EXHIBIT 4.4
CREDIT AGREEMENT
dated as of December 31, 1998
by and among
CT COMMUNICATIONS, INC.,
and
the Subsidiary Borrowers referred to herein
as Borrowers,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.......................................................................1
SECTION 1.2 General..........................................................................14
SECTION 1.3 Other Definitions and Provisions.................................................15
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans...........................................................15
SECTION 2.2 Procedure for Advances of Revolving Credit Loans.................................15
SECTION 2.3 Repayment of Revolving Credit Loans..............................................16
SECTION 2.4 Revolving Credit Notes...........................................................17
SECTION 2.5 Permanent Reduction of the Aggregate Commitment..................................18
SECTION 2.6 Termination of Credit Facility...................................................18
SECTION 2.7 Use of Proceeds..................................................................19
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment...................................................................20
SECTION 3.2 Procedure for Issuance of Letters of Credit......................................20
SECTION 3.3 Commissions and Other Charges....................................................21
SECTION 3.4 L/C Participations...............................................................21
SECTION 3.5 Reimbursement Obligation of the Borrowers........................................22
SECTION 3.6 Obligations Absolute.............................................................22
SECTION 3.7 Effect of Application............................................................23
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.........................................................................23
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans ........................26
SECTION 4.3 Fees.............................................................................27
SECTION 4.4 Manner of Payment................................................................27
SECTION 4.5 Crediting of Payments and Proceeds...............................................28
SECTION 4.6 Adjustments......................................................................28
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent...........................................28
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SECTION 4.8 Changed Circumstances............................................................29
SECTION 4.9 Indemnity........................................................................31
SECTION 4.10 Capital Requirements.............................................................32
SECTION 4.11 Taxes............................................................................32
SECTION 4.12 Change in Lending Office.........................................................34
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 Closing..........................................................................34
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit ..........................34
SECTION 5.3 Conditions to All Extensions of Credit...........................................37
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 6.1 Representations and Warranties...................................................38
SECTION 6.2 Year 2000 Compatibility..........................................................46
SECTION 6.3 Survival of Representations and Warranties, Etc..................................46
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
SECTION 7.1 Financial Statements and Projections.............................................47
SECTION 7.2 Officer's Compliance Certificate.................................................48
SECTION 7.3 Accountants' Certificate.........................................................48
SECTION 7.4 Other Reports....................................................................48
SECTION 7.5 Notice of Litigation and Other Matters...........................................49
SECTION 7.6 Accuracy of Information..........................................................50
ARTICLE VIII
AFFIRMATIVE COVENANTS
SECTION 8.1 Preservation of Corporate Existence and Related Matters .........................50
SECTION 8.2 Maintenance of Property..........................................................51
SECTION 8.3 Insurance........................................................................51
SECTION 8.4 Accounting Methods and Financial Records.........................................51
SECTION 8.5 Payment and Performance of Obligations...........................................51
SECTION 8.6 Compliance With Laws and Approvals...............................................51
SECTION 8.7 Environmental Laws...............................................................51
SECTION 8.8 Compliance with ERISA............................................................52
SECTION 8.9 Compliance With Agreements.......................................................52
65008446.1 32599 1449E 042
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SECTION 8.10 Conduct of Business..............................................................52
SECTION 8.11 Visits and Inspections...........................................................52
SECTION 8.12 Additional Subsidiaries..........................................................53
SECTION 8.13 Year 2000 Compatibility..........................................................53
SECTION 8.14 Further Assurances...............................................................53
SECTION 8.15 CoBank Participation Certificates................................................53
SECTION 8.16 Merger of Pop-Net, Inc...........................................................53
ARTICLE IX
FINANCIAL COVENANTS
SECTION 9.1 Leverage Ratio...................................................................54
SECTION 9.2 Fixed Charge Coverage Ratio......................................................54
SECTION 9.3 Total Debt to Total Capitalization Coverage Ratio................................54
ARTICLE X
NEGATIVE COVENANTS
SECTION 10.1 Limitations on Debt..............................................................55
SECTION 10.2 Limitations on Guaranty Obligations..............................................56
SECTION 10.3 Limitations on Liens.............................................................56
SECTION 10.4 Limitations on Loans, Advances, Investments and Acquisitions ....................57
SECTION 10.5 Limitations on Mergers and Liquidation...........................................59
SECTION 10.6 Limitations on Sale of Assets....................................................59
SECTION 10.7 Limitations on Dividends and Distributions.......................................60
SECTION 10.8 Limitations on Exchange and Issuance of Capital Stock ...........................60
SECTION 10.9 Transactions with Affiliates.....................................................61
SECTION 10.10 Certain Accounting Changes.......................................................61
SECTION 10.11 Amendments; Payments and Prepayments of Subordinated Debt61
SECTION 10.12 Restrictive Agreements...........................................................61
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default................................................................61
SECTION 11.2 Remedies.........................................................................64
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc..................................65
