f) If at any time the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS LOC Obligations shall exceed the aggregate
Revolving Commitment then in effect, the Borrower immediately shall prepay the
Revolving Loans and (after all Revolving Loans have been repaid) cash
collateralize the LOC Obligations, in an amount sufficient to eliminate such
excess.
(g) All prepayments pursuant to this Section 2.09 (other than voluntary
prepayments of Revolving Loans and prepayments pursuant to Section 2.09(f))
shall be allocated between the holders of the Tranche A-3 Loans on the one hand
(the "NEW LENDER CLASS") and the holders of the Tranche A-1 Loans, Tranche A-2
Loans and Revolving Loans on the other hand (the "EXISTING LENDER CLASS")
pursuant to the Allocation Formula (as defined below). Amounts allocated to the
Tranche A-3 Loans shall be applied to the aggregate principal balance of Tranche
A-3 Loans outstanding and credited pro rata to the future scheduled amortization
payments thereof and amounts allocated to the Tranche A-1 Loans, Tranche A-2
Loans and Revolving Loans shall be applied first, pro rata to the aggregate
principal balance of Tranche A-1 Loans outstanding until the Tranche A-1 Loans
are paid in full (and credited pro rata to the future scheduled amortization
payments owing with respect to such Tranche A-1 Loans), second pro rata to the
aggregate principal balance of Tranche A-2 Loans outstanding until the Tranche
A-2 Loans are paid in full (and credited pro rata to the future scheduled
amortization payments owing with respect to such Tranche A-2 Loans) and third
pro rata to the outstanding Revolving Loans and after all Revolving Loans have
been repaid to a cash collateral account pro rata in respect of outstanding LOC
Obligations (with a corresponding reduction in each case of the Revolving
Commitments and with such reduction credited to the future scheduled Revolving
Commitment reductions under Section 2.08(c) on a pro rata basis); provided,
however, (i) notwithstanding the foregoing, the Allocation Formula shall not
apply to any prepayment that is made in connection with a Prepayment Event
related to Dark Fiber/Conduit Dispositions, and each such prepayment instead
shall be applied to the outstanding Tranche A Loans and Revolving Loans
(ratably, based on the outstanding principal amount of Tranche A Loans and
unfunded Tranche A Commitments in each tranche and the outstanding amount of the
Revolving Commitments) and shall be credited in direct order of maturity to the
future scheduled amortization payments and Revolving Commitment reductions under
Sections 2.08(a), 2.08(b) and 2.08(c), (ii) if, at the time of a prepayment
application referred to above, the applicable Class of Loans to which such
prepayment is to be made does not have an outstanding principal balance but does
have an unfunded Commitment, such prepayment amount for such Class shall be
deemed to reduce the unfunded Commitment of such Class (with the cash amount of
such prepayment retained by the Borrower) and (iii) if, at the time of a
prepayment application referred to above that is to be apportioned pursuant to
the Allocation Formula, either the New Lender Class or the Existing Lender Class
has been paid in full and all Commitments with respect thereto have been
terminated, the prepayment amount otherwise allocable to such Class shall
instead be applied to the Class with Loans and/or Commitments that remain
outstanding. For the purposes set forth above the term "Allocation Formula"
means that the prepayment amount described above shall be allocated (1) to the
Tranche A-3 Loans based on a percentage calculated by dividing the Tranche A-3
Commitment by the sum of the total Tranche A Commitments plus the Revolving
Commitment and (2) to the Tranche A-1 Loans, Tranche A-2
53
Loans and Revolving Loans based on a percentage calculated by dividing the sum
of the Tranche A-1 Commitment plus the Tranche A-2 Commitment plus the Revolving
Commitment by the sum of the total Tranche A Commitments plus the Revolving
Commitment. All prepayments pursuant to Section 2.09(f) shall be applied in
accordance with the terms of such Section. Within the foregoing parameters,
prepayments shall be applied first to ABR Loans and then to LIBOR Loans in
direct order of Interest Period maturities.
(h) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a LIBOR Loan, not later than 1:00 p.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Loan, 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 Loan or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Loan shall be in an amount
that is an integral multiple of $500,000 and not less than $5,000,000 for any
LIBOR Loan and an integral multiple of $500,000 and not less than $1,000,000 for
any ABR Loan, except as necessary to apply fully the required amount of a
mandatory prepayment. Prepayments of Borrowings shall be accompanied by the
payment of accrued interest on the amount prepaid.
Section 2.10. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the account
of the Lenders holding a Revolving Commitment, Tranche A-1 Commitment or Tranche
A-2 Commitment a commitment fee (the "COMMITMENT FEE") of 1.5% per annum on the
daily average of the undrawn Revolving Commitment, Tranche A-1 Commitment and
Tranche A-2 Commitment (the "UNDRAWN COMMITMENT") from March 30, 2000 until the
expiration of all Availability Periods. For purposes of determining the Undrawn
Commitment, (i) outstanding Revolving Loans, Tranche A-1 Loans, Tranche A-2
Loans and LOC Obligations shall constitute usage of the Revolving Commitment,
Tranche A-1 Commitment and Tranche A-2 Commitment and (ii) the amount of the
Revolving Commitment, Tranche A-1 Commitment and Tranche A-2 Commitment used in
such calculation shall be the aggregate Revolving Commitment, Tranche A-1
Commitment and Tranche A-2 Commitment as of the Effective Date. The Commitment
Fee shall be payable quarterly in arrears on the 15th day following the last day
of each calendar quarter for the prior calendar quarter and shall be reduced as
the Undrawn Commitment is reduced in accordance with the schedule below.
COMMITMENT FEE
UNDRAWN COMMITMENT PERCENTAGE
Greater than 75% of total Commitment 1.50%
Greater than 66% but Less than or Equal to 75% of total Commitment 1.25%
Greater than 50% but Less than or Equal to 66% of total Commitment 1.00%
Less than or Equal to 50% of total Commitment 0.75%
54
After the Conversion Date, if the Consolidated Leverage Ratio as of any two
consecutive Quarterly Dates is equal to or less than 4.0 to 1.0, then the
Commitment Fee shall be reduced to 0.50%.
(b) The Borrower agrees to pay to the Administrative Agent for the account
of the Lenders holding a Tranche A-3 Commitment a commitment fee (the "TRANCHE
A-3 COMMITMENT FEE") of **** per annum on the daily average of the undrawn
Tranche A-3 Commitment (the "UNDRAWN TRANCHE A-3 COMMITMENT") from the Second
Amendment Effective Date until the expiration of the Tranche A-3 Availability
Period. For purposes of determining the Undrawn Tranche A-3 Commitment, (i)
outstanding Tranche A-3 Loans shall constitute usage of the Tranche A-3
Commitment and (ii) the amount of the Tranche A-3 Commitment used in such
calculation shall be the aggregate Tranche A-3 Commitment as the Tranche A-3
Commitment Fee accrues. The Tranche A-3 Commitment Fee shall be payable
quarterly in arrears on the 15th day following the last day of each calendar
quarter for the prior calendar quarter and shall be reduced as the Undrawn
Tranche A-3 Commitment is reduced in accordance with the schedule below.
TRANCHE A-3
COMMITMENT FEE
UNDRAWN TRANCHE A-3 COMMITMENT PERCENTAGE
Greater than 75% of total Commitment *****
Greater than 66% but Less than or Equal to 75% of total Commitment *****
Greater than 50% but Less than or Equal to 66% of total Commitment *****
Less than or Equal to 50% of total Commitment *****
After the Conversion Date, if the Consolidated Leverage Ratio as of any two
consecutive Quarterly Dates is equal to or less than *** to 1.0, then the
Tranche A-3 Commitment Fee shall be reduced to *****.
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees set forth in the Fee Letter. The Borrower agrees to pay to CSCC,
for its own account, fees set forth in the Tranche A-3 Fee Letter. The second
sentence of this Section 2.10(c) may not be amended, modified or waived without
the prior written consent of CSCC.
(d) In consideration of the LOC Commitments, the Borrower agrees to pay to
the Issuing Lender a fee (the "LETTER OF CREDIT FEE") of one-fourth of one
percent (1/4%) per annum on the average daily maximum amount available to be
drawn under each Letter of Credit from the date of issuance to the date of
expiration. In addition to such Letter of Credit Fee, the Issuing Lender may
charge, and retain for its own account without sharing by the other Lenders, an
additional facing fee of one-eighth of one percent (1/8%) per annum on the
average daily maximum amount available to be drawn under each such Letter of
Credit issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders holding Revolving
Commitments (including the Issuing Lender) the Letter of Credit
55
Fee. The Letter of Credit Fee shall be payable quarterly in arrears on the 15th
day following the last day of each calendar quarter for the prior calendar
quarter.
(e) In addition to the Letter of Credit Fees payable pursuant to paragraph
(c) above, the Borrower shall pay to the Issuing Lender for its own account
without sharing by the other Lenders the reasonable and customary charges from
time to time of the Issuing Lender with respect to the amendment, transfer,
administration, cancellation and conversion of, and drawings under, such Letters
of Credit (collectively, the "ISSUING LENDER FEES").
(f) All fees payable hereunder shall be paid on the dates due in
immediately available funds to the Administrative Agent (other than the fees to
be paid to CSCC pursuant to paragraph (c) above which shall be paid directly to
CSCC), in the case of fees payable to it and, in the case of fees payable to it
and to the Lenders, for distribution to the Lenders entitled thereto.
SECTION 2.11. INTEREST.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each LIBOR Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
(c) Notwithstanding the foregoing paragraphs (a) and (b) of this Section
2.11, if (i) any principal of or interest on any 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 or (ii) the Borrower fails to comply
with any covenant set forth in Article VI hereof and the Borrower has received
written notice from the Required Lenders stating that interest shall accrue as
provided in this Section 2.11(c), then, for as long as such non-compliance has
not been waived or cured, the principal of each outstanding Loan shall bear
interest, after as well as before judgment, in each case (with respect to
clauses (i) and (ii) above), at a rate per annum equal to two percent (2%) plus
the applicable interest rate set forth in such paragraph (a) and (b), as the
case may be, or, if no such interest rate is applicable or is then in effect,
then at a rate per annum equal to the Alternate Base Rate plus two percent (2%).
(d) All accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; PROVIDED that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any Repayment or prepayment of any Loan, accrued interest on the principal
amount of such Loan repaid or prepaid shall be payable on the date of such
Repayment or prepayment and (iii) in the event of any conversion of any Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366
56
days in a leap year), and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined in
accordance with this Agreement by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12 ALTERNATE RATE OF INTEREST.
If prior to the commencement of any Interest Period for a LIBOR Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by a majority in interest of the
Lenders participating in such Borrowing that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective and
(ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing shall
be made as an ABR Borrowing.
SECTION 2.13. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or LIBOR Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any LIBOR Loan (or of maintaining its
obligation to make any such Loan) or 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 additional costs incurred or
reduction suffered.
57
(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 capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the 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 and the basis therefor
shall be delivered to the Borrower by the applicable Lender (with a copy to the
Administrative Agent) and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 30 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 180 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 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
SECTION 2.14 BREAK FUNDING PAYMENTS.
In the event of (i) the payment of any principal of any LIBOR Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion of any LIBOR Loan other than
on the last day of the Interest Period applicable thereto, (iii) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto, or (iv) the assignment of any LIBOR Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.17, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any
58
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 Business Days after receipt
thereof.
SECTION 2.15. 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
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify 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
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 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 a copy of the 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) Each Foreign Lender shall deliver to the Borrower (with a copy to the
Administrative Agent) two copies of either United States Internal Revenue
Service Form W-8 BEN or Form W-8ECI, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Foreign Lender.
Such forms shall be delivered by each Foreign Lender on or before the date it
becomes a party to this Agreement or designates a new lending office. In
addition, each Foreign Lender shall deliver such forms promptly upon the
obsolescence, expiration or invalidity of any form previously delivered by such
Foreign Lender. Notwithstanding any other provision of this Section 2.15, a
Foreign Lender shall not be required
59
to deliver any form pursuant to this Section 2.15 that such Foreign Lender is
not legally able to deliver.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.15, it shall pay over
such refund to the Borrower (but only to the extent of indemnity payments made
by the Borrower under this Section 2.15 with respect to the Taxes giving rise to
such refund), net of all reasonable out-of-pocket expenses of the Administrative
Agent or such Lender directly attributable to such Tax or refund and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); PROVIDED, HOWEVER, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay
such refund to such Governmental Authority. Nothing contained in this Section
2.15 shall require the Administrative Agent or any Lender to make available its
tax returns (or any other information relating to its Taxes which it deems
confidential) to the Borrower or any other Person.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
(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 Sections 2.13, 2.14 or 2.15, or otherwise)
prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such 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
First Union National Bank, Charlotte, North Carolina, ABA no. ▇▇▇▇▇▇▇▇▇, account
no. ▇▇▇▇▇▇▇▇▇▇▇▇▇, phone no. (▇▇▇) ▇▇▇-▇▇▇▇ (or such other account as the
Administrative Agent shall from time to time specify by notice), except that
payments pursuant to Sections 2.10(c), 2.10(d), 2.13, 2.14, 2.15 and 9.03 shall
be made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such 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 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.
60
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this 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 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 set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless 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 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) Without limiting the generality of paragraph (a) above, the Borrower's
obligations to make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or otherwise)
shall be absolute and unconditional and shall not be subject to any delay,
reduction, set-off, counterclaim, defense or recoupment for any reason,
including any failure of any equipment or other assets constituting Vendor
Product or any part thereof, or any dispute with, breach of representation or
warranty by or claim against any supplier, manufacturer, installer, vendor or
distributor. The provisions of this paragraph and no payment hereunder shall be
deemed to be a waiver of any right or claim that the Borrower may have against a
vendor (including, without limitation, a Cisco Vendor or Lucent).
61
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.13, 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 2.15,
then, if requested by the Borrower, such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the reasonable judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, 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 made at the Borrower's request.
(b) If any Lender requests compensation under Section 2.13, 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 2.15,
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 Loans, and
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) such assignment will result in a 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.
SECTION 2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other indemnification obligations under this
Agreement, the Borrower hereby agrees to protect, indemnify, pay and save the
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit or
(ii) the failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions, herein called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
62
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply fully with conditions required in
order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors
in interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Issuing Lender,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith (and without gross negligence or
willful misconduct), shall not put the Issuing Lender under any resulting
liability to the Borrower. It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the Issuing
Lender against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower, including,
without limitation, any and all risks of the acts or omissions, whether rightful
or wrongful, of any Government Authority. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Lender.
(d) The obligations of the Borrower under this Section 2.18 shall survive
the termination of this Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under this
Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.18, the Borrower shall have no obligation to indemnify the Issuing Lender in
respect of any liability incurred by the Issuing Lender arising out of the gross
negligence or willful misconduct of the Issuing Lender (including action not
taken by the Issuing Lender), as determined by a court of competent
jurisdiction.