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1 Appointment......................................................................65
SECTION 12.2 Delegation of Duties.............................................................66
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SECTION 12.3 Exculpatory Provisions...........................................................66
SECTION 12.4 Reliance by the Administrative Agent.............................................66
SECTION 12.5 Notice of Default................................................................67
SECTION 12.6 Non-Reliance on the Administrative Agent and Other Lenders ......................67
SECTION 12.7 Indemnification..................................................................68
SECTION 12.8 The Administrative Agent in Its Individual Capacity .............................68
SECTION 12.9 Resignation of the Administrative Agent; Successor Administrative
Agent............................................................................69
SECTION 12.10 The Administrative Agent.........................................................69
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices..........................................................................69
SECTION 13.2 Expenses; Indemnity..............................................................71
SECTION 13.3 Set-off..........................................................................71
SECTION 13.4 Governing Law....................................................................72
SECTION 13.5 Consent to Jurisdiction..........................................................72
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial........................................72
SECTION 13.7 Reversal of Payments.............................................................74
SECTION 13.8 Injunctive Relief; Punitive Damages..............................................74
SECTION 13.9 Accounting Matters...............................................................74
SECTION 13.10 Successors and Assigns; Participations...........................................75
SECTION 13.11 Amendments, Waivers and Consents.................................................78
SECTION 13.12 Performance of Duties............................................................79
SECTION 13.13 All Powers Coupled with Interest.................................................79
SECTION 13.14 Survival of Indemnities..........................................................79
SECTION 13.15 Titles and Captions..............................................................79
SECTION 13.16 Severability of Provisions.......................................................79
SECTION 13.17 Counterparts.....................................................................79
SECTION 13.18 Term of Agreement................................................................79
SECTION 13.19 CT as Agent for Borrowers; Obligations Joint and Several. .......................80
SECTION 13.20 Inconsistencies with Other Documents; Independent Effect
of Covenants.....................................................................80
SECTION 13.21 Trust Obligations................................................................80
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CREDIT AGREEMENT, dated as of the 31st day of December, 1998, by and
among CT COMMUNICATIONS, INC. ("CT"), a North Carolina corporation and each of
the Subsidiaries of CT listed on the signature pages hereto and each additional
Subsidiary of CT which hereafter becomes a Borrower pursuant to Section 8.12
(collectively, the "Subsidiary Borrowers" and, together with CT, the
"Borrowers"), the Lenders who are or may become a party to this Agreement, and
FIRST UNION NATIONAL BANK, as Administrative Agent for the Lenders.
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrowers on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.9.
"Administrative Agent's Office" means the office of the
Administrative Agent specified in or determined in accordance with the
provisions of Section 13.1(c).
"Affiliate" means, with respect to any Person, any other Person
(other than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote twenty percent (20%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be Sixty Million Dollars ($60,000,000).
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in
Section 4.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto
in Section 13.10(b)(iii).
"Available Commitment" means, as to any Lender at any time, an
amount equal to (a) such Lender's Commitment less (b) such Lender's Extensions
of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and
(b) the sum of (i) the Federal Funds Rate plus (ii) 1/2 of 1%; each change in
the Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means any Revolving Credit Loan bearing interest at
a rate based upon the Base Rate as provided in Section 4.1(a).
"Borrowers" shall have the meaning assigned thereto in the preamble
hereof.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Capital Asset" means, with respect to the Borrowers and their
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the
Borrowers and their Subsidiaries.
"Capital Expenditures" means, with respect to the Borrowers and
their Subsidiaries for any period, the aggregate cost of all Capital Assets
acquired by the Borrowers and their Subsidiaries during such period, determined
in accordance with GAAP.
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"Capital Lease" means, with respect to the Borrowers and their
Subsidiaries, any lease of any property that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrowers and their Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in
Section 11.1(i).
"Closing Date" means the date of this Agreement.
"CoBank" shall have the meaning assigned thereto in Section 8.15.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Commitment" means, as to any Lender, the obligation of such Lender
to make Revolving Credit Loans to and issue or participate in Letters of Credit
issued for the account of the Borrowers hereunder in an aggregate principal or
face amount at any time outstanding not to exceed the amount set forth opposite
such Lender's name on Schedule 1 hereto, as the same may be reduced or modified
at any time or from time to time pursuant to the terms hereof.
"Commitment Percentage" means, as to any Lender at any time, the
ratio of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment.
"Communications Law" means the Communications Act of 1934, as
amended, and all rules and regulations thereunder, or any successor statute or
statutes thereto (including, without limitation, the Telecommunications Act of
1996) and all rules and regulations thereunder, and all rules and regulations of
the FCC, any applicable PUC or any other applicable Governmental Authority
related to the provision of telecommunication or broadcast services, each as
amended or supplemented from time to time.
Communications License" means any license for the provision of
telecommunication services, and any other license, permit, consent, certificate
of compliance, franchise, approval, waiver or authorization granted or issued by
the FCC or any other applicable Governmental Authority, including without
limitation, any of the foregoing authorizing or permitting the acquisition,
construction or operation of Network Facilities or any other system for the
provision of telecommunication services.
"Consolidated" means, when used with reference to financial
statements or financial statement items of the Borrowers and their Subsidiaries,
such statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Credit Facility" means the collective reference to the Revolving
Credit Facility and the L/C Facility.