63
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS.
Each of the Parent, 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 company or corporate, as the case may be, power
and authority to carry on its business as now 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 are within each Loan Party's corporate powers and have
been duly authorized by all necessary corporate or company, as the case may be,
and, if required, stockholder or member, as the case may be, 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, any Governmental Authority,
except such as have been obtained or made and are in full force and effect and
except for filings necessary to perfect Liens created under the Security
Documents, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of any Loan Party or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument evidencing or governing any Material
Indebtedness or any other material indenture, agreement or other instrument
binding upon any Loan Party or its assets, or give rise to a right thereunder to
require any payment to be made by any Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party, except Liens
created under the Security Documents.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) Each of the Parent and the Borrower has heretofore furnished to the
Lenders its audited consolidated balance sheet and its related statements of
operations, stockholders' equity and cash flows as of December 31, 2000,
certified by a Financial Officer of such Person. Each
64
of the Parent and the Borrower has heretofore furnished to the Lenders its
unaudited consolidated balance sheet and related statements of operations and
cash flows as of March 31, 2001. Each of the foregoing financial statements
present fairly, in all material respects, the financial position and
capitalization of the Parent and its consolidated subsidiaries, and the Borrower
and its consolidated Subsidiaries, in each case as of such dates in accordance
with GAAP, (and with respect to the unaudited financial information for the
period ending March 31, 2001, subject to year end audit adjustments and the
absence of footnotes).
(b) The financial statements delivered to the Lenders pursuant to Sections
5.01(a), 5.01(b) and 5.01(c) have been prepared in accordance with GAAP (except
as may otherwise be permitted hereunder) consistently applied and present fairly
(on the basis disclosed in the footnotes to such financial statements delivered
pursuant to Section 5.01(a)) in all material respects the financial condition
and results of operations of the Parent and the Borrower and their respective
consolidated subsidiaries on a consolidated basis as of such date and for such
periods.
(c) Since December 31, 2000, there has been no material adverse change in
the business, condition (financial or otherwise), operations, performance or
properties of the Parent, the Borrower or the Subsidiaries.
SECTION 3.05. PROPERTIES; LIENS; LICENSES.
(a) On each date that this representation is made, each of the Loan
Parties has good title to, or valid leasehold interests in, all the real and
personal property material to its business as then constituted, except for
Permitted Encumbrances and minor defects in title that do not interfere with its
ability to conduct its business as proposed to be conducted during the term of
the Loans or to utilize such properties for their intended purposes, and none of
such property is subject to any Lien other than Permitted Encumbrances.
(b) The certificates, licenses and approvals identified on Schedule 3.05,
or the most recent update to Schedule 3.05 that the Borrower may include with a
Borrowing Request (the "LICENSES"), are all the certificates, licenses and
approvals that have been issued or provided to the Borrower or the Subsidiaries
by any Governmental Authority having jurisdiction over the telecommunications
business, and each such License is in full force and effect except as set forth
in Schedule 3.05 and has not been revoked, cancelled, suspended or modified in
an adverse way. The Borrower and each Subsidiary have all licenses and permits
that are material to the business of the Borrower and each Subsidiary (as
conducted on each date this representation is made). Each license or permit that
is material to the business of the Borrower and the Subsidiaries is valid and in
full force and effect, and the Borrower and each Subsidiary are in compliance in
all material respects with the terms and conditions thereof.
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 Parent,
the Borrower or any Subsidiary, threatened against or affecting the Parent, the
Borrower or any Subsidiary (i) as to which there is a reasonable possibility of
an adverse determination and that, if adversely
65
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 with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Parent, the Borrower or any Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
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.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS.
Each of the Parent, 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. True and correct
copies of all material agreements to which the Parent, the Borrower or any
Subsidiary is a party or by which any of them or their properties is bound have
been provided to special counsel to First Union.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS.
None of the Loan Parties 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 Loan Parties 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) Taxes that are being
contested in good faith by appropriate proceedings and for which the applicable
Loan Party has set aside on its books adequate reserves or (b) the filing of
local Tax returns and reports to the extent that the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.10. ERISA.
Each Plan has been administered in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. 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. The present
value of all accumulated benefit obligations under each Plan (based on the
66
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans.
SECTION 3.11. INTELLECTUAL PROPERTY.
The Borrower and each of its Subsidiaries owns, or is licensed to use, all
trademarks, trade names, copyrights, technology, patents, know-how, processes
and other intellectual property material to or necessary for the conduct of its
business as currently conducted and as proposed to be conducted except those as
to which the failure to own or license could not reasonably be expected to have
a Material Adverse Effect (the "INTELLECTUAL PROPERTY"). No claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or validity or effectiveness of any Intellectual Property,
nor does the Borrower know of any valid basis for any such claim, except for any
claim which, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect. The use of the Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person,
except for such infringements that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.12. FEDERAL REGULATIONS.
No part of the proceeds of any Loans will be used in any manner which
would result in a violation of Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
Following the application of proceeds of each Loan, no more than 10% of the
value of the assets of the Borrower, and no more than 10% of the value of the
consolidated assets of the Borrower and its Subsidiaries, will be "margin stock"
as defined in said Regulation U.
SECTION 3.13. DISCLOSURE.
The Parent and the Borrower have disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which any of the Loan Parties
is subject 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,
including any publicly available filings made by the Parent with the Securities
and Exchange Commission) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein in the light of
the circumstances under which they were made, not misleading; PROVIDED that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
67
SECTION 3.14. SUBSIDIARIES.
Schedule 3.14 sets forth as of the Second Amendment Effective Date the
name of, and the ownership interest of the Borrower in, each Subsidiary.
SECTION 3.15. INSURANCE.
Schedule 3.15 sets forth a description of all insurance maintained by or
on behalf of the Borrower and the Subsidiaries as of the Second Amendment
Effective Date. As of the Second Amendment Effective Date, all premiums in
respect of such insurance have been paid.
SECTION 3.16. LABOR MATTERS.
As of the Second Amendment Effective Date, there are no strikes, lockouts
or slowdowns against any Loan Party pending or, to the knowledge of the
Borrower, threatened. The hours worked by and payments made to employees of the
Loan Parties 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.
All payments due from any Loan Party, or for which any claim may be made against
any Loan Party, 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
applicable Loan Party. 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 any Loan Party is bound.
SECTION 3.17. AT&T AGREEMENT.
(i) AT&T has not delivered a notice of termination of the AT&T Agreement
prior to its expiration in accordance with its terms as in effect on the Second
Amendment Effective Date, (ii) AT&T has not failed to pay the amount due
pursuant to Section 10.2A of the AT&T Agreement for 30 days after the date when
due, (iii) AT&T is not in arrears for 45 days or more in payments due under the
AT&T Agreement in an aggregate amount of $10 million or more, (iv) AT&T has
neither repudiated its obligations under the AT&T Agreement nor refused to make
payments thereunder, and (v) the AT&T Agreement has not been terminated for any
reason prior to its expiration in accordance with its terms as in effect on the
Second Amendment Effective Date.
SECTION 3.18. SECURITY DOCUMENTS.
The representations and warranties in each Security Document are true and
correct, and each of the Security Documents creates, as of the Effective Date, a
valid, enforceable first priority perfected security interest on the Collateral
covered thereby, subject only, as to the priority of such security interests, to
statutory and tax Liens arising by operation of law that are necessarily prior
to the Liens of the Security Documents.
68
SECTION 3.19. CAPITALIZATION.
(a) As of the Second Amendment Effective Date, the authorized capital
stock of the Borrower consists of 100 shares of common stock, par value $0.01
per share, of which 100 shares are issued and outstanding and owned beneficially
and of record by the Parent. As of the Second Amendment Effective Date, the
authorized capital stock of the Parent consists of 400,000,000 shares of common
stock, par value $0.01 per share, 1,250,000 shares of Series A Preferred Stock,
par value $.01 per share and 2,000,000 shares of Series B Preferred Stock, par
value $.01 per share, of which (i) 80,000,000 shares of the common stock are
issued and outstanding, and a sufficient number of shares of common stock are
reserved for issuance upon the exercise or conversion of the warrants, options
and shares of Series A Preferred Stock and Series B Preferred Stock outstanding
on the Second Amendment Effective Date as are necessary to permit the exercise
or conversion of such warrants, options and shares, (ii) 1,250,000 shares of
Series A Preferred Stock are issued and outstanding and (iii) 2,000,000 shares
of Series B Preferred Stock are to be issued and outstanding pursuant to the
Cisco Subscription Agreement. All such outstanding shares of the Borrower and
the Parent are validly issued, fully paid and non assessable and were not issued
in violation of any preemptive or similar rights of any Person. Except as
described in the first two sentences of this Section 3.19, as of the Second
Amendment Effective Date, no other shares of capital stock of the Borrower or
the Parent are issued and outstanding or reserved for issuance. Except for the
Stockholders Agreement, as of the Second Amendment Effective Date, there are no
shareholders agreements, voting trusts, proxies or other agreements, commitments
or understandings of any character to which the Parent, the Borrower or any
Subsidiaries is a party or by which the Parent, the Borrower or any Subsidiary
is bound with respect to the voting of any shares of capital stock of the
Parent, the Borrower or any Subsidiaries.
(b) All Securities issued by the Parent, the Borrower or any Subsidiaries
have been offered, issued, sold and delivered, in compliance with, or pursuant
to exemptions from, the Securities Act, and the rules and regulations of the
Securities and Exchange Commission thereunder, and all other laws of any
jurisdiction, and the rules and regulations of any Governmental Authority,
applicable to the offering, issuance, sale or delivery of Securities.
SECTION 3.20. FISCAL YEAR.
The fiscal year applicable to Borrower and its consolidated Subsidiaries
begins on each January 1 and ends on each subsequent December 31.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE.
This Agreement became effective on October 29, 1999 upon the satisfaction
of the following conditions:
69
(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 or for the benefit of the Lenders, dated the Effective
Date and addressing such matters relating to the Loan Parties, the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request) of each of (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ and Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Parent and the
Borrower, in form and substance reasonably satisfactory to the Administrative
Agent, (ii) ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, special communications counsel
to the Parent and the Borrower, in form and substance reasonably satisfactory to
the Administrative Agent, and (iii) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special
counsel for Lucent, in form and substance reasonably satisfactory to the
Administrative Agent. The Parent and the Borrower hereby request their counsel
referred to in clauses (i) and (ii) of this paragraph 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 the Loan Parties,
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 satisfactory to the Administrative Agent and its counsel.
(d) The representations and warranties of the Loan Parties set forth in
the Loan Documents shall be true and correct in all respects (or, in the case of
any representation or warranty that is not qualified as to materiality, in all
material respects), no Default shall have occurred and be continuing, the
Borrower shall have performed all of its obligations and satisfied all
conditions required to be satisfied or performed, and the Supply Agreement shall
be in full force and effect, and the Borrower shall be in compliance therewith
in all material respects.
(e) The Administrative Agent and Lucent shall be satisfied that all fees
and other amounts due and payable to them hereunder and under the Fee Letter on
or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all expenses required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document, have been paid or will be paid from
the proceeds of a Borrowing to be made on the Effective Date.
(f) The Lenders shall be reasonably satisfied with the corporate and legal
structure and capitalization of the Parent, the Borrower and the Subsidiaries,
including the charter and by-laws of the Parent, the Borrower and each
Subsidiary and each agreement or instrument evidencing Indebtedness.
(g) The Administrative Agent shall have received (i) counterparts of the
Initial Guarantee signed on behalf of the Parent and each Subsidiary, and (ii)
counterparts of the Indemnity and Contribution Agreement signed on behalf of
each Loan Party.
70
(h) The Administrative Agent and the Collateral Trustee shall have
received (i) counterparts of each of the Security Documents signed on behalf of
the Loan Party that is a party thereto and (ii) evidence satisfactory to the
Required Lenders that 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 or
perfect the Liens intended to be created under the Security Documents, and to
protect the respective ownership interests of the Parent, the Borrower and the
Subsidiaries in (and the Liens of the Security Documents on) all Collateral,
have been so filed, registered or recorded.
(i) The Administrative Agent shall have received a completed Perfection
Certificate from the Borrower, dated the Effective Date and signed by a
Financial Officer of the Borrower together with all attachments contemplated
thereby, including (i) the results of a search of the Uniform Commercial Code
(or equivalent) filings made with respect to the Borrower in the jurisdictions
contemplated by the Perfection Certificate and (ii) copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by Section 6.02
or have been released.
(j) The Administrative Agent shall have received evidence satisfactory to
it that the insurance required by Section 5.07 is in effect and that the
Administrative Agent and the Collateral Trustee have been named as an additional
insured and loss payee under all insurance policies to be maintained with
respect to the properties of the Borrower constituting the Collateral.
(k) The Lenders shall have received the Business Plan and the Lenders
shall be satisfied with the Business Plan and there shall have been no material
adverse changes in the Business Plan compared to the information disclosed to
Lucent prior to the date of execution of this Agreement.
(l) The Lenders (i) shall have been given access to the management,
records, books of account, contracts and properties of the Loan Parties and
shall have received such financial, business and other information regarding the
Loan Parties as the Lenders shall have reasonably requested and (ii) shall have
completed their due diligence review of the Loan Parties and shall be reasonably
satisfied with the results of such review.
(m) The Administrative Agent shall have received evidence reasonably
satisfactory to it that the Subsidiaries hold all material governmental
approvals reasonably necessary to conduct their respective businesses.
(n) The Administrative Agent shall have received evidence satisfactory to
it that the Borrower is exercising reasonable commercial efforts to employ a
chief executive officer.
(o) The Borrower shall have delivered to the Administrative Agent evidence
satisfactory to the Lenders that the Parent has received cash pursuant to the
Bridge Loan Agreement and the Subscription Agreement of at least $100,000,000
and has contributed at least $96,400,000 as cash equity, to the Borrower.
71
(p) The Administrative Agent shall have received a certificate of the
Borrower attaching copies of the Subscription Agreement, the Bridge Loan
Agreement, the Tax Sharing Agreement, and all agreements and other documents
delivered in connection therewith, and certifying, as to each such agreement and
document, that (i) such copy is true and correct and (ii) in the case of any
such agreement, such agreement is in full force and effect.
(q) The Administrative Agent shall have received a certificate of the
Borrower to the effect that, as of the Effective Date, (i) the AT&T Agreement is
in full force and effect, (ii) the Borrower is in compliance in all respects
with the terms and conditions of the AT&T Agreement, (iii) the Borrower has not
taken any action which could result in the termination by AT&T for cause
pursuant to Section 29.11 of the AT&T Agreement, and (iv) none of the parties to
the AT&T Agreement is in default under or with respect to any obligation
thereunder which default could reasonably be expected to have a Material Adverse
Effect.
SECTION 4.02. EACH BORROWING.