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"Debt" means, with respect to the Borrowers and their Subsidiaries
at any date and without duplication, the sum of the following calculated in
accordance with GAAP: (a) all liabilities, obligations and indebtedness for
borrowed money including but not limited to obligations evidenced by bonds,
debentures, notes or other similar instruments of any such Person, (b) all
obligations to pay the deferred purchase price of property or services of any
such Person, except trade payables arising in the ordinary course of business
not more than ninety (90) days past due, (c) all obligations of any such Person
as lessee under Capital Leases, (d) all Debt of any other Person secured by a
Lien on any asset of any such Person; provided that, so long as recourse to such
Person is limited solely to the assets so encumbered, the amount of such Debt
shall be deemed to equal the lesser of (i) the fair market value of such assets
and (ii) the amount of such Debt, (e) all Guaranty Obligations of any such
Person, (f) all obligations, contingent or otherwise, of any such Person
relative to the face amount of letters of credit, whether or not drawn,
including without limitation any Reimbursement Obligation, and banker's
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities of such Person and (h)
all termination payments which would be due and payable by any such Person
pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 11.1 which
with the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in
lawful currency of the United States.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, or (f) any other
Person that has been approved in writing as an Eligible Assignee by the
Borrowers and the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any current or former
ERISA Affiliate.
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"Environmental Laws" means any and all federal, state and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, each as amended, supplemented or
otherwise modified.
"ERISA Affiliate" means any Person who together with any Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section
11.1, provided that any requirement for passage of time, giving of notice, or
any other condition, has been satisfied.
"Extensions of Credit" means, as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding and (b) such Lender's
Commitment Percentage of the L/C Obligations then outstanding.
"FCC" means the Federal Communications Commission or any successor
Governmental Authority.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
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"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrowers and their
Subsidiaries ending on December 31.
"Fixed Charges" means, for any period, the sum of the following
determined on a consolidated basis, without duplication, for the Borrowers and
their Subsidiaries in accordance with GAAP: (a) scheduled principal and interest
payments with respect to Debt during such period, (b) Capital Expenditures
during such period (excluding all amounts paid by CT or any Subsidiary thereof
to purchase BellSouth Carolinas PCS, LP's ownership interest in the PSC
Communications License jointly owned by CT and BellSouth Carolinas PCS, LP,
including its customers, assets, and pro rata share of spectrum clearing costs
associated with the area to be serviced, so long as such amount does not exceed
$20,000,000), (c) cash taxes paid or due during such period and (d) cash
dividends paid or due during such period.
"GAAP" means generally accepted accounting principles, as recognized
by the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrowers and their Subsidiaries throughout the period indicated
and consistent with the prior financial practice of the Borrowers and their
Subsidiaries.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.
"Governmental Authority" means any nation, province, state or
political subdivision thereof, and any government or any Person exercising
executive, legislative, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Borrowers and their
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other payment
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement condition or otherwise) or (b) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
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"Hazardous Materials" means any substances or materials (a) which
are or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release of which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of any Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
"Intercompany Debt" means any Debt among any Borrowers.
"Interest Expense" means, for any period, total interest expense
(including, without limitation, interest expense attributable to Capital Leases)
determined on a Consolidated basis, without duplication, for the Borrowers and
their Subsidiaries in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
4.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C Commitment" means One Million Dollars ($1,000,000).
"L/C Facility" means the letter of credit facility established
pursuant to Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of
(a) the aggregate undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
other than the Issuing Lender.
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"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.10(b).
"Lending Office" means, with respect to any Lender, the office of
such Lender maintaining such Lender's Commitment Percentage of the Revolving
Credit Loans.
"Letters of Credit" shall have the meaning assigned thereto in
Section 3.1.
"Leverage Ratio" means the ratio determined in accordance with
Section 9.1.
"LIBOR" means the rate of interest per annum determined on the basis
of the rate for deposits in Dollars in minimum amounts of at least $2,000,000
for a period equal to the applicable Interest Period which appears on the
Telerate Page 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period). If, for any
reason, such rate does not appear on Telerate Page 3750, then "LIBOR" shall be
determined by the Administrative Agent to be the arithmetic average (rounded
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)) of
the rate per annum at which deposits in Dollars would be offered by first class
banks in the London interbank market to the Administrative Agent approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period and in an
amount substantially equal to the amount of the applicable Revolving Credit
Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:
LIBOR Rate = LIBOR
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Revolving Credit Loan bearing interest
at a rate based upon the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes, the Applications, any Hedging Agreement with any Lender (which
Hedging Agreement is permitted or required hereunder), and each other document,
instrument and agreement executed and delivered by any Borrower or its
Subsidiaries in connection with this Agreement or otherwise referred to herein
or contemplated hereby, all as may be amended, restated or otherwise modified.
8
"Material Adverse Effect" means, with respect to the Borrowers and
their Subsidiaries, taken as a whole, a material adverse effect on the
properties, business, prospects, operations or condition (financial or
otherwise) of such Persons or the ability of such Persons to perform their
respective obligations under the Loan Documents or Material Contracts, in each
case to which they are a party.
"Material Contract" means (a) any contract or other agreement,
written or oral, of any Borrower or any of its Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $500,000 per annum,
or (b) any other contract or agreement, written or oral, of any Borrower or any
of its Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
"Minority Interests" means any shares of stock of any class of a
Subsidiary or Affiliate of any Borrower (other than directors' qualifying shares
as required by law ) that are not owned by such Borrower and/or one or more
Wholly-Owned Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary or involuntary
liquidation value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any changes from
the book value of such common stock required by the foregoing method of valuing
Minority Interests in preferred stock.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions within the preceding
six years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
sale or other disposition of assets, the gross cash proceeds received by any
Borrower or any of its Subsidiaries from such sale less the sum of (i) all
income taxes and other taxes assessed by a Governmental Authority as a result of
such sale and any other fees and expenses incurred in connection therewith and
(ii) the principal amount of, premium, if any, and interest on any Debt secured
by a Lien on the asset (or a portion thereof) sold, which Debt is required to be
repaid in connection with such sale, (b) with respect to any offering of capital
stock or issuance of Debt, the gross cash proceeds received by any Borrower or
any of its Subsidiaries therefrom less all legal, underwriting and other fees
and expenses incurred in connection therewith and (c) with respect to any
payment under an insurance policy, the amount of cash proceeds received by any
Borrower or its Subsidiaries from an insurance company or Governmental
Authority, as applicable, net of all expenses of collection.