The obligation of each Lender to make a Loan on the occasion of each
Borrowing is subject to the satisfaction of the following conditions:
(a) At the time of and immediately after giving effect to such Borrowing,
the representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all respects (or, in the case of any
representation or warranty that is not qualified as to materiality, in all
material respects) on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such Borrowing
no Default shall have occurred and be continuing.
(c) With respect to any Tranche A-1 Loan, at the time of and immediately
after giving effect to such Loan, the amount of such Tranche A-1 Loan shall not
exceed the sum of all amounts paid or payable in respect of the Purchase Price
due in respect of orders or purchases of any Vendor Product delivered at any
time during the twenty-four month period preceding the date of such Borrowing
and against which no Tranche A Loan has yet been made, and the proceeds of such
Tranche A-1 Loan shall be used in accordance with the requirements of Section
5.10; provided, it is understood and agreed that Vendor Product (i) that is
subject to a third party purchase money security interest will not create
availability under the Tranche A-1 Commitment pursuant to this Section 4.02(c)
("TRANCHE A-1 AVAILABILITY") unless the invoice with respect to such Vendor
Product will be paid in full with the proceeds of such Tranche A-1 Loan and such
security interest is released (whether by operation of law or otherwise) and
(ii) that has been purchased and paid for by the Borrower or any Subsidiary with
the proceeds from one or more Asset Sales of Vendor Product will not create
Tranche A-1 Availability to the extent the Vendor Product sold in the Asset Sale
previously created Tranche A-1 Availability.
(d) With respect to any Tranche A-2 Loan, at the time of and immediately
after giving effect to such Borrowing, the amount of such Tranche A-2 Loan shall
not exceed 25% of the Purchase Price of Vendor Product that was ordered or
purchased, against which no Tranche A Loan has yet been made, and the proceeds
of such Tranche A-2 Loan shall be used in accordance with the requirements of
Section 5.10; provided, it is understood and agreed that
72
Vendor Product (i) that is subject to a third party purchase money security
interest will not create availability under the Tranche A-2 Commitment pursuant
to this Section 4.02(d) ("TRANCHE A-2 AVAILABILITY") unless the invoice with
respect to such Vendor Product will be paid with the proceeds of a Tranche A
Loan and such security interest is released (whether by operation of law or
otherwise) and (ii) that has been purchased and paid for by the Borrower or any
Subsidiary with the proceeds from one or more Asset Sales of Vendor Product will
not create Tranche A-2 Availability to the extent the Vendor Product sold in the
Asset Sale previously created Tranche A-2 Availability.
(e) With respect to any Tranche A-3 Loan, at the time of and immediately
after giving effect to such Borrowing, the amount of such Tranche A-3 Loan shall
not exceed **** of the purchase price of Vendor Product that was ordered or
purchased, against which no Tranche A Loan has yet been made, and the proceeds
of such Tranche A-3 Loan shall be used in accordance with the requirements of
Section 5.10; PROVIDED, that (i) Vendor Product that is subject to a third party
purchase money security interest will not create availability under the Tranche
A-3 Commitment pursuant to this Section 4.02(e) ("TRANCHE A-3 AVAILABILITY")
unless the invoice with respect to such Vendor Product will be paid with the
proceeds of a Tranche A-3 Loan and such security interest is released (whether
by operation of law or otherwise); (ii) Vendor Product that has been purchased
and paid for by the Borrower or any Subsidiary with the proceeds from one or
more Asset Sales of Vendor Product will not create Tranche A-3 Availability to
the extent the Vendor Product sold in the Asset Sale previously created Tranche
A-3 Availability; and (iii) in the case of Tranche A-3 Loans funded by a CSCC
Lender, only Cisco Product delivered by a Cisco Vendor after the Second
Amendment Effective Date shall constitute Vendor Product (except as otherwise
set forth in the proviso in Section 5.10(c)). So long as any CSCC Lender holds
any Tranche A-3 Loans or any Tranche A-3 Commitments, clause (iii) of the
proviso of this Section 4.02(e) shall not be amended, modified or waived without
the prior written consent of CSCC.
(f) Solely with respect to Tranche A-1 Loans, the Vendor Product for which
the Purchase Price is to be paid with the proceeds of such Borrowing is intended
to be used in a Permitted UCC Jurisdiction. Solely with respect to the Tranche
A-3 Loans, the Vendor Product for which the purchase price is to be paid with
the proceeds of such Borrowing is intended to be used in a Permitted UCC
Jurisdiction.
(g) At the time of and immediately after giving effect to such Borrowing,
the Borrower shall have all necessary Real Estate Rights, and sufficient
financing, to build the Segment or portion thereof proposed to be built with the
proceeds of such Borrowing.
(h) Solely with respect to the Tranche A-3 Loans and only if a CSCC
Lender then holds any unfunded Tranche A-3 Commitment, at the time of and
immediately after giving effect to such Borrowing, either (i) the aggregate
outstanding principal amount of the Tranche A-1 Loans and Tranche A-2 Loans
shall be equal to or greater than the outstanding principal amount of the
Tranche A-3 Loans or (ii) ************ in Tranche A-1 Loans and ***********
in Tranche A-2 Loans shall have been funded or shall have been duly requested
by the Borrower and required to be funded under the provisions of this
Agreement. So long as any CSCC Lender
73
holds any Tranche A-3 Loans or any Tranche A-3 Commitments, this Section 4.02(h)
shall not be amended, modified or waived without the prior written consent of
CSCC.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in this Section
4.02.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of
and interest on each Loan and all fees and other amounts (other than contingent
or indemnity obligations which by their terms survive the termination of this
Agreement) payable hereunder shall have been paid in full and all LOC
Obligations shall have been terminated or reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Borrower will furnish to the Administrative Agent:
(a) within 90 days after the end of each fiscal year of each of the
Borrower and the Parent, the audited consolidated balance sheet of such Person
and its consolidated subsidiaries and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by Deloitte & Touche or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit, PROVIDED that prior to the Conversion Date such financials may include a
"development stage" qualification of the type stated in the August 31, 1999,
audited financials referred to in Section 3.04(a)) and certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of such Person and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of the first three fiscal quarters of
each fiscal year of each of the Borrower and the Parent, the unaudited
consolidated balance sheet of such Person and its consolidated subsidiaries and
related statements of operations and cash flows as of the end of and for such
calendar quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
such Person and its consolidated subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) within 30 days after the end of each calendar month, with respect to
the Borrower and the Parent, beginning March 2000, (i) the unaudited
consolidated balance sheet of such
74
Person and its consolidated subsidiaries and related statements of operations
and cash flows as of the end of and for such calendar month and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form,
beginning with the monthly statements delivered after March 31, 2001, the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, and with a comparison
to the Borrower's annual plan with respect to such calendar month and such
elapsed portion of the fiscal year, (ii) to the extent prepared for senior
management's review, a report illustrating in reasonable detail construction
progress as compared to the Borrower's current construction plan, (iii) copies
of the monthly permitting status report in detail reasonably acceptable to the
Administrative Agent, (iv) a schedule illustrating Tranche A-1 Availability,
Tranche A-2 Availability and Tranche A-3 Availability, (v) a summary (cumulative
from the Effective Date) of all invoices paid or payable that give rise to
Tranche A-1 Availability, Tranche A-2 Availability or Tranche A-3 Availability
(including, with respect to each invoice, a designation of the Class of Term
Loans with respect which such invoice has created or will create availability)
and copies of any such invoices requested by the Administrative Agent, (vi) a
report containing the amount (if any) of Net Proceeds from sales of Vendor
Product that was reinvested in Vendor Product during such month, (vii) an
updated version of Schedule 6.02(iv), (viii) (A) all written amendments, notices
of default, waivers or extensions of material deadlines with respect to the AT&T
Agreement and (B) notice of the occurrence of any Default, or any event or
occurrence that could reasonably be expected to result in a Default, pursuant to
Section 7.01(p), in each case certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of such Person and its consolidated subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes and as true and correct in all
material respects and (ix) a summary of accounts payable under all Vendor Supply
Agreements which shall include agings, the status of each account payable as
current or past due and as uncontested or contested (and if past due and
contested, an explanation of how such dispute is being resolved);
(d) concurrently with any delivery of the financial statements under
clause (a) and (b) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.01, 6.04, 6.06 and 6.13 through 6.19,
and (iii) stating whether any change in GAAP or in the application thereof that
materially affects the financial statements accompanying such certificate (it
being understood that any change that would affect compliance with any covenant
set forth herein or the Applicable Rate shall be considered material) has
occurred since the date of the Borrower's audited financial statements last
delivered pursuant to Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
75
(f) promptly after the same become available but in any event within 105
days after the end of each fiscal year of the Borrower, the Borrower's monthly
forecasts and Annual Business Plan for the current fiscal year;
(g) at any time during each fiscal year but in any event within eighteen
months after the date the last update was provided pursuant to this Section
5.01(g), an update of the Borrower's financial projections (in reasonable
detail) displaying the projected financial results of the Borrower and its
Subsidiaries for the period from the first day of the current fiscal year until
the first anniversary of the Maturity Date;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Parent, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
financial information or other material information distributed by the Parent or
the Borrower to either of their stockholders generally, as the case may be;
(i) promptly after the Borrower or any Subsidiary receives same, any
written notice from Lucent or any Cisco Vendor that an invoice is past due and
that Lucent or such Cisco Vendor intends to take action with respect thereto,
together with a letter addressed to the Administrative Agent from the Borrower
containing an explanation as to the reason such invoice is past due and the
actions the Borrower proposes to take with respect thereto;
(j) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent, the Borrower or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS.
(a) The Borrower will furnish to the Administrative Agent, the Collateral
Trustee and each Lender written notice of the following promptly upon obtaining
knowledge thereof:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Parent, the Borrower or, to Borrower's knowledge, any Affiliate
thereof that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect; and
(iii) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect, including that AT&T
Corp. has taken any of the actions specified in Section 7.01(p).
76
(b) The Borrower will furnish to the Administrative Agent and the
Collateral Trustee written notice of the occurrence of any Prepayment Event
promptly after the occurrence of such event.
(c) Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03. INFORMATION REGARDING COLLATERAL.
The Borrower will furnish to the Administrative Agent and the Collateral
Trustee prompt written notice of any change (i) in corporate name of the Parent,
the Borrower or any Subsidiary or in any trade name used to identify any such
Person in the conduct of its business or in the ownership of its properties,
(ii) in the location of the chief executive office of the Parent, the Borrower
or any Subsidiary, its principal place of business or any asset constituting
Collateral (other than the installation of any asset constituting Collateral in
a jurisdiction in which all Uniform Commercial Code financing statements
(including fixture filings, if applicable) and other appropriate filings,
recordings or registrations (other than mortgages or similar instruments in
respect of real property) containing a description of the Collateral have been
filed of record in each governmental, municipal or other appropriate office in
such jurisdiction to the extent necessary to perfect the security interests
under the Security Documents), (iii) in the identity, jurisdiction of
organization or corporate structure of the Parent, the Borrower or any
Subsidiary, (iv) in the Federal Taxpayer Identification Number of the Parent,
the Borrower or any Subsidiary, (v) in the name and location of any Person other
than a Loan Party that has acquired possession of any material portion of the
Collateral; (vi) in the bank accounts, securities accounts, or similar accounts
maintained by a Loan Party; or (vii) resulting from the creation or acquisition
of any Subsidiary by any Loan Party. 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 Collateral Trustee to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral
(except for items of Collateral released from Liens in favor of the Collateral
Trustee as permitted by Section 6.02(iv)(E)). The Administrative Agent may, and
at the request of any Lender the Administrative Agent shall, periodically
request that the Borrower update the information provided above and the Borrower
agrees to provide such update promptly after any such request.
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS.
The Borrower will, and will cause each of the Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of the business of the Borrower and the
Subsidiaries, taken as a whole; PROVIDED that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
77
SECTION 5.05. PAYMENT OF OBLIGATIONS.
The Borrower will, and will cause each of the Subsidiaries to, pay its
Indebtedness and other obligations, including Tax liabilities, before the same
shall become delinquent or in default, except where (i) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (ii) the
Parent, the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (iii) such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and (iv) the failure to make payment
pending the resolution of such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. MAINTENANCE OF PROPERTIES.
The Borrower will, and will cause each of the Subsidiaries to, keep and
maintain all Collateral, and all other property material to the conduct of the
business of the Parent, the Borrower and the Subsidiaries, taken as a whole, in
good working order and condition, ordinary wear and tear excepted; PROVIDED that
this Section 5.06 shall not prevent sales permitted under Sections 6.03 and
6.04.
SECTION 5.07. INSURANCE.
(a) The Borrower will, and will cause each of the Subsidiaries to,
maintain, with financially sound and reputable insurance companies with AM
Best's rating of A minus (A-) or better, All-Risk property insurance for the
replacement value of all property and other insurance, including public
liability insurance against claims for personal injury, death or property damage
occurring upon, about or in connection with the use of any properties owned,
occupied or controlled by it as well as such other insurance as may be required
by law.
(b) All policies of All-Risk property insurance maintained by or for the
benefit of the Borrower with respect to the Collateral shall be (i) maintained
in an amount not less than the replacement value of all property thereof, with
deductibles or self insured retention not exceeding $250,000, and (ii) endorsed
or otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement, in favor of and satisfactory to the Administrative Agent, which
endorsement shall provide that the insurance carrier shall pay all proceeds
otherwise payable to any Loan Party under such policies directly to the
Collateral Trustee. All such policies also shall provide that none of the
Borrower, the Administrative Agent, the Collateral Trustee nor any other party
shall be a coinsurer thereunder and shall contain a "Replacement Cost
Endorsement," without any deduction for depreciation, "mortgagee's
interest"/"breach of warranty coverage" and such other provisions as the
Administrative Agent or the Collateral Trustee may reasonably require from time
to time to protect the interests of the Lenders. Each such policy also shall
provide that it shall not be canceled (i) by reason of nonpayment of premium
except upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent (giving the Administrative Agent and the Collateral
Trustee the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon not less than 30 days' prior written notice thereof by
the insurer to the Administrative Agent and the Collateral Trustee. The Borrower
shall deliver to the Administrative Agent and the
78
Collateral Trustee, upon not less than 30 days' prior written notice of the
cancellation, modification or non-renewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent and the Collateral
Trustee) together with evidence satisfactory to the Administrative Agent and the
Collateral Trustee of payment of the premium therefor.
(c) The Borrower will notify the Administrative Agent and the Collateral
Trustee immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section is taken out by any Loan Party, and shall promptly deliver to the
Administrative Agent and the Collateral Trustee a duplicate original copy of
such policy or policies.
SECTION 5.08. BOOKS AND RECORDS; INSPECTION RIGHTS.
The Borrower will, and will cause each of the Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made of
all material dealings and transactions in relation to their business and
activities. The Borrower will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
at the Administrative Agent's or Lender's expense (unless an Event of Default
has occurred and is continuing, in which case at Borrower's expense) upon
reasonable prior notice, to visit and inspect its properties (PROVIDED that,
except upon the occurrence and during the continuation of a Default, such
inspections will not take place more than once each calendar month) to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers, independent accountants, performance
bond insurers and contractors, all at such reasonable times and as often as
reasonably requested; provided, however, so long as no Default shall have
occurred and be continuing, any discussions with performance bond insurers and
contractors shall be (at the Borrower's option) in the presence of the
Borrower's representatives and shall be regarding matters relevant to the
successful completion of the Network. Any such inspection shall be subject to
the confidentiality restrictions set forth in Section 9.12.
SECTION 5.09. COMPLIANCE WITH LAWS AND AGREEMENTS.
The Borrower will, and will cause each of the Subsidiaries to, comply with
all laws, rules, regulations and orders of any Governmental Authority (including
ERISA and all Environmental Laws) 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.
SECTION 5.10. USE OF PROCEEDS.
(a) The Borrower will, and will cause each of the Subsidiaries to, use the
proceeds of Tranche A-1 Loans in an amount not to exceed $160,000,000 solely (i)
to make payments of the Purchase Price, and (ii) to reimburse the Borrower and
the Subsidiaries for amounts previously paid in respect of the Purchase Price
with other funds; PROVIDED, HOWEVER, until all Tranche A-3 Commitments have been
fully drawn, no proceeds of the Tranche A-1 Loans shall be used (A) to
79
purchase Cisco Product or to reimburse the Borrower or any of its Subsidiaries
for amounts previously paid to purchase Cisco Product or (B) to pay fees and
expenses due and payable pursuant to the Tranche A-3 Fee Letter.
(b) The Borrower will, and will cause the Subsidiaries to, use the
proceeds of Tranche A-2 Loans and Revolving Loans solely to make payments of
Permitted Expenses; PROVIDED, HOWEVER, until all Tranche A-3 Commitments have
been fully drawn, no proceeds of the Tranche A-2 Loans and Revolving Loans shall
be used (A) to purchase Cisco Product or to reimburse the Borrower or any of its
Subsidiaries for amounts previously paid to purchase Cisco Product or (B) to pay
fees and expenses due and payable pursuant to the Tranche A-3 Fee Letter.
(c) The Borrower will, and will cause the Subsidiaries to, use the
proceeds of Tranche A-3 Loans solely (i) to make payments of the purchase
price of the Vendor Product or (ii) to reimburse the Borrower and the
Subsidiaries for amounts previously paid in respect of the purchase price of
Vendor Product with other funds; PROVIDED, HOWEVER, that as long as any CSCC
Lender holds any portion of the Tranche A-3 Commitment the proceeds of
Tranche A-3 Loans made by any CSCC Lender will be used solely to pay the
purchase price for Cisco Products delivered by a Cisco Vendor after the
Second Amendment Effective Date except that, upon at least ten Business Days'
prior written notice to CSCC, the proceeds of Tranche A-3 Loans funded on or
prior to the nine-month anniversary of the Second Amendment Effective Date
may be used to reimburse the Borrower and the Subsidiaries for payments
previously made in respect of the purchase price for Cisco Products delivered
by a Cisco Vendor after March 31, 2001; PROVIDED, FURTHER, that the maximum
amount of reimbursement for any such payments made during the period from
March 31, 2001 to the Second Amendment Effective Date shall be limited to
***********. The proviso in Section 5.10(c) shall not be amended, modified or
waived without the prior written consent of CSCC.
SECTION 5.11. FURTHER ASSURANCES.
The Borrower will, and will cause each other 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, fixture filings and other documents), which may be required under
any applicable law, or which the Administrative Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Borrower. The Borrower also agrees to
provide to the Administrative Agent and the Collateral Trustee, upon request,
evidence reasonably satisfactory to the Administrative Agent or the Collateral
Trustee, as the case may be, as to the perfection and priority of the Liens
created or intended to be created by the Security Documents.
SECTION 5.12. CASUALTY AND CONDEMNATION.
(a) The Borrower will furnish to the Administrative Agent and the
Collateral Trustee and the Lenders prompt notice of any casualty or other damage
to any portion of the Collateral having a value in excess of $100,000 or the
commencement of any action or proceeding for the
80
taking of any Collateral or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section results in Net
Proceeds (whether in the form of insurance proceeds, condemnation award or
otherwise), the Collateral Trustee is authorized to collect such Net Proceeds
and, if received by the Parent, the Borrower or any Subsidiary, such Net
Proceeds shall be paid over to the Collateral Trustee. All such Net Proceeds
retained by or paid over to the Collateral Trustee shall be held by the
Collateral Trustee and released from time to time to pay the costs of repairing,
restoring or replacing the affected property, or reinvesting such Net Proceeds
in the Network, in each case in accordance with the terms of this Agreement and
the applicable provisions of the Security Documents, subject to the provisions
of the Security Documents regarding application of such Net Proceeds during a
Default.
(c) If any Net Proceeds retained by or paid over to the Collateral Trustee
as provided above continue to be held by the Collateral Trustee on the date that
any prepayment is due pursuant to Section 2.09(b) in respect of the event
resulting in such Net Proceeds, then such Net Proceeds shall be applied to
prepay Borrowings as provided in Section 2.09(b).
SECTION 5.13. INTEREST RATE PROTECTION.
The Borrower will from time to time enter into and maintain in effect one
or more Hedging Agreements the effect of which shall be to fix or limit the
interest cost to the Borrower and the Subsidiaries with respect to such portion
of the Loans as shall be necessary in order that, at all times at least 50% of
the aggregate amount of Consolidated Indebtedness and Permitted Parent Debt
shall be comprised of: (a) Indebtedness bearing interest at a fixed rate; (b)
Indebtedness covered by such Hedging Agreements; or (c) a combination of fixed
rate and hedged Indebtedness.
SECTION 5.14. ADDITIONAL SUBSIDIARIES; ADDITIONAL SECURITY DOCUMENTS.
(a) If any Subsidiary is formed or acquired after the Effective Date, the
Borrower will notify the Administrative Agent and the Lenders thereof and will
cause such Subsidiary to become a party to an Additional Guarantee and the
Indemnity and Contribution Agreement promptly, and in any event within five
Business Days, thereafter. At the time of such formation or acquisition, the
Borrower or the Parent (i) will cause such Subsidiary to enter into such
Additional Security Documents in favor of the Collateral Trustee, in form and
substance satisfactory to the Required Lenders, to obtain all necessary
consents, and to take all other actions, in each case as necessary or
appropriate to create and perfect Liens upon the assets of such Subsidiary that
would be subject to the Initial Security Documents if owned by a Subsidiary
party thereto or in the case of a Services Subsidiary, if owned by ▇▇.▇▇▇
Services, (ii) will cause legal counsel to deliver opinions as to the
enforceability of such Security Documents, the creation and perfection of Liens
thereunder, and such other matters as the Collateral Trustee and the
Administrative Agent reasonably may request, (iii) cause any Persons other than
the Borrower that owns or will acquire any equity interest in such Subsidiary to
enter into a pledge agreement in favor of the Collateral Trustee, in form and
substance reasonably satisfactory to the
81
Administrative Agent, to obtain all necessary consents, and to take all other
actions, in each case as necessary or appropriate to create and perfect Liens
upon such equity interest, and (iv) will take, or cause such Person and its
officers to take, such other actions as the Collateral Trustee or the
Administrative Agent reasonably may require in connection therewith.
(b) Before any tangible Collateral (other than conduit and fiber) having a
value in excess of $100,000, in the aggregate, is installed in any location or
locations as to which AT&T Corp. or Touch America, Inc. has a possessory
interest or has granted the Borrower or a Subsidiary a right of possession or
use, the Borrower shall cause AT&T Corp. or Touch America, Inc., as the case may
be, to execute and deliver to the Administrative Agent a Collateral Access
Agreement in form and content mutually satisfactory to the Borrower and the
Administrative Agent.
(c) Whenever any tangible Collateral (other than conduit and fiber) having
a value in excess of $100,000 is installed in any specific location in which any
Person other than a Loan Party, AT&T Corp. or Touch America, Inc. has a
possessory interest or has granted the Borrower or a Subsidiary a right of
possession or use, the Borrower shall use, or cause a Subsidiary to use,
commercially reasonable efforts (including a written request, a written
follow-up request and at least one telephone call) to obtain and deliver to the
Administrative Agent a Collateral Access Agreement in form and content mutually
satisfactory to the Borrower and the Administrative Agent, executed by such
Person. The Borrower shall not be required to offer any payments or other
consideration or concessions to any such Person.
SECTION 5.15. SPECIAL PURPOSE SUBSIDIARIES.
(a) The Borrower will maintain the corporate existence of a Subsidiary
(such Subsidiary, "▇▇.▇▇▇ PROPERTY") the sole business purpose of which will be
to own all of the fee and leasehold interests in and to land and improvements
and Fixtures on owned or leased land (all such interests and rights, the "REAL
ESTATE RIGHTS"), except for the Excluded Real Estate Rights.
(b) The Borrower will maintain the corporate existence of a Subsidiary
(such Subsidiary, "▇▇.▇▇▇ SERVICES") the sole business purpose of which will be
(i) to own all of the interests in and to rights of way, easements, licenses and
other rights and interests with respect to real property and Dedicated Conduit
other than the Real Estate Rights and all certificates, licenses and approvals
of any Governmental Authority (other than certificates, licenses and approvals
acquired by the Borrower or a Subsidiary other than ▇▇.▇▇▇ Services that are (A)
required to operate the business of the Borrower or such Subsidiary in the
ordinary course of business, (B) not essential to the operation of the Network
and (C) permitted pursuant to the terms of the Loan Documents), in each case
required for the acquisition, construction and operation of the Network
(collectively, the "ROW/LICENSE RIGHTS"), except to the extent any such rights
are held by a Services Subsidiary, (ii) to own leasehold interests or other
rights to use in (but not direct ownership of) fiber, equipment and other
personal property (not constituting Dedicated Conduit) owned by the Borrower or
any Subsidiary (other than a Special Purpose Subsidiary) necessary or desirable
to provide services to customers of the Network, (iii) to contract with and
provide services to customers of the Network, maintain and operate the
82
Network, contract for and provide lit fiber services and engage in other
activities related thereto and (iv) to own 100% of the equity interests in any
other Subsidiary the sole business purpose of which will be the same in scope as
described in the foregoing clauses (i), (ii) and (iii), but with respect only to
a portion of the Network (a "SERVICES SUBSIDIARY").
SECTION 5.16. ACCOUNT CONTROL AGREEMENTS.
Upon request by the Administrative Agent, the Borrower shall, and shall
cause each Subsidiary to, execute and deliver to any securities intermediary or
other Person any entitlement order, account control agreement or other notice,
document or instrument which the Administrative Agent may reasonably deem
necessary or advisable to enable the Collateral Trustee to perfect and ensure
priority by control of its security interest in Collateral consisting of
Investment Property (as defined in the New York Uniform Commercial Code), but
without granting the Collateral Trustee or Administrative Agent the power to
withdraw or otherwise exercise dominion over such Collateral at any time when no
Event of Default has occurred and is continuing.
SECTION 5.17 WHOLLY-OWNED SUBSIDIARIES.
The Borrower shall cause all of the Subsidiaries to be Wholly-Owned
Subsidiaries of the Borrower.
SECTION 5.18 OPERATING AND DEPOSIT ACCOUNTS.
The Borrower shall at all times maintain each of its operating and deposit
accounts (other than collection and disbursement accounts with an aggregate
balance not exceeding $1,000,000) with a Lender that holds a Revolving
Commitment, Tranche A-1 Commitment and/or a Tranche A-2 Commitment.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees and other amounts (other than contingent or
indemnity obligations which by their terms survive the termination of this
Agreement) payable hereunder have been paid in full and all LOC Obligations
shall have been terminated or reimbursed, each of the Parent and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. INDEBTEDNESS.
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents, including any
increase permitted by Section 2.06(f);
83
(ii) subject to Section 6.04, Indebtedness of the Borrower to any
Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary;
(iii) Indebtedness of the Borrower or any Subsidiary outstanding on
the Effective Date and set forth on Schedule 6.01 or relating to a Lien
described in clause (iii) of Section 6.02;
(iv) Indebtedness of the Borrower or any Subsidiary (other than a
Special Purpose Subsidiary) incurred after the Effective Date to finance
the acquisition, construction or improvement of any equipment, inventory,
real property or other assets (other than rights of way, easements,
licenses, conduit and intellectual property), including Capital Lease
Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof; PROVIDED that any such Indebtedness (A)
is incurred prior to or within 90 days after such acquisition or the
completion of such improvement or construction, as the case may be, (B)
that is incurred in connection with any particular acquisition,
improvement or construction does not exceed the cost of such acquisition,
improvement or construction, and (C) may be secured only by the assets
being financed thereby (and proceeds thereof); PROVIDED, FURTHER, that the
aggregate principal amount of all outstanding Indebtedness incurred in
reliance on this clause (iv) (including Indebtedness incurred pursuant to
clause (v) below to refinance Indebtedness originally incurred pursuant to
this clause (iv) and successive financings thereof) shall not exceed the
Purchase Money Debt Limit at any time;
(v) Indebtedness of the Borrower incurred to refinance any
Indebtedness referred to in clause (iii) or (iv) above or this clause (v)
and Indebtedness of any Subsidiary incurred to refinance any Indebtedness
of such Subsidiary referred to in clause (iii) or (iv) above or this
clause (v); PROVIDED that (A) the principal amount of any such
Indebtedness shall not exceed the principal amount of, plus accrued
interest and any prepayment premiums applicable to, the Indebtedness
refinanced thereby, (B) any such Indebtedness shall have a scheduled
maturity date that is on or after the scheduled maturity date of the
Indebtedness refinanced thereby, (C) any such Indebtedness shall have a
weighted average life to maturity that is equal to or longer than the
remaining weighted average life to maturity of the Indebtedness refinanced
thereby (determined immediately prior to giving effect to such
refinancing), (D) any such Indebtedness shall not include any provisions
that may require mandatory Repayment thereof prior to scheduled maturity,
other than scheduled Repayments taken into account in determining
compliance with clause (C) above and other provisions that are not
materially more burdensome than any such provisions included in the
Indebtedness refinanced thereby, and (E) any Indebtedness described in
this clause (v) shall not be secured by any Lien other than Liens on
assets securing the Indebtedness being refinanced thereby and shall not be
guaranteed by any Subsidiary other than any Subsidiary that guaranteed the
Indebtedness being refinanced;
(vi) Unsecured Indebtedness of the Borrower that has a weighted
average life to maturity and final maturity equal to or longer than the
Tranche A-1 Term Loan and the
84
Tranche A-2 Term Loan and does not exceed $50,000,000 in the aggregate;
and other unsecured Indebtedness of the Borrower and its Subsidiaries
(other than the Special Purpose Subsidiaries) not to exceed $5,000,000 in
the aggregate at any time outstanding;
(vii) Guaranty Obligations by the Borrower or any of its
Subsidiaries (other than the Special Purpose Subsidiaries) of Indebtedness
or other obligations of the Borrower or any of its Subsidiaries so long as
such Indebtedness is permitted pursuant to the terms of this Agreement;
(viii) Unsecured intercompany Indebtedness among the Borrower and
its Subsidiaries, PROVIDED that any such Indebtedness shall be (A) fully
subordinated to the Obligations hereunder on terms reasonably satisfactory
to the Administrative Agent and (B) evidenced by promissory notes which
shall be pledged to Collateral Trustee to secure the Obligations;
(ix) amounts invoiced and currently payable for Vendor Product
delivered or to be delivered under a Vendor Supply Agreement that are more
than 60 days past due, in an aggregate amount not to exceed **********
(other than amounts that are the subject of a bona fide dispute).