"Net Earnings" for any period shall mean the gross revenues of the
Borrowers and their Subsidiaries for such period less all expenses and other
proper charges, determined on a Consolidated basis in accordance with GAAP,
excluding: (a) any extraordinary gains or losses as determined in accordance
with GAAP and (b) losses attributable to Minority Interests and earnings
attributable to Minority Interests (unless such earnings shall have actually
been received by any Borrower or a Wholly-Owned Subsidiary in the form of cash
distributions).
9
"Net Income" means, with respect to the Borrowers and their
Subsidiaries, for any period of determination, the net income (or loss) of the
Borrowers and their Subsidiaries for such period, determined on a Consolidated
basis in accordance with GAAP; provided that there will be excluded (a) the net
income (or loss) of any Person, other than a Subsidiary, in which any Borrower
or any of its Subsidiaries has a joint interest with a third party except to the
extent of the amount of dividends or distributions actually paid to such
Borrower or such Subsidiary during such period, (b) except to the extent
included pursuant to the foregoing clause (a), the net income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or any of its Subsidiaries or that
Person's assets are acquired by such Person or any of its Subsidiaries, (c) the
net income (if positive) of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary to any Borrower
or any of its Subsidiaries thereof of such net income (i) is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute rule or governmental regulation applicable to
such Subsidiary or (ii) would be subject to any taxes payable on such dividends
or distributions and (d) any gains or losses attributable to asset sales, as
determined in accordance with GAAP, including any related tax effects on such
Person.
"Net Worth" means, at any date of determination, the total
stockholder's equity (including capital stock, additional paid-in capital and
retained earnings after deducting the treasury stock) of the Borrowers and their
Subsidiaries appearing on a Consolidated balance sheet of the Borrowers and
their Subsidiaries prepared in accordance with GAAP.
"Network Agreement" means any document or agreement entered into by
any Borrower or any of its Subsidiaries regarding the use, operation or
maintenance of, or otherwise concerning, any of the Network Facilities.
"Network Facility" means the switches and network of digital and
analog facilities owned or leased by any Borrower or any of its Subsidiaries for
use in the provision of telecommunication services.
"Notice of Account Designation" shall have the meaning assigned
thereto in Section 2.2(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.3(f).
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or
10
similar petition) the Revolving Credit Loans, (b) the L/C Obligations, (c) all
payment and other obligations owing by any Borrower to any Lender or the
Administrative Agent under any Hedging Agreement with any Lender (which Hedging
Agreement is permitted or required hereunder), and (d) all other fees and
commissions (including attorney's fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by any Borrower to the Lenders or the Administrative Agent, of every kind,
nature and description, direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note, in each case under or in respect of this Agreement,
any Revolving Credit Note, any Letter of Credit or any of the other Loan
Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Operating Cash Flow" means, for any period, the sum of the
following determined on a consolidated basis, without duplication, for the
Borrowers and their Subsidiaries in accordance with GAAP: (a) Net Income for
such period plus (b) the sum of the following to the extent deducted in
determining Net Income: (i) income and franchise taxes, (ii) Interest Expense,
(iii) amortization, depreciation and other non-cash charges less (c) the sum of
interest income and any extraordinary gains to the extent added in determining
Net Income.
"Other Taxes" shall have the meaning assigned thereto in Section
4.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
"Participation Certificates" shall have the meaning assigned thereto
in Section 8.15.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of any
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any of its current or
former ERISA Affiliates.
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a North Carolina
resident and ▇.▇. ▇▇▇▇▇▇▇▇, III, a North Carolina resident.
11
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, business trust, joint venture, joint
stock company, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental Authority or any other form of entity or group
thereof.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union 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.
"PUC" means any state, provincial or other local regulatory agency
or body that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Network Facility or over Persons who own,
construct or operate a Network Facility, in each case by reason of the nature or
type of the business subject to regulation and not pursuant to laws and
regulations of general applicability to Persons conducting business in any such
jurisdiction.
"PUC Authorizations" means all applications, filings, reports,
documents, recordings and registrations with, and all validations, exemptions,
franchises, waivers, approvals, orders or authorizations, consents, licenses,
certificates and permits from, any PUC.
"Recapitalization" means the recapitalization as more particularly
described in that certain proxy statement delivered to the shareholders of CT
during the month of December, 1998, to be voted on at the January 28, 1999
Shareholders' Meeting.
"Register" shall have the meaning assigned thereto in Section
13.10(d).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of
at least sixty-six and two-thirds percent (66-2/3%) of the aggregate unpaid
principal amount of the Revolving Credit Notes, or if no amounts are outstanding
under the Revolving Credit Notes, any combination of Lenders whose Commitment
Percentages aggregate at least sixty-six and two-thirds percent (66-2/3%).
"Responsible Officer" means any of the following: the chief
executive officer or chief financial officer of CT or any other officer of CT
reasonably acceptable to the Administrative Agent.
12
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"Revolving Credit Loans" means any revolving loan made to the
Borrowers pursuant to Section 2.1, and all such revolving loans collectively as
the context requires.
"Revolving Credit Notes" means the collective reference to the
Revolving Credit Notes made by the Borrowers payable to the order of each
Lender, substantially in the form of Exhibit A hereto, evidencing the Revolving
Credit Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part; "Revolving Credit Note" means any of such Revolving Credit
Notes.
"Solvent" means, as to the Borrowers and their Subsidiaries, taken
as a whole, on a particular date, that such Persons (a) have capital sufficient
to carry on their business and transactions and all business and transactions in
which they are about to engage and are able to pay their debts as they mature,
(b) own property having a value, both at fair valuation and at present fair
saleable value, greater than the amount required to pay their probable
liabilities (including contingencies), and (c) do not believe that they will
incur debts or liabilities beyond their ability to pay such debts or liabilities
as they mature.
"Subordinated Debt" means the collective reference to Debt on
Schedule 6.1(t) hereof designated as Subordinated Debt and any other Debt of any
Borrower or any Subsidiary thereof subordinated in right and time of payment to
the Obligations on terms satisfactory to the Required Lenders.
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Borrowers.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
"Termination Date" means the earliest of the dates referred to in
Section 2.6.
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA (other than a Reportable Event as to which the provision
of thirty (30) days notice has
13
been waived by the PBGC under applicable regulations) or (b) the withdrawal of
any Borrower or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
distress termination under Section 4041(c) of ERISA, or (d) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC, or (e) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, or (f) the partial or
complete withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer
Plan, or (g) the imposition of a Lien pursuant to Section 412 of the Code
or Section 302 of ERISA, or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA, or (i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Capitalization" means, as of any date of determination, Total
Debt plus Consolidated Net Worth, each as of such date.
"Total Debt" means, as of any date of determination, the aggregate
amount of Debt of the Borrowers and their Subsidiaries determined on a
Consolidated basis.
"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina, as amended, restated or otherwise modified.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary are,
directly or indirectly, owned or controlled by any Borrower and/or one or more
of its Wholly-Owned Subsidiaries. For purposes of this Agreement, Concord
Telephone shall be deemed to be a Wholly-Owned Subsidiary of CT.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
14
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Revolving Credit Notes and the other Loan Documents
or any certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Revolving
Credit Loans to the Borrowers on a joint and several basis from time to time
from the Closing Date through the Termination Date as requested by CT on behalf
of the Borrowers in accordance with the terms of Section 2.2; provided, that (a)
the aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to any amount requested) shall not exceed the Aggregate Commitment
less the sum of all outstanding L/C Obligations and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrowers shall not at
any time exceed such Lender's Available Commitment. Each Revolving Credit Loan
by a Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Revolving Credit Loans requested
on such occasion. Subject to the terms and conditions hereof, the Borrowers may
borrow, repay and reborrow Revolving Credit Loans hereunder until the
Termination Date.
SECTION 2.2 Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing. CT, on behalf of the Borrowers, shall
give the Administrative Agent irrevocable prior written notice in the form
attached hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00 a.m.
(Charlotte time) (i) on the same Business Day as each Base Rate Loan and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be in an amount equal to the
amount of the Aggregate Commitment then available to the Borrowers, or if less,
(x) with respect to Base Rate Loans in an aggregate principal amount of
$1,000,000 or a whole multiple of $250,000 in excess thereof and (y) with
respect to LIBOR Rate Loans in an aggregate principal amount of $2,000,000 or a
whole multiple of $500,000 in excess thereof, (C) whether the Revolving Credit
Loans are to be LIBOR Rate Loans or Base Rate Loans, and (D) in the case
15
of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto.
Notices received after 11:00 a.m. (Charlotte time) shall be deemed received on
the next Business Day. The Administrative Agent shall promptly notify the
Lenders of each Notice of Borrowing.
(b) Disbursement of Revolving Credit Loans. Not later than 2:00 p.m.
(Charlotte time) on the proposed borrowing date, (i) each Lender will make
available to the Administrative Agent, for the account of the Borrowers, at the
office of the Administrative Agent in funds immediately available to the
Administrative Agent, such Lender's Commitment Percentage of the Revolving
Credit Loans to be made on such borrowing date. The Borrowers hereby irrevocably
authorize the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 2.2 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrowers
identified in the most recent notice substantially in the form of Exhibit C
hereto (a "Notice of Account Designation") delivered by the Borrowers to the
Administrative Agent or as may be otherwise agreed upon by the Borrowers and the
Administrative Agent from time to time. Subject to Section 4.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2 to
the extent that any Lender has not made available to the Administrative Agent
its Commitment Percentage of such Revolving Credit Loan.
SECTION 2.3 Repayment of Revolving Credit Loans.