SECTION 6.02. LIENS.
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(i) Liens created under the Security Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Parent, the Borrower
or any Subsidiary existing on the Effective Date and set forth in Schedule
6.02; PROVIDED that (A) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (B) such Lien shall secure
only those obligations which it secures on the Effective Date;
(iv) Liens on equipment, inventory, real property or other assets
(other than rights of way, easements, licenses, conduit and intellectual
property) acquired, constructed or improved by the Borrower or a
Subsidiary (other than a Special Purpose Subsidiary); PROVIDED that (A)
such Liens secure only Indebtedness permitted by clause (iv) of Section
6.01 or a refinancing thereof permitted by clause (v) of Section 6.01, (B)
such Liens and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition, construction or improvement of such
equipment, inventory, real property or other assets, (C) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such equipment, inventory, real property
85
or other assets, (D) such Liens shall not apply to any other property or
assets of the Borrower or any Subsidiary and (E) to the extent that the
Borrower requests that the Collateral Trustee terminate its Liens with
respect to any property subject to a Purchase Money Lien and proceeds
thereof, such terminations shall only be with respect to the property (and
proceeds thereof) set forth on Schedule 6.02(iv) hereto as the same may be
updated from time to time pursuant to Section 5.01(c) by the submission of
a certificate of a Responsible Officer identifying the property so
financed, the terms of such financing and the duration of such agreement,
it being expressly understood and agreed that (x) neither the Borrower nor
any Subsidiary shall grant a security interest with respect to such
property and the proceeds thereof to any Person other than the holder of
the Purchase Money Lien and (y) upon the payment in full of the
Indebtedness permitted by clause (iv) of Section 6.01 that is secured by
such Purchase Money Lien, the Borrower shall promptly, but in any event
within 5 Business Days of such event, notify the Administrative Agent
thereof and execute any and all documentation required by the
Administrative Agent and/or the Collateral Trustee to reinstate the Lien
of the Collateral Trustee with respect to such property and the proceeds
thereof, confirm the release of such Purchase Money Lien and terminate all
financing statements filed in respect thereof; and
(v) Liens on Vendor Product pursuant to the terms of the applicable
Vendor Supply Agreement or other agreement for the supply of Vendor
Product; PROVIDED that (A) such Liens secure only amounts invoiced and
currently payable for Vendor Product delivered or to be delivered under a
Vendor Supply Agreement, on an invoice-by-invoice basis, (B) the amount of
liabilities secured by a Lien on Vendor Product covered by any particular
invoice shall consist solely of the unpaid purchase price due the vendor
providing such Vendor Product, as set forth in such invoice, (C) such
Liens do not at any time encumber any property other than Vendor Product
for which the vendor providing such Vendor Product has not received (on an
invoice-by-invoice basis) payment in full, (D) such Liens shall be
released as to Vendor Product covered by any particular invoice when the
purchase price set forth in such invoice is paid in full to the vendor
providing such Vendor Product and (E) such Liens shall not include Liens
securing the Cisco Purchase Commitment.
SECTION 6.03. FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
its assets, or all or substantially all of the stock of any of its Subsidiaries
(in each case, whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) the Borrower
may merge with or into any other Person so long as the Borrower is the surviving
entity and remains a wholly-owned subsidiary of the Parent, (ii) subject to
Section 6.12, any Subsidiary may merge with or into any other wholly-owned
Subsidiary in a transaction in which the surviving entity is a Subsidiary and
any Subsidiary may merge with or into Borrower in a transaction in which the
Borrower is the surviving entity, (iii) subject to
86
Section 6.12, any Subsidiary may sell, transfer, lease or otherwise dispose of
its assets to the Borrower or to another wholly-owned Subsidiary, and the
Borrower may sell, transfer, lease or otherwise dispose of its assets to any
wholly-owned Subsidiary, and (iv) any Subsidiary may liquidate or dissolve if
the Borrower determines in good faith that such liquidation or dissolution is in
its best interests and is not disadvantageous to the Lenders.
(b) The Borrower will not, and will not permit any Subsidiary to, engage
to any material extent in any business other than a Qualifying Business and any
businesses incidental, related or ancillary to, or which are entered into as a
means of facilitating or enhancing, any of the foregoing.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; ASSET SALES.
(a) The Borrower will not, and will not permit any Subsidiary to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly-owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(i) Permitted Investments;
(ii) investments by the Borrower in the capital stock of the
Subsidiaries and investments by any Subsidiary (other than a Special
Purpose Subsidiary) in the capital stock of other Subsidiaries; PROVIDED
that ▇▇.▇▇▇ Services may invest in the capital stock of any Services
Subsidiary;
(iii) loans, advances or guarantees made by the Borrower to any
Subsidiary or made by any Subsidiary to the Borrower or any other
Subsidiary; PROVIDED that any such Indebtedness shall be subordinated to
the Obligations pursuant to the Guarantees;
(iv) (A) payroll, travel and similar advances made in the ordinary
course of business that are expected at the time such advances are made
ultimately to be treated as expenses in accordance with GAAP and (B) so
long as no Default has occurred and is continuing, other loans and
advances by the Borrower or any Subsidiary to its respective directors,
officers or employees (I) in an aggregate principal amount not exceeding
$500,000 in the aggregate at any one time outstanding in each fiscal year,
(II) in the ordinary course of business, not exceeding $4,000,000 in the
aggregate at any one time outstanding in each fiscal year for relocation
costs, (III) to purchase or otherwise acquire capital stock of the Parent
or options or warrants for the issuance of capital stock of the Parent;
PROVIDED that the aggregate amount so invested under this clause (III)
during any fiscal year of the Borrower, together with all amounts paid by
the Parent to pay Permitted Parent Liabilities of the type described in
clause (iv) of the definition of "Permitted
87
Parent Liabilities", shall not exceed (x) $3,000,000 PLUS the amount
carried forward from the immediately preceding fiscal year PLUS (y) net
cash proceeds received since the Effective Date from the issuance of
equity interests of the Parent to directors, officers and employees and
(iv) with respect to the hiring of key employees of the Borrower, loans
and/or bonus payments to such key employees in an aggregate amount not to
exceed $10,000,000 during the term of this Agreement;
(v) guarantees by the Borrower or any Subsidiary (other than the
Special Purpose Subsidiaries) of any obligations arising in the ordinary
course of any other Subsidiary or of the Borrower;
(vi) guarantees by the Borrower or any Subsidiary (other than the
Special Purpose Subsidiaries) of any obligations arising out of, or in
connection with, the Cisco Supply Agreement;
(vii) investments existing on the Effective Date and set forth on
Schedule 6.04; and
(viii) the Guarantees.
(b) The Borrower will not, and will not permit any Subsidiary to, make an
Asset Sale or other disposition of the assets or property of the Borrower or any
Subsidiary, nor will the Borrower issue (other than to the Parent), or permit
any Subsidiary to issue (other than to the Borrower or a wholly-owned
Subsidiary), any additional shares of its capital stock or other ownership
interest, except:
(i) sales of Permitted Investments in the ordinary course of
business;
(ii) transfers constituting investments permitted by paragraph (a)
of this Section 6.04 or Restricted Payments permitted by Section 6.06;
(iii) subject to Section 6.12, sales, transfers and dispositions to
the Borrower or a Subsidiary;
(iv) sales, transfers and dispositions of obsolete, uneconomic or
surplus assets made when no Default has occurred and is continuing;
(v) Dark Fiber/Conduit Dispositions, so long as the Borrower
complies with the requirements of Section 2.09, and so long as, after
giving effect to such disposition, the Borrower would retain at least 24
fiber optic strands per route mile on each Segment or at least 12 fiber
optic strands and one empty conduit per route mile on each Segment (in
each case, only if such Segment is a Segment of the original 6400 miles of
the Network that was constructed by the Borrower);
(vi) Fiber Swaps, so long as the Borrower complies with the
requirements of Section 2.09;
88
(vii) Asset Sales, including sales of Segments, so long as the
Borrower complies with the requirements of Section 2.09;
(viii) transfers of assets to AT&T Corp. pursuant to the AT&T
Agreement as in effect on May 24, 2001, or as amended with the consent of
the Administrative Agent if such consent is required pursuant to Section
6.11; and
(ix) sales, leases, conveyances and other dispositions of assets and
rights in the ordinary course of business.
PROVIDED that (A) all sales, transfers, leases and other dispositions permitted
hereby (other than pursuant to clause (iii) above) shall be made for fair value
and for consideration that is at least 75% cash, or, in the case of Fiber Swaps,
for consideration that is fiber optic strands, conduit and, to the extent of
other consideration, at least 75% cash; (B) all Dark Fiber/Conduit Dispositions
pursuant to clause (v) above shall be made in accordance with the requirements
set forth in the Side Letter, to the extent then applicable; (C) neither the
Borrower nor any Subsidiary shall transfer to the Parent any assets used or
purchased for use in the operation of the Network; and (D) neither the Borrower
nor any Subsidiary principally located or organized within the United States
shall make loans to, make other investments in, or transfer assets held in the
United States to, any Subsidiary principally located or organized in any country
other than the United States, if the transaction would cause Total U.S. Assets
to be less than 75% of Consolidated Total Assets. (The foregoing shall not limit
in any respect the obligations of the Borrower in respect of the creation,
perfection and priority of the Collateral Trustee's security interests in the
Collateral.) As used in this Section, "Consolidated Total Assets" means, as of
any date of determination, the total tangible assets of the Borrower and its
Subsidiaries on a consolidated basis, determined in accordance with GAAP; and
"Total U.S. Assets" means Consolidated Total Assets MINUS that portion of such
tangible assets that (without double-counting) are (i) located outside the
United States, (ii) are located within the United States but are owned by
consolidated Subsidiaries not principally located or organized in the United
States, and (iii) loans to and other investments in any Person that is not
principally located or organized in the United States, other than a consolidated
Subsidiary. For purposes of the foregoing proviso and definitions, the United
States shall include Puerto Rico and all other territories or possessions of the
United States.
SECTION 6.05. HEDGING AGREEMENTS.
The Borrower will not, and will not permit any Subsidiary to, enter into
any Hedging Agreement, other than Hedging Agreements required by Section 5.13
and other Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
89
SECTION 6.06. RESTRICTED PAYMENTS.
The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except: (i) the Borrower may make Restricted Payments to the Parent in
additional shares of its common stock or Permitted Preferred Stock (including
options, warrants and other rights to purchase shares of such common stock or
Permitted Preferred Stock); (ii) the Borrower may make Restricted Payments to
any Subsidiary which has executed the Initial Guarantee or an Additional
Guarantee, and each Subsidiary may make Restricted Payments to the Borrower or
to any other Subsidiary which has executed the Initial Guarantee or an
Additional Guarantee; (iii) the Borrower may make dividends and distributions in
respect of its common stock or Permitted Preferred Stock in cash at such times
and in such amounts as shall be necessary to permit the Parent to pay Permitted
Parent Expenses when due and to permit the Borrower to comply with its
obligations under the Tax Sharing Agreement; (iv) until the date that is 30
months after the Effective Date, so long as no Default under Section 7.01(a),
(b), (h), (i) or (j) has occurred and is continuing, the Borrower may make cash
dividends in respect of its common stock or Permitted Preferred Stock at such
times and in such amounts as shall be necessary to permit the Parent to pay
Permitted Parent Liabilities (other than Permitted Parent Liabilities described
in clause (iv) of the definition thereof) when due and to permit the Parent to
fund any Permitted Interest Fund; (v) on and after the date that is 30 months
after the Effective Date, so long as (A) no Default under Section 7.01(a), (b),
(h), (i) or (j) has occurred and is continuing and (B) no Blockage Period is
then in effect, the Borrower may make dividends and distributions in respect of
its common stock or Permitted Preferred Stock at such times and in such amounts
as shall be necessary (1) to permit the Parent to pay Permitted Parent
Liabilities (other than Permitted Parent Liabilities described in clause (iv) of
the definition thereof) when due and (2) to permit the Parent to fund any
Permitted Interest Fund; and (vi) so long as no Default has occurred and is
continuing, the Borrower may make cash dividends in respect of its common stock
or Permitted Preferred Stock at such times and in such amounts as shall be
necessary to permit the Parent to pay Permitted Parent Liabilities of the type
described in clause (iv) of the definition thereof.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES.
The Borrower will not, and will not permit any Subsidiary to, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of the Affiliates of the Borrower, except (a) in the case
of transactions between the Borrower or any Subsidiary and Affiliates of the
Borrower that are not wholly-owned Subsidiaries, transactions that are at prices
and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Borrower and its wholly-owned
Subsidiaries not involving any other Affiliate and (c) the Existing Agreements.
SECTION 6.08. RESTRICTED AGREEMENTS.
The Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or
90
imposes any condition upon the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Borrower or to guarantee Indebtedness of the
Borrower; PROVIDED that (a) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, and (b) the foregoing shall
not apply to restrictions and conditions existing on the Effective Date
identified on Schedule 6.08 (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition).
SECTION 6.09. REPAYMENT OF INDEBTEDNESS.
The Borrower will not make any Repayment in respect of, or make any
payment in violation of any subordination agreement in respect of, any
Indebtedness of the Borrower or any Subsidiary except (a) Repayment of
Indebtedness resulting in a prepayment of Loans pursuant to Section 2.09(d) and
(b) Repayments described in any of the clauses of the proviso to Section
2.09(d).
SECTION 6.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS.
The Borrower will not, and will not permit any Subsidiary to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, except for any such sale of any fixed or capital
asset that is made for cash consideration in an amount not less than the cost of
such fixed or capital asset and is consummated within 90 days after the Borrower
or such Subsidiary acquires or completes the construction of such fixed or
capital asset.
SECTION 6.11. MATERIAL CONTRACTS.
The Borrower will not, and will not permit any Subsidiary to, (a) amend,
modify, supplement, waive or terminate (prior to its expiration in accordance
with its terms as in effect on the Second Amendment Effective Date) the AT&T
Agreement in any manner that, taken as a whole, is adverse to the interests of
Lenders or (b) amend or modify the Cisco Supply Agreement to provide that less
than **** of the invoiced cost of Cisco Products supplied thereunder may be
financed by Tranche A-3 Loans. The Borrower will not, and will not permit any
Subsidiary to, amend, modify, supplement, waive or terminate (prior to its
expiration in accordance with its terms as in effect on the Second Amendment
Effective Date) the Tax Sharing Agreement in any manner that is adverse to the
interests of the Lenders without the prior written consent of the Administrative
Agent. The Borrower will not, and will not permit any Subsidiary to, amend,
modify, supplement, waive or terminate (prior to its expiration in accordance
with its terms as in effect on the Second Amendment Effective Date) any
agreement, instrument or License related to the acquisition, ownership,
construction or operation of the Network, or any other material agreement,
instrument or License to which Borrower or such Subsidiary is a party, in each
case, in any manner that would have a Material Adverse Effect.
91
SECTION 6.12. SPECIAL PURPOSE SUBSIDIARIES.
(a) The Borrower will not, and will not permit any Subsidiary or any other
Person other than ▇▇.▇▇▇ Property to, directly own any Real Estate Rights other
than Excluded Real Estate Rights. The Borrower will not (i) permit ▇▇.▇▇▇
Property to engage in any business or activity other than the acquisition,
ownership, and maintenance of the Real Estate Rights (other than Excluded Real
Estate Rights) and the properties and assets subject thereto, and any activities
incidental or ancillary to, or which are engaged in as a means of facilitating
or enhancing such activities, or (ii) permit ▇▇.▇▇▇ Property to incur or suffer
to exist any Lien on any of the Real Estate Rights (other than Excluded Real
Estate Rights) or any of the property or assets subject thereto other than the
Liens of the Security Documents and Permitted Encumbrances (other than those
described in clauses (c), (d), (i) and (j) of the definition of such term in
Section 1.01).
(b) The Borrower will not, and will not permit any Subsidiary or any other
Person other than ▇▇.▇▇▇ Services or any Services Subsidiary, to directly own
any ROW/License Rights. The Borrower will not (i) permit ▇▇.▇▇▇ Services or any
Services Subsidiary to engage in any business or activity other than the
business and activities described in Section 5.15(b), and any activities
incidental to, or which are engaged in as a means of facilitating such
activities, (ii) permit ▇▇.▇▇▇ Services or any Services Subsidiary to incur or
suffer to exist any Lien on any of the ROW/License Rights or any of the property
or assets subject thereto other than the Liens of the Security Documents and
Permitted Encumbrances or (iii) permit ▇▇.▇▇▇ Services or any Services
Subsidiary to incur or suffer to exist any Indebtedness other than Indebtedness
permitted to be incurred by such Subsidiary under Section 6.01.
(c) The Borrower agrees that all Network supply shall be initially
purchased by ▇▇.▇▇▇ Supply Corp. and all construction activities and/or services
will be conducted by or for ▇▇.▇▇▇ Construction Corp.
SECTION 6.13. MINIMUM ROUTE MILES AND SEGMENTS/LINKS.
Prior to the Conversion Date, the Borrower will not at any time permit
minimum route miles of the Network, or Segments or links of the Network, as of
any date set forth therein, to be less than the number of minimum route miles
required under Section 29.11 of the AT&T Agreement (unless such requirement is
waived by AT&T in accordance with the AT&T Agreement); PROVIDED that so long as
the Borrower is exercising its rights to cure a default under the AT&T Agreement
such that such failure has not become an event of default under the AT&T
Agreement, Borrower shall be deemed to be in compliance with this Section 6.13.
SECTION 6.14. MINIMUM CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS.
The Borrower will not at any time permit the sum of Cumulative Dark
Fiber/Conduit Revenue/Proceeds, as of the most recent Quarterly Date to be less
than the amount set forth below opposite such date:
92
---------------------------------------------------------
QUARTERLY DATE MINIMUM CUMULATIVE DARK
FIBER/CONDUIT
REVENUE/PROCEEDS (IN 000'S)
---------------------------------------------------------
March 31, 2001 34,400
June 30, 2001 50,000
September 30, 2001 55,000
December 31, 2001 75,000
March 31, 2002 115,000
June 30, 2002 155,000
September 30, 2002 175,000
December 31, 2002 210,000
March 31, 2003 240,000
June 30, 2003 280,000
September 30, 2003 300,000
December 31, 2003 320,000
March 31, 2004 335,000
June 30, 2004 350,000
September 30, 2004 355,000
December 31, 2004 365,000
---------------------------------------------------------
SECTION 6.15. MINIMUM CONSOLIDATED OPERATING REVENUES.
The Borrower will not at any time permit Consolidated Operating Revenues
for the period of four consecutive calendar quarters then most recently ended
(other than any such period ended after the Conversion Date) to be less than the
amount set forth below opposite the date on which such period ended:
---------------------------------------------------------
Four Calendar Minimum Consolidated
Quarters Ended Operating Revenues (in 000's)
---------------------------------------------------------
December 31, 2001 15,000
March 31, 2002 45,000
June 30, 2002 90,000
September 30, 2002 140,000
December 31, 2002 195,000
March 31, 2003 248,000
June 30, 2003 302,000
September 30, 2003 370,100
---------------------------------------------------------
SECTION 6.16. CONSOLIDATED EBITDA.
The Borrower will not at any time permit Consolidated EBITDA for the
period of four consecutive calendar quarters then most recently ended (other
than any such period ended after
93
the Conversion Date) to be less than the amount set forth below opposite the
date on which such period ended:
---------------------------------------------------------
Four Calendar Quarters Ended Consolidated EBITDA
(in 000's)
---------------------------------------------------------
March 31, 2001 (25,100)
June 30, 2001 (46,900)
September 30, 2001 (65,800)
December 31, 2001 (77,000)
March 31, 2002 (71,000)
June 30, 2002 (53,200)
September 30, 2002 (18,300)
December 31, 2002 28,700
March 31, 2003 59,200
June 30, 2003 98,300
September 30, 2003 134,200
---------------------------------------------------------
SECTION 6.17. TOTAL LEVERAGE RATIO.
The Borrower will not at any time on or prior to the Conversion Date
permit the Total Leverage Ratio to be greater than 0.45 to 1.00:
SECTION 6.18. CONSOLIDATED LEVERAGE RATIO.
The Borrower will not at any time after the Conversion Date permit the
Consolidated Leverage Ratio during any period set forth below to be greater than
the ratio set forth opposite such period:
-----------------------------------------------------------
Consolidated
Period Leverage Ratio
-----------------------------------------------------------
At any time after the Conversion
Date to December 31, 2002 9.00:1.00
January 1, 2003 to March 31, 2003 7.25:1.00
April 1, 2003 to June 30, 2003 6.00:1.00
July 1, 2003 to September 30, 2003 4.00:1.00
October 1, 2003 to December 31, 2003 3.50:1.00
January 1, 2004 to December 31, 2004 3.00:1.00
January 1, 2005 and Thereafter 2.00:1.00
-----------------------------------------------------------
SECTION 6.19. FIXED CHARGE COVERAGE RATIO.
The Borrower will not at any time after the Conversion Date permit the
Fixed Charge Coverage Ratio during any period set forth below to be less then
the ratio set forth below opposite such period:
94
---------------------------------------------------------
Fixed Charge
Period Coverage Ratio
---------------------------------------------------------
At any time after the Conversion
Date to December 31, 2002 0.45:1.00
January 1, 2003 to March 31, 2003 0.55:1.00
April 1, 2003 to June 30, 2003 0.60:1.00
July 1, 2003 to September 30, 2003 0.70:1.00
October 1, 2003 to December 31, 2003 0.75:1.00
January 1, 2004 to March 31, 2004 0.90:1.00
April 1, 2004 to June 30, 2004 1.00:1.00
July 1, 2004 to December 31, 2004 1.10:1.00
January 1, 2005 and Thereafter 1.25:1.00
---------------------------------------------------------
SECTION 6.20. CUMULATIVE CAPITAL EXPENDITURES.
The Borrower will not at any time permit Cumulative Capital Expenditures
as of any date during any fiscal year set forth below to exceed the amount set
forth opposite such fiscal year:
-------------------------------------------------
Cumulative Capital
Fiscal Year Expenditures
-------------------------------------------------
2001 $ 989,571,000
2002 $1,208,723,000
2003 $1,314,523,000
2004 $1,423,945,000
2005 $1,592,375,000
2006 $1,743,700,000
-------------------------------------------------
; PROVIDED, HOWEVER, the Cumulative Capital Expenditure limitation for any
fiscal year shall be increased by the sum of (a) the amount of all Indebtedness
permitted by Section 6.01 (except Loans under the Commitments in the amount
outstanding or committed hereunder on the Second Amendment Effective Date) that
is used for Capital Expenditures after the Second Amendment Effective Date, (b)
all cash contributions to capital and cash proceeds from the issuance and sale
of capital stock received by the Borrower after the Second Amendment Effective
Date (other than cash contributions to capital and cash proceeds from the
issuance and sale of capital stock to extent used by the Borrower to satisfy the
minimum Cumulative Dark Fiber/Conduit Revenue/Proceeds covenant set forth in
Section 6.14), to the extent not required to be used to prepay the Loans or cash
collateralize LOC Obligations (to the extent required by Section 2.09(h))
pursuant to Section 2.09(e) and which is actually used for Capital Expenditures,
(c) the amount of Asset Sale proceeds, condemnation proceeds and insurance
proceeds from a casualty event that are reinvested in Capital Expenditures, (d)
the amount of Cumulative Dark Fiber/Conduit Gross Proceeds in excess of
$230,000,000, to the extent not required to be used to prepay the Loans or cash
collateralize LOC Obligations (to the extent required by Section 2.09(h))
pursuant to Section 2.09(b)(i) and which is actually used for Capital
Expenditures and (e) all Excess Cash Flow not required to be used to prepay
Loans or cash collateralize LOC
95
Obligations (to the extent required by Section 2.09(h)) pursuant to the terms of
Section 2.09(c) and which is actually used for Capital Expenditures.
SECTION 6.21. USE OF COLLATERAL.
(a) Except as otherwise provided in clause (c) of this Section 6.21, the
Borrower will not permit, and will not permit any Subsidiary to permit, any
tangible asset constituting Collateral to be located (i) outside a Permitted UCC
Jurisdiction, (ii) outside the possession of the Borrower or a Subsidiary or
(iii) on any property not (A) owned by the Borrower or a Subsidiary, (B) subject
to the ROW License, or (C) leased by the Borrower or a Subsidiary (or subject to
an interconnection agreement granting rights to the Borrower or Subsidiary
substantially similar to a lease); provided that in the case of this clause (C)
the Borrower will comply with its obligations under Sections 5.14(b) and
5.14(c).
(b) This Section 6.21 shall not be construed to prohibit (i) the return of
any asset constituting Collateral to the vendor thereof for repairs, services,
modifications or other similar purposes or (ii) the storage of any asset
constituting Collateral in any warehouse or similar facility.
(c) The Borrower will not permit any asset constituting Collateral to be
located outside a Permitted UCC Jurisdiction unless (i) the Borrower shall have
notified the Administrative Agent reasonably in advance of any such assets being
transferred outside the Permitted UCC Jurisdiction and (ii) the Required Lenders
shall be reasonably satisfied that (A) the laws of the jurisdiction in which
such assets are to be located adequately protect the interests of the Lenders in
such Collateral, (B) the security interests in such Collateral granted under the
Security Documents will continue to be adequately protected and perfected, (C)
there are not any material risks relating to the political or economic stability
of the jurisdiction in which such Collateral is to be located or the Person that
will possess such Collateral in such jurisdiction, and (D) the location of such
Collateral in such jurisdiction is not otherwise materially disadvantageous to
the Lenders. The Borrower shall deliver to the Administrative Agent such legal
opinions addressed to the Lenders and other documentation as the Administrative
Agent, or the Required Lenders shall reasonably request in connection with their
consideration or approval of any proposed transfer of Collateral outside a
Permitted UCC Jurisdiction.
SECTION 6.22. CHANGES TO FISCAL YEAR.
The Borrower will not change the fiscal year applicable to it and its
consolidated Subsidiaries without the prior consent of the Administrative Agent.
96
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT.
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when 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, or the Borrower shall fail to
reimburse the Issuing Lender for any LOC Obligations when due (other than as a
result of a Lender's failure to make a Mandatory Borrowing with respect to such
unreimbursed LOC Obligations) in accordance with the terms hereof;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under the Loan Documents, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of three
(3) days;
(c) any representation or warranty made or deemed made by or on behalf of
any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any respect (or, in the case
of any representation or warranty that is not qualified as to materiality, 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(a)(i), 5.04 (with respect to its legal
existence and subject to the proviso contained therein) or 5.10 or in Article
VI;
(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), and such failure shall
continue unremedied for a period of 30 days after the earlier of (i) the date
the Borrower acknowledges such failure in a written notice delivered to
Administrative Agent and (ii) the date notice is given by the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender);
(f) any Loan Party 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 (after giving effect to any period
of grace expressly applicable thereto);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (after giving effect to any period of grace expressly applicable
thereto) the holder or holders of any Material Indebtedness or any
97
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, 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 Parent, 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 Parent, 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 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Parent, 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 Parent, 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 Parent, 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 $6,000,000 shall be rendered against the Parent, the Borrower or
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Parent, the Borrower or any Subsidiary
to enforce any such judgment;
(l) any Lien on any material portion of the Collateral purported to be
created under the Security Documents shall cease to be, or shall be asserted by
the Parent, the Borrower or any Subsidiary not to be, a valid and perfected Lien
on any Collateral, with the priority required by the Security Documents, except
as a result of the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents;
(m) a Change in Control shall occur;
(n) the loss, revocation, suspension or material impairment of any license
or agreement (or combination of licenses and agreements) of the Parent, or the
Borrower or any of
98
the Subsidiaries shall occur that results in or could reasonably be expected to
result in a Material Adverse Effect;
(o) expiration, termination or cancellation of, or suspension of
performance under, or unenforceability in whole or in part of, any Loan
Document, or the exercise by any Loan Party of its rights to cancel, terminate,
suspend or discontinue performance thereunder, or the assertion by any Loan
Party that such Loan Document is unenforceable against it in whole or in part;
(p) (i) AT&T shall have delivered a notice of termination of the AT&T
Agreement prior to its scheduled expiration as in effect on the Second Amendment
Effective Date, or (ii) AT&T shall have failed to pay the amount due pursuant to
Section 10.2A of the AT&T Agreement and such failure shall have continued for 30
days after such due date, (iii) AT&T shall be in arrears for 45 days or more in
payments due under the AT&T Agreement in an aggregate amount of $10 million or
more, (iv) AT&T shall have repudiated its obligations under the AT&T Agreement
or shall generally refuse to make payments thereunder and such repudiation or
refusal to pay shall have continued for 10 days or more after notice thereof, or
(v) the AT&T Agreement shall have been terminated for any reason prior to its
scheduled expiration as in effect on the Second Amendment Effective Date;
(q) an ERISA Event shall have occurred that when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(r) the Parent shall have failed to do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Borrower and the Subsidiaries, taken as a
whole and such failure shall continue unremedied for thirty (30) days after
notice thereof from the Administrative Agent to the Borrower (which notice will
be given at the request of any Lender);
(s) the Parent shall have merged into or consolidated with any other
Person, or shall have permitted any other Person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve (except that, if at
the time thereof and immediately after giving effect thereto no other Default
shall have occurred and be continuing, the Parent may merge with or into any
other Person so long as the Parent is the surviving entity); or
(t) any ownership interest in any rights of way, easements, licenses,
intellectual property (other than tradenames), conduit, fiber, Fixtures,
equipment, points of presence or real property constituting part of or used for
the Network shall be owned by the Parent or by any subsidiary of the Parent
other than the Borrower or any Subsidiary of the Borrower which has executed the
Initial Guaranty or an Additional Guaranty; provided, however that nothing
contained herein shall prohibit the licensing of intellectual property among
Affiliates of the Borrower on an arms-length basis.