(a) Repayment on Termination Date. The Borrowers shall repay the
outstanding principal amount of all Revolving Credit Loans in full on the
Termination Date together with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Excess Revolving Credit Loans. If at any
time the outstanding principal amount of all Revolving Credit Loans exceeds the
Aggregate Commitment less the sum of all outstanding L/C Obligations, the
Borrowers shall repay immediately upon notice from the Administrative Agent, by
payment to the Administrative Agent for the account of the Lenders, an amount
equal to such excess with each such repayment applied first, to the principal
amount of outstanding Revolving Credit Loans and second, with respect to any
Letters of Credit then outstanding, a payment of cash collateral into a cash
collateral account opened by the Borrowers with the Administrative Agent, for
the benefit of the Lenders (such cash collateral to be applied in accordance
with Section 11.2(b)).
(c) Insurance Proceeds. Each Borrower shall make mandatory
prepayments of the Revolving Credit Loans in amounts equal to 100% of the Net
Cash Proceeds received by such Borrower or any of its Subsidiaries under any
policy of insurance, unless, so long as no Default or Event of Default has
occurred and is continuing, such proceeds are used or contractually committed to
be used by such Borrower or such Subsidiary, as applicable, within one hundred
eighty (180) days of the receipt of such Net Cash Proceeds to replace or repair
any of its assets damaged in connection with the related claims.
16
(d) Asset Sale Proceeds. Each Borrower shall make mandatory
prepayments of the Revolving Credit Loans in amounts equal to 100% of the Net
Cash Proceeds received by such Borrower or any of its Subsidiaries in connection
with the sale or disposition of any asset not permitted by Sections 10.6(a)-(d),
unless, so long as no Default or Event of Default has occurred and is
continuing, such proceeds are used or contractually committed to be used by such
Borrower or such Subsidiary, as applicable, within one hundred eighty (180) days
of the receipt of such Net Cash Proceeds to (A) make an acquisition or Capital
Expenditure which is otherwise permitted pursuant to the terms of this Agreement
or (B) pay any accrued tax liability incurred in connection with such asset
disposition.
(e) Debt and Equity Proceeds. Unless otherwise agreed in writing by
the Required Lenders, each Borrower shall make mandatory prepayments of the
Revolving Credit Loans in amounts equal to 100% of the Net Cash Proceeds
received by such Borrower or any of its Subsidiaries in connection with the
issuance of any Debt or equity securities by such Borrower.
(f) Optional Repayments. The Borrowers may at any time and from time
to time repay the Revolving Credit Loans, in whole or in part, upon at least
three (3) Business Days' irrevocable notice to the Administrative Agent with
respect to LIBOR Rate Loans and one (1) Business Day irrevocable notice with
respect to Base Rate Loans in the form attached hereto as Exhibit D (a "Notice
of Prepayment") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans or a combination thereof, and,
if of a combination thereof, the amount allocable to each. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date set forth in such notice. Partial repayments shall be in an aggregate
amount of $1,000,000 or a whole multiple of $250,000 in excess thereof with
respect to Base Rate Loans and $2,000,000 or a whole multiple of $500,000 in
excess thereof with respect to LIBOR Rate Loans. Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
(g) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may
not repay any LIBOR Rate Loan on any day other than on the last day of the
Interest Period applicable thereto unless such repayment is accompanied by any
amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.4 Revolving Credit Notes. Each Lender's Revolving Credit
Loans and the obligation of the Borrowers to repay such Revolving Credit Loans
shall be evidenced by a separate Revolving Credit Note executed by the Borrowers
payable to the order of such Lender representing the obligation of the Borrowers
to pay such Lender's Commitment or, if less, the aggregate unpaid principal
amount of all Revolving Credit Loans made and to be made by such Lender to the
Borrowers hereunder, plus interest and all other fees, charges and other amounts
due thereon. Each Revolving Credit Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.1.
17
SECTION 2.5 Permanent Reduction of the Aggregate Commitment. The
Borrowers shall have the right at any time and from time to time, upon at least
five (5) Business Days prior written notice to the Administrative Agent, to
permanently reduce, without premium or penalty, (i) the entire Aggregate
Commitment at any time or (ii) portions of the Aggregate Commitment, from time
to time, in an aggregate principal amount not less than $2,000,000 or any whole
multiple of $1,000,000 in excess thereof. Each permanent reduction permitted or
pursuant to this Section 2.5 shall be accompanied by a payment of principal
sufficient to reduce the aggregate outstanding Extensions of Credit of the
Lenders after such reduction to the Aggregate Commitment as so reduced and if
the Aggregate Commitment as so reduced is less than the aggregate amount of all
outstanding Letters of Credit, the Borrowers shall be required to deposit in a
cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all outstanding Obligations (and furnishing of cash collateral satisfactory to
the Administrative Agent for all L/C Obligations) and shall result in the
termination of the Commitments and Credit Facility. Such cash collateral shall
be applied in accordance with Section 11.2(b). If the reduction of the Aggregate
Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall
be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.6 Termination of Credit Facility. Until such date as the
Borrowers secure the appropriate Governmental Approvals to permit the Credit
Facility to have a stated maturity date of five (5) years or more after the
Closing Date, the Credit Facility shall terminate on the earliest of (a)
December 31, 2000, (b) the date of termination by the Borrowers pursuant to
Section 2.5, and (c) the date of termination by the Administrative Agent on
behalf of the Lenders pursuant to Section 11.2(a); provided, that CT, on behalf
of the Borrowers may request two (2) separate two-year extensions of the date
set forth in clause (a) of the first paragraph of this Section 2.6 by providing
the Administrative Agent and each of the Lenders with a written request for such
extension not more than ninety (90) days and not fewer than sixty (60) days
prior to the then existing Termination Date; provided further, that (A) CT shall
not request more than two (2) extensions, (B) the Termination Date shall not in
any event extend beyond December 31, 2004 and (C) each such extension shall be
subject to the satisfaction of the Borrowers of each of the conditions set forth
in Section 5.3 on the then existing Termination Date. Each of the Lenders shall
provide written notice to the Administrative Agent on or prior to the thirtieth
(30th) day (the "Consent Date") before the then existing Termination Date of its
desire to extend (any such Lender, a "Consenting Lender") or not to so extend
(any such Lender, a "Non-Consenting Lender") such date.