99
(u) at any time prior to the earlier of (i) the first date on which the
amount of Cumulative Dark Fiber/Conduit Gross Proceeds exceeds $300,000,000 and
(ii) September 30, 2003, the amount of (A) cash on hand, cash in deposit or
operating accounts and Permitted Investments of the Borrower and its
Subsidiaries not subject to any Lien other than a Lien in favor of the
Collateral Trustee or Liens for de minimus amounts owing in favor of a financial
intermediary for the administration of accounts relating to such Permitted
Investments, PLUS (B) all unfunded commitments with respect to Indebtedness
permitted by Section 6.01(i) (except the unfunded Tranche A-3 Commitments,
except to the extent the proceeds thereof may be used to refinance payments
previously made for Capital Expenditures), Section 6.01(iv) (only to the extent
the proceeds thereof may be used to refinance payments previously made for
Capital Expenditures) and Section 6.01(vi), in each case only to the extent the
lenders providing such Indebtedness are fully obligated to fund such
commitments, shall be less than $25,000,000 in the aggregate;
then, and in every such event (other than an event with respect to the
Borrower or any Subsidiary 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 Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding and all other
amounts owing under this Agreement to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable) and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under outstanding Letters of Credit in an amount equal to
the maximum amount of which may be drawn under such Letters of Credit, 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 (including the amount necessary to cash collateralize the
outstanding Letters of Credit), 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 or any Subsidiary described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder (including the amount necessary to
cash collateralize the outstanding Letters of Credit), 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 AGENTS
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
100
powers as are delegated to such Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
Any Person serving as an 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 an Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent or any Subsidiary or other Affiliate thereof as
if it were not an 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 Parent or any of its Subsidiaries that is
communicated to or obtained by the Person serving as Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or willful 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 a Loan Party 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 Parent or 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.
101
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by such
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 Agent.
Subject to the appointment and acceptance of a successor Agent as provided
in this paragraph, an Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor with the approval of the Borrower (which approval
shall not be unreasonably withheld or delayed and, if an Event of Default has
occurred and is continuing, shall not be required). If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which 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 Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring 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 Agent.
Each Lender acknowledges that it has, independently and without reliance
upon any 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 any 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.
None of the Persons identified from time to time on the facing pages or
signature pages of, or otherwise in, this Agreement as a "co-agent," an
"arranger," a "syndication agent," a "book manager," a "documentation agent" or
a "co-documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as a "co-agent," an "arranger," a "syndication agent," a "book
manager," a "documentation agent" or a "co-documentation agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
102
Each Lender hereby irrevocably authorizes the Collateral Trustee to take
the following actions and hereby irrevocably authorizes the Administrative
Agent, on behalf of such Lender, to direct the Collateral Trustee (and the
Administrative Agent agrees to so direct the Collateral Trustee) to take such
actions, at the request of the Borrower in respect of any and all Liens granted
to the Collateral Trustee pursuant to the Security Documents: (i) to release
such Liens insofar as they attach to property that is sold, leased, or otherwise
disposed of in a transaction not prohibited by Section 6.04(b), (ii) to release
such Liens upon any and all property of the Loan Parties (and to terminate the
trust under the Trust Agreement) upon payment in full of the Loans, LOC
Obligations and all other amounts (other than contingent or indemnity
obligations which by their terms survive the termination of this Agreement) to
be paid pursuant to the Loan Documents and upon termination of the Commitments,
(iii) to release or, at the option of the Borrower, to subordinate such Liens,
upon the request of the Borrower, insofar as they attach to any property that is
the subject of a Purchase Money Lien listed on Schedule 6.02(iv) (as from time
to time supplemented by the Borrower) and the proceeds of such property.
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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer (Telecopy No.
703-391-6804);
(b) if to the Collateral Trustee, to it at ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust-Lucent/▇▇.▇▇▇ Collateral Trust
(Telecopy No. 617-664-5371);
(c) if to the Administrative Agent, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇/▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndication Agency
Services (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇;
(d) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the 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.
103
SECTION 9.02. WAIVERS; AMENDMENTS.
(a) No failure or delay by any 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 an Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) Subject to the terms of Section 2.06(f), 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 with the consent of the Required
Lenders; PROVIDED that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or reduce the rate of interest on such Loan, or reduce any
fees payable hereunder, without the written consent of each Lender directly
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender directly affected thereby, (iv) change Sections 2.16(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender (it being understood that Lenders
that fund any increase in the Commitments under Section 2.06(f) shall be
entitled and obligated to share equally and ratably as set forth in such
Section), (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (it being understood that Lenders that commit
to fund any increase in the Commitments under Section 2.06(f) shall be entitled
to vote their Commitments as increased, and such increased Commitments shall be
taken into account for purposes of determining whether any action has been taken
or approved by the Required Lenders), (vi) release all or any substantial part
of the Collateral from the Liens of the Security Documents (except as expressly
provided therein), without the written consent of each Lender, (vii) release the
Parent or any Subsidiary from its guarantee under the Guarantees (except as
expressly provided in such Guarantees) or limit or condition its obligations
thereunder, without the written consent of each Lender, or (viii) change any
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments due to Lenders holding Loans of any Class
differently than those
104
holding Loans of any other Class, without the written consent of Lenders holding
a majority in interest of the outstanding Loans of each affected Class and, in
the case of a Class with respect to which the Availability Period has not ended,
a majority in interest of the Commitments (in addition to any other consents
required by this sentence); PROVIDED, FURTHER, that no such agreement shall
amend, modify or otherwise affect the rights or duties of any Agent or the
Issuing Lender without the prior written consent of such Agent or the Issuing
Lender, as applicable.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) The Borrower shall pay (i) all costs and expenses incurred by First
Union, CSCC and the Administrative Agent, including the reasonable fees, charges
and disbursements of counsel for CSCC and the Administrative Agent, in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents (including, in the case of First Union, expenses incurred in
connection with its due diligence activities) and (ii) all costs and expenses
incurred by the Administrative Agent or any Lender, including the reasonable
fees, charges and disbursements of any counsel for the Administrative Agent or
any Lender, in connection with (A) the enforcement or protection of its rights
in connection with the Loan Documents, including its rights under this Section,
or in connection with the Loans made hereunder, including all such costs and
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans, and (B) in the case of First Union, CSCC (so long as the CSCC
Lenders hold in the aggregate, at least *** of the unfunded and available
Tranche A-3 Commitments and outstanding Tranche A-3 Loans) and the
Administrative Agent, the administration of, and any amendments, modifications,
waivers or supplements of or to the provisions of, any of the Loan Documents.
Any provision of this Section 9.03(a) that specifically relates to CSCC or a
CSCC Lender shall not be amended, modified or waived without the prior written
consent of CSCC.
(b) The Borrower hereby indemnifies and holds harmless each Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "INDEMNITEE"), against, and holds 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 Loan or the use of the proceeds therefrom, (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Parent, the Borrower or any of the
Subsidiaries or at which any Collateral is located, or any Environmental
Liability related in any way to the Parent, the Borrower or any of its
Subsidiaries, (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 or
(v) with respect to the Administrative Agent, its administration of the Tranche
A-3 Loans and Borrowings thereof; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses have resulted from the gross negligence or
willful misconduct of such Indemnitee.
105
(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 indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against such 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
outstanding Loans and Commitments at the time. Any provision of this Section
9.03(c) that specifically relates to CSCC or a CSCC Lender shall not be amended,
modified or waived without the prior written consent of CSCC.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and the Borrower 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, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 30
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, the Administrative
Agent and of each 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 Eligible Persons all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); PROVIDED that (i)
except as provided in clause (ii) below and in the case of an assignment to a
Lender or an Affiliate of a Lender, so long as no Default shall have occurred
and be continuing prior consent of the Borrower must be obtained for such
assignment (which consent shall not be unreasonably withheld (for purposes of
this provision, it shall not be unreasonable for the Borrower to withhold its
consent to assignment to a ▇▇▇▇▇▇▇ ▇▇▇▇ Entity)) and if a Default is continuing
prior consent of the Borrower must be obtained for any assignment to a ▇▇▇▇▇▇▇
▇▇▇▇ Entity, (ii) in the case of any assignment by a Lender of its Commitment or
the Loans at the time owing to it, to one or more Eligible Persons, the
Borrower's consent shall not be required (except the prior consent of the
Borrower must be obtained for any assignment to a ▇▇▇▇▇▇▇ ▇▇▇▇ Entity) so long
as any assignment of its Commitment is made to any Eligible Person (A) which is
a commercial bank organized under
106
the laws of the United States, or any state thereof, or under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, if such bank is
acting through a branch or agency located in the United States, in each case
having a combined capital and surplus of at least $100,000,000, or any
Subsidiary or Affiliate thereof, (B) whose debt is rated "A" or better by S&P or
"A" or better by ▇▇▇▇▇'▇, or (C) which otherwise is capable of meeting its
funding obligations hereunder (as reasonably determined by such Lender after
first giving the Borrower ten Business Days' prior written notice of its intent
to make such determination), PROVIDED, that a CSCC Lender may at any time assign
its Commitment to a Person not meeting any of the foregoing criteria if such
CSCC Lender remains (and delivers to the Borrower and the Administrative Agent
written confirmation that it remains) obligated to fulfill its funding
obligations under such Commitment, whether through recourse to such CSCC Lender
or otherwise, (iii) the Administrative Agent must give its prior written consent
to such assignment (which consent shall not be unreasonably withheld or delayed
and shall not be required in the case of an assignment by a CSCC Lender), (iv)
except in the case of an assignment to a Lender or an Affiliate of a Lender or
an assignment of the entire remaining amount of the assigning Lender's
Commitment or entire remaining Loans of any Class, the amount of the Commitment
and Loans of such Class 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 the Borrower and the Administrative Agent otherwise consent,
(v) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
fee of $3,500, and (vi) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire. Each Lender making
an assignment pursuant to this Section 9.04(b) shall give written notice to the
Borrower stating that (A) the Lender desires to make such assignment or sale,
and (B) the name and address of the proposed assignee. Within ten (10) days
after receipt of the Lender's written notice, if the Borrower delivers a written
notice to the Lender stating that the proposed assignee is unacceptable, then,
unless a Default shall have occurred and be continuing, such Lender shall have
no right to assign all or any portion of its rights and obligations under this
Agreement to such proposed assignee; PROVIDED, that this sentence does not apply
to any assignment by a Lender (whether to an Eligible Person or otherwise) that
satisfies the requirements set forth in clause (ii) above. If the Borrower does
not provide such written notice within ten (10) days of its receipt of such
assignment request, the Borrower shall be deemed to have consented to such
transfer. Subject to acceptance and recording thereof pursuant to paragraph (d)
of this Section 9.04, 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
2.13, 2.14, 2.15 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. So long as any CSCC Lender holds any Tranche A-3 Loans or any
Tranche A-3 Commitment, any provision of this Section
107
9.04(b) or Section 9.04(c) that specifically relates to a CSCC Lender shall not
be amended, modified or waived without the prior written consent of CSCC.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices 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 Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"REGISTER"). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent, the Collateral Trustee 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) and the processing fee referred to in clause (iv) of paragraph (b) of
this Section, subject to the Borrower's and Administrative Agent's right to
consent to such assignment to the extent provided in 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, with the consent of the Borrower and the
Administrative Agent (which shall not be required in the case of a sale of
participations by a CSCC Lender and which shall otherwise not be unreasonably
withheld (for purposes of this provision it shall not be unreasonable for the
Borrower to withhold its consent for a sale of a participation to a ▇▇▇▇▇▇▇ ▇▇▇▇
Entity)), sell participations to one or more Eligible Persons (a "PARTICIPANT")
in all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it);
PROVIDED that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Collateral Trustee 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 2.13,
2.14 and 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section, PROVIDED that
such Participant agrees for the benefit of Borrower and the other parties hereto
to be subject to Sections 2.15(f) and 2.17 as though it was a Lender. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of
108
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.16(c) as though it were a Lender.
(f) A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.15 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 2.15(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.
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 Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that any 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 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 2.13, 2.14, 2.15 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 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, each Assignment and Acceptance and any
additional letter agreements with respect to the agreement of the Parent and the
Borrower to cooperate with First Union with respect to marketing, selling or
syndicating Loans and Commitments or with respect to fees payable to First Union
or any 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. This
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, 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
109
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 any 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 its properties in
the courts of any 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
110
any other Loan Document in any court referred to in paragraph (b) of this
Section. The Borrower 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) The Borrower hereby irrevocably appoints and designates Corporation
Service Company, whose address is Two World ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or any other person having and maintaining a place of business
in the State of New York whom the Borrower may from time to time hereafter
designate (having given 30 days' notice thereof to the Administrative Agent,
each Lender and the Collateral Trustee), as the true and lawful attorney and
duly authorized agent for acceptance of service of legal process of the
Borrower. Without prejudice to the foregoing, 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.
The Administrative Agent and each of the Lenders agrees to maintain the
confidentiality of the Information (as defined below) and not use the
Information for any purpose not contemplated by this Agreement, 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
111
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 other Loan
Document or the enforcement of rights hereunder or thereunder, (f) pursuant to
customary market practices with respect to the sharing of and preservation of
confidential information in connection with the syndication of this Agreement
and the Commitments hereunder or the assignment or participation to any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
the Administrative Agent's or such Lender's rights or obligations under this
Agreement that is bound by the provisions hereof, (g) with the consent of the
Parent or 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 any Agent or any Lender on a non-confidential basis from a
source other than the Parent or the Borrower. For the purposes of this Section,
"INFORMATION" means all information received from the Parent or the Borrower
relating to the Parent, the Borrower or their businesses, other than any such
information that is publicly available or available to any Agent or any Lender
on a non-confidential basis prior to disclosure by the Parent or the Borrower,
PROVIDED that such information is 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 Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law
(collectively the "CHARGES"), shall exceed the maximum lawful rate (the "MAXIMUM
RATE") which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such 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 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 Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, and if lawful, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14. NON-RECOURSE.