No Lender shall be under any obligation or commitment to extend such
date and no such obligation or commitment on the part of any Lender shall be
inferred from the provisions of this
18
Section 2.6. Failure on the part of any Lender to respond to such request by the
required date set forth above shall be deemed to be a denial by such Lender of
such request and all Revolving Credit Loans of such Non-Consenting Lender shall
be subject to the then existing Termination Date. If Lenders holding Commitment
Percentages aggregating less than one hundred percent (100%) of the Commitments
consent to such extension, CT, on behalf of the Borrowers, may elect by written
notice to the Administrative Agent and Lenders to (i) continue the Revolving
Credit Facility for such additional period with an Aggregate Commitment equal to
the then effective Aggregate Commitment less the total Commitments of the
Non-Consenting Lenders or (ii) require any such Non-Consenting Lender to
transfer and assign without recourse (in accordance with the provisions of
Section 13.10) its Commitment and other interests, rights and obligations under
this Agreement to an Eligible Assignee (who consents thereto), which shall
assume such obligations upon its consent to assume such obligations; provided
that (A) no such assignment shall conflict with any Applicable Law, (B) such
assignment shall be at the cost and expense of the Borrowers and (C) the
purchase price to be paid to such Non-Consenting Lender shall be an amount equal
to the outstanding principal amount of the Loans of such NonConsenting Lender
plus all interest accrued and unpaid thereon and all other amounts owing to such
Non-Consenting Lender thereon. The Administrative Agent shall provide a written
list of the Consenting Lenders and Non-Consenting Lenders to the Borrowers and
the Lenders promptly following the Consent Date (but in no event less than
twenty (20) days prior to the existing Termination Date). If the extension is
granted, upon the then existing Termination Date, such Termination Date shall be
extended to the date which is two years thereafter.
Notwithstanding the foregoing, upon the date the Borrowers receive
Governmental Approval to permit the Credit Facility to have a stated maturity
date of five (5) years or more after the Closing Date, (a) all right of the
Borrowers to request extensions of the Termination Date pursuant to this section
2.6 shall be immediately and automatically terminated (including all such
pending requests which have not yet been fully consummated by the date of such
Governmental Approval) and (b) the date referred to in clause (a) of the first
paragraph at this Section 2.6 shall be deemed to be December 31, 2003.
SECTION 2.7 Use of Proceeds. The Borrowers shall use the proceeds of
the Extensions of Credit (a) to finance Capital Expenditures and acquisitions
which are otherwise permitted pursuant to the terms of this Agreement, (b) to
refinance existing indebtedness, and (c) for working capital and general
corporate requirements of the Borrowers and their Subsidiaries, including the
payment of certain fees and expenses incurred in connection with the
transactions contemplated hereby.
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ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters
of Credit") for the account of the Borrowers on a joint and several basis on any
Business Day from the Closing Date through but not including the Termination
Date in such form as may be approved from time to time by the Issuing Lender;
provided, that the Issuing Lender shall have no obligation to issue any Letter
of Credit if, after giving effect to such issuance, (a) the L/C Obligations
would exceed the lesser of (i) the Aggregate Commitment less the sum of all
outstanding Revolving Credit Loans and (ii) the L/C Commitment or (b) the
Available Commitment of any Lender would be less than zero. Each Letter of
Credit shall (i) be denominated in Dollars in a minimum amount of $100,000, (ii)
be a standby letter of credit issued to support obligations of the Borrowers or
any of their Subsidiaries, contingent or otherwise, incurred in the ordinary
course of business, (iii) expire on a date reasonably satisfactory to the
Issuing Lender, which date shall be no later than the Termination Date and (iv)
be subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of North Carolina. The Issuing Lender shall not at any
time be obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law. References herein to "issue" and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The
Borrowers may from time to time request that the Issuing Lender issue a Letter
of Credit by delivering to the Issuing Lender at the Administrative Agent's
Office an Application therefor, completed to the satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may request. Upon receipt of any Application, the Issuing
Lender shall process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall, subject to Section 3.1 and Article V
hereof, promptly issue the Letter of Credit requested thereby (but in no event
shall the Issuing Lender be required to issue any Letter of Credit earlier than
three (3) Business Days after its receipt of the Application therefor and all
such other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Lender and the Borrowers.
The Issuing Lender shall promptly furnish to the Borrowers a copy of such Letter
of Credit and promptly notify each Lender of the issuance and upon request by
any Lender, furnish to such Lender a copy of such Letter of Credit and the
amount of such Lender's participation therein.
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SECTION 3.3 Commissions and Other Charges.