The parties hereto each acknowledge and agree that the obligations of the
Loan Parties under the Loan Documents shall be non-recourse against the
officers, directors and employees of the Loan Parties and the stockholders of
the Parent.
SECTION 9.15. CSCC LENDERS.
With respect to any amendment, modification, restatement or waiver of any
Loan Document except any matter described in clauses (i) through (viii) in the
proviso in Section 9.02(b), the CSCC Lenders (and their transferees and
successors to the extent that such
112
transferees and successors are suppliers of Vendor Product (or Affiliates of
suppliers of Vendor Product) pursuant to one or more Vendor Supply Agreements
(each a "SUCCESSOR VENDOR")) agree, so long as the sum of all of such
Persons' outstanding Tranche A-3 Loans and, during the Tranche A-3
Availability Period, their unused Tranche A-3 Commitments (collectively, the
"TRANCHE A-3 EXPOSURE") exceed ************ in the aggregate, to vote (and
shall be deemed to have voted) an amount of the Tranche A-3 Exposure
corresponding to the amount in excess of ************ the same as the Lenders
who would constitute the Required Lenders if Tranche A-3 Loans and Tranche
A-3 Commitments held by CSCC Lenders and Successor Vendors were not
outstanding; provided, however, that all of such Persons' aggregate Tranche
A-3 Exposure up to (but not exceeding) ************ in the aggregate as of
any date of determination may be voted as each of such Persons shall elect in
its sole and absolute discretion. The provisions of this Section 9.15 shall
apply only to the CSCC Lenders and Successor Vendors and only to Tranche A-3
Loans and Tranche A-3 Commitments that are held at the time of the applicable
vote by the CSCC Lenders and Successor Vendors.
(Signatures Follow on Next Page)
113
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.
BORROWER: ▇▇.▇▇▇ CORP.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------------
ADMINISTRATIVE AGENT
AND LENDERS: FIRST UNION NATIONAL BANK, individually
in its capacity as a Lender and in its
capacity as Administrative Agent
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
BANK OF AMERICA, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
BANKERS TRUST COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
IBM CREDIT CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
ABN AMRO BANK N.V.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Schedule 2.01
COMMITMENTS
[TO FOLLOW]
Schedule 3.05
LICENSES
[TO COME]
Schedule 3.06
DISCLOSED MATTERS
None.
Schedule 3.14
SUBSIDIARIES
The following are wholly owned subsidiaries of the Borrower:
1. ▇▇.▇▇▇ Supply Corp.
2. ▇▇.▇▇▇ Construction Corp.
3. ▇▇.▇▇▇ Network Services Corp.
4. ▇▇.▇▇▇ Property Corp.
5. ▇▇.▇▇▇ Virginia, LLC
6. ▇▇.▇▇▇ Virginia Corp.
Schedule 3.15
INSURANCE
Schedule 6.01
EXISTING INDEBTEDNESS
None.
Schedule 6.02
EXISTING LIENS
NONE.
Schedule 6.04
EXISTING INVESTMENTS
NONE.
Schedule 6.08
EXISTING RESTRICTIONS
NONE.
EXHIBIT A
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the
Credit Agreement, dated as of October 29, 1999
(as the same may be amended, supplemented or otherwise modified from time to
time, the "
CREDIT AGREEMENT"), among ▇▇.▇▇▇ CORP., a Delaware corporation (the
"Borrower"), the Lenders party thereto and FIRST UNION NATIONAL BANK, as
Administrative Agent. Capitalized terms used herein but not defined herein shall
have the meanings assigned to such terms in the
Credit Agreement.
1. The assignor named below (the "ASSIGNOR") sells and assigns, without
recourse, to the assignee named below (the "ASSIGNEE"), and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Effective Date set forth below, the interests set forth below (the "ASSIGNED
INTEREST") in the Assignor's rights and obligations under the
Credit Agreement,
including, without limitation, the percentages and amounts set forth on the
reverse hereof of (a) the Commitments of the Assignor on the Effective Date and
(b) the Loans and Borrowings owing to the Assignor that are outstanding on the
Effective Date. The Assignee hereby acknowledges receipt of a copy of the Credit
Agreement. From and after the Effective Date (a) the Assignee shall be a party
to and be bound by the provisions of the Credit Agreement and, to the extent of
the interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the Loan Documents and (b) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement (and in the event that this Assignment and Acceptance covers
all or the remaining portion of the Assignor's rights and obligations under the
Credit Agreement, the Assignor shall cease to be a party thereto but shall
continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15, and 9.03
thereof, as well as to any fees accrued for its account and not yet paid).
2. This Assignment and Acceptance is being delivered to the Administrative
Agent together with (a) if the Assignee is organized under the laws of a
jurisdiction outside the United States, the forms specified in Section 2.15 of
the Credit Agreement, duly completed and executed by such Assignee, (b) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire and (c) a processing and recordation fee of $5,000.
3. This Agreement and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
Date of Assignment:
Legal Name of Assignee:
Legal Name of Assignor:
Assignee's Address for
Notices
Effective Date of Assignment (may not be fewer than five Business Days
after the Date of Assignment):
Commitment Principal Amount Assigned Percentage Assigned of
facility and
Commitments thereunder
(set forth to at least
eight decimals, as a
percentage of the
facility and the
aggregate Commitments
of all Lenders
thereunder)
Loans :
Tranche A-1: $ %
Tranche A-2: $ %
Tranche A-3 $ %
Revolving: $ %
Loan Commitments:
Tranche A-1: $ %
Tranche A-2: $ %
Tranche A-3 $ %
Revolving: $ %
2
The terms set forth above are hereby agreed to:
[-------------------------]
as Assignor,
By:
--------------------------------
Name:
Title:
[-------------------------]
as Assignee,
By:
--------------------------------
Name:
Title:
Consented to by (if required under Section
9.04(b)(i) of the Credit Agreement):
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
--------------------------------
Name:
Title:
▇▇.▇▇▇ CORP.
By:
--------------------------------
Name:
Title:
3
EXHIBIT B
[FORM OF TRUST AGREEMENT]
EXHIBIT C
[FORM OF SECURED PROMISSORY NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. NO TRANSFER OF THIS NOTE SHALL BE VALID OR
EFFECTIVE UNLESS MADE IN ACCORDANCE WITH THE APPLICABLE REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, OR ANY AVAILABLE
EXEMPTION THEREUNDER.
[-------------]
SECURED PROMISSORY NOTE
$[_________] ____________, 2001
FOR VALUED RECEIVED, the undersigned, ▇▇.▇▇▇ CORP., a Delaware corporation
(the "MAKER"), hereby promises to pay to the order of _______________ (the
"PAYEE"), the lesser of (a) the cumulative aggregate amount of the Loans made to
the Maker under the Credit Agreement (as defined below), and (b) the principal
sum of [______________________] ($[__________]) together with interest on the
outstanding principal balance. All payments of principal or interest or both
shall be made in lawful money of the United States of America. This note is the
note referred to in Section 2.07(e) of the Credit Agreement, dated as of October
29, 1999, by and among the Maker, the Lenders party thereto and First Union
National Bank, as administrative agent (as amended, modified, supplemented or
restated from time to time, the "CREDIT AGREEMENT") and evidences Loans made to
the Maker thereunder. Terms used herein but not otherwise defined, shall have
the meanings assigned to them in the Credit Agreement.
This note is (i) secured pursuant to (a) a Security Agreement (Borrower),
dated as of October 29, 1999, by and between the Maker and State Street Bank and
Trust Company, a Massachusetts trust company, as corporate trustee (together
with its successors in such capacity, the "CORPORATE TRUSTEE") and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, as individual trustee (the Corporate Trustee and such individual
trustee, together with his successors in such capacity, collectively, the
"TRUSTEES") for the benefit of the Secured Parties (as such term is defined in
the Trust Agreement, dated as of October 29, 1999, among the Maker and the
Trustees (the "TRUST AGREEMENT")) and (b) the other Security Documents among the
Maker and the Trustees and (ii) supported by the Guarantee and Subordination
Agreement, dated as of October 29, 1999, by the
Velocita Corp. ("PARENT") and
the subsidiaries of the Maker (each of the Parent and such subsidiaries,
together with their successors, a "GUARANTOR") in favor of the Trustees for the
benefit of the Secured Parties (as such term is defined in the Trust Agreement).
PAYMENTS OF PRINCIPAL AND INTEREST. The entire principal balance of this
note, together with all unpaid accrued interest hereunder, shall be due and
payable on the earlier to occur of (a) the Maturity Date and (b) the date of
acceleration of the maturity of this note upon the occurrence of certain events
as specified in the Credit Agreement. Interest on this note shall be payable to
the Payee on the date of any prepayment of this note and at maturity, whether by
acceleration or otherwise. If any payment on this note is due on a Saturday,
Sunday or other day on which commercial banks in New York City are authorized or
required by law to remain closed, such payment shall be made on the next
succeeding business day and such extension of time shall be included in
computing any interest due in connection with such payment. The Maker shall make
each payment required to be made by it hereunder in the manner set forth in
Section 2.16(a) of the Credit Agreement.
INTEREST RATE. This note will bear interest on the outstanding principal
under this note at the rate and in the manner specified in Section 2.11 of the
Credit Agreement.
PREPAYMENT. The Maker shall have the right and under certain circumstances
the obligation to prepay the Loans, in whole or in part, in the manner provided
in Sections 2.08 and 2.09 of the Credit Agreement.
REPRESENTATIONS AND WARRANTIES. The Maker represents and warrants to the
Payee as follows:
(a) The Maker is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite corporate power and authority to carry on its business as now
conducted;
(b) The execution and delivery of this note (i) is within the
Maker's corporate powers and has been duly authorized by all necessary corporate
and, if required, stockholder, action; (ii) has been duly executed and delivered
by the Maker and constitutes a legal, valid and binding obligation of the maker
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or other laws affecting creditors' rights generally and subject to
general principles of equity; and
(c) The execution and delivery of this note (i) does not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, (ii) will not violate any applicable law or regulation
or the certificate of incorporation or bylaws of the Maker or any order of any
Governmental Authority, (iii) will not violate or result in a default under any
agreement or instrument evidencing or governing any Material Indebtedness or its
assets or give rise to a right thereunder to require any payment to be made, and
(iv) will not result in the creation or imposition of any Lien on any asset of
the Maker.
REMEDIES ON DEFAULT. If any Event of Default shall occur and be
continuing, then in addition to the rights reserved to the holder under the
Credit Agreement, the entire principal balance and all accrued interest under
this note shall, at the option of the holder hereof, become immediately due and
payable, without notice or demand.
CERTAIN WAIVERS. Except as otherwise expressly provided in this note, the
Maker hereby waives diligence, demand, presentment for payment, protest,
dishonor, nonpayment, default, and notice of any and all of the foregoing.
2
AMENDMENTS. This note may not be changed orally, but only by an agreement
in writing and signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
GOVERNING LAW; WAIVER OF JURY TRIAL. THIS NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE MAKER
HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING FOR THE
ENFORCEMENT OR COLLECTION OF THIS NOTE. Any such action or proceeding shall be
brought only in the federal or state courts situated in the County and State of
New York.
COLLECTION COSTS. In the event that the Payee shall, after the occurrence
and during the continuance of an Event of Default (and PROVIDED that the Payee
shall be permitted, at such time, to enforce its rights hereunder and retain
payments received hereunder), turn this note over to an attorney for collection,
the Maker shall further be obligated to the Payee for the Payee's reasonable
attorneys' fees and expenses incurred in connection with such collection as well
as any other costs incurred by Payee in connection with the collection of all
amounts due hereunder.
IN WITNESS WHEREOF, the Maker has duly caused this note to be signed on
its behalf, in its corporate name and by its duly authorized officer as of the
date first set forth above.
▇▇.▇▇▇ CORP.
By:
---------------------------
Name:
Title:
3
SCHEDULE OF LOANS
THIS NOTE EVIDENCES LOANS MADE UNDER THE WITHIN-DESCRIBED CREDIT AGREEMENT
TO THE MAKER, ON THE DATES, IN THE PRINCIPAL AMOUNTS, OF THE TYPES, BEARING
INTEREST AT THE RATES AND HAVING INTEREST PERIODS (IF APPLICABLE) OF THE
DURATIONS SET FORTH BELOW, SUBJECT TO THE PAYMENTS AND PREPAYMENTS OR PRINCIPAL
SET FORTH BELOW:
Principal Unpaid
Amount Duration of Amount Paid Principal Notation
Date Made of Loan Type of Loan Interest Rate Interest Rate or Prepaid Amount Made by
EXHIBIT D
[FORM OF BORROWING REQUEST]
[▇▇.▇▇▇ Letterhead]
TO: First Union National Bank
FROM: ▇▇.▇▇▇ Corp.
RE: Borrowing Request
DATE: ______, 200_
Reference is made to the Credit Agreement, dated as of October 29, 1999 (the
"Credit Agreement"), among ▇▇.▇▇▇ Corp., a Delaware corporation (the
"Borrower"), the Lenders party thereto and First Union National Bank, as
Administrative Agent. Capitalized terms used in this Borrowing Request and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement.
1. The amount of the Borrowing is: __________________
2. The Borrowing consists of a [Tranche ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or
Revolving] Loan.
3. The date of such Borrowing (which shall
be a Business Day) is: $__________________
4. The type of the Borrowing is:
AMOUNT OF LOAN
(A) LIBOR Borrowing $_________________
(B) ABR Borrowing $_________________
The initial Interest Period(s) of the
LIBOR Borrowing is (if applicable):
-------------------
one/two/three/six
months
5. The conditions to funding such Borrowing set forth in Section 4.02 have
been satisfied.
6. The location and number of the account
or accounts to which funds (if any) are
to be disbursed, which shall comply with
the requirements of Section 2.04 are: ____________________
7. If this Borrowing Request is for a Tranche A-3 Loan, the requirements set
forth in Section 2.03(v) and 2.03(viii) have been satisfied.
On and as of the date hereof and immediately after giving effect to any
Borrowing used to build any Segment of the Network, the Borrower has all
necessary Real Estate Rights, and sufficient financing, to complete such
Segment or portion thereof to be financed with the proceeds of such
Borrowing.
▇▇.▇▇▇ Corp.
By:
---------------------------------
Name:
Title:
Accepted by:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
---------------------------
Name:
Title:
2
[SCHEDULE 1]
[Attached Cisco Invoices]