(a) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit in an amount equal to 1.00%
percent on a per annum basis on the face amount of such Letter of Credit. Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Termination Date. The Administrative Agent
shall, promptly following its receipt thereof, distribute to the Issuing Lender
and the L/C Participants all commissions received by the Administrative Agent in
accordance with their respective Commitment Percentages.
(b) In addition to the foregoing commission, the Borrowers shall pay
to the Issuing Lender an issuance fee of 0.125% percent per annum on the face
amount of each Letter of Credit, payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Termination Date.
(c) In addition to the foregoing commissions, the Borrowers shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrowers in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date.
21
If any such amount is paid to the Issuing Lender after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand, in addition
to such amount, the product of (i) such amount, times (ii) the daily average
Federal Funds Rate as determined by the Administrative Agent during the period
from and including the date such payment is due to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360. A certificate of the Issuing Lender with
respect to any amounts owing under this Section 3.4(b) shall be conclusive in
the absence of manifest error. With respect to payment to the Issuing Lender of
the unreimbursed amounts described in this Section 3.4(b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such payment
shall be due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.4, the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from any Borrower or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
share thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrowers. The Borrowers
joint and severally agree to reimburse the Issuing Lender on each date on which
the Issuing Lender notifies the Borrowers of the date and amount of a draft paid
under any Letter of Credit for the amount of (a) such draft so paid and (b) any
taxes, fees, charges or other costs or expenses incurred by the Issuing Lender
in connection with such payment. Each such payment shall be made to the Issuing
Lender at its address for notices specified herein in lawful money of the United
States and in immediately available funds. Interest shall be payable on any and
all amounts remaining unpaid by the Borrowers under this Article III from the
date such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue. If the Borrowers fail to
timely reimburse the Issuing Lender on the date the Borrowers receive the notice
referred to in this Section 3.5, the Borrowers shall be deemed to have timely
given a Notice of Borrowing hereunder to the Administrative Agent requesting the
Lenders to make a Base Rate Loan on such date in an amount equal to the amount
of such drawing and, regardless of whether or not the conditions precedent
specified in Article V have been satisfied, the Lenders shall make Base Rate
Loans in such amount, the proceeds of which shall be applied to reimburse the
Issuing Lender for the amount of the related drawing and costs and expenses.
SECTION 3.6 Obligations Absolute. The obligations of the Borrowers
under this Article III (including without limitation the Reimbursement
Obligation) shall be absolute and
22
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrowers may have or have had
against the Issuing Lender or any beneficiary of a Letter of Credit. The
Borrowers also agree with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Reimbursement Obligation of the Borrowers under
Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrowers and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrowers against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrowers agree that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC,
shall be binding on the Borrowers and shall not result in any liability of the
Issuing Lender to the Borrowers. The responsibility of the Issuing Lender to the
Borrowers in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision
of any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
4.1, at the election of CT on behalf of the Borrowers, the aggregate principal
balance of the Revolving Credit Notes or any portion thereof shall bear interest
at (i) the Base Rate plus the Applicable Margin as set forth in Section 4.1(c)
or (ii) the LIBOR Rate plus the Applicable Margin as set forth in Section
4.1(c); provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date. The Borrowers shall select the rate of
interest and Interest Period, if any, applicable to any Revolving Credit Loan at
the time a Notice of Borrowing is given pursuant to Section 2.2 or at the time a
Notice of Conversion/Continuation is given pursuant to Section 4.2. Each
Revolving Credit Loan or portion thereof bearing interest based on the
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Base Rate shall be a "Base Rate Loan", each Revolving Credit Loan or portion
thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan."
Any Revolving Credit Loan or any portion thereof as to which the Borrowers have
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, CT on
behalf of the Borrowers, by giving notice at the times described in Section
4.1(a), shall elect an interest period (each, an "Interest Period") to be
applicable to such Revolving Credit Loan, which Interest Period shall be a
period of one (1), two (2), three (3), or six (6) months with respect to each
LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of
advance of or conversion to any LIBOR Rate Loan and, in the case of
immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding
Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided, that if any Interest
Period with respect to a LIBOR Rate Loan would otherwise expire on a
day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Business Day of the relevant calendar month at the end of such
Interest Period;
(iv) no Interest Period shall extend beyond the
Termination Date; and
(v) there shall be no more than eight (8) Interest
Periods outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Revolving Credit Loans (the "Applicable Margin")
shall (i) on the Closing Date equal the percentages set forth in the certificate
delivered pursuant to Section 5.2(d)(ii) and (ii) for each fiscal quarter
thereafter be determined by reference to the Leverage Ratio as of the end of the
fiscal quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate as follows:
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Applicable Margin Per Annum
Leverage Ratio Base Rate LIBOR Rate
-------------- ------------------------------
Greater than or equal to
3.50 to 1.00 0.150% 1.150%
Greater than or equal to
3.00 to 1.00, but less than
3.50 to 1.00 0.000% 1.000%
Greater than or equal to
2.50 to 1.00, but less than
3.00 to 1.00 0.000% 0.875%
Greater than or equal to
2.00 to 1.00, but less than
2.50 to 1.00 0.000% 0.750%
Less than
2.00 to 1.00 0.000% 0.500%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the fifth (5th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Borrowers and
their Subsidiaries and the accompanying Officer's Compliance Certificate setting
forth the Leverage Ratio of the Borrowers and their Subsidiaries as of the most
recent fiscal quarter end. Subject to Section 4.1(d), in the event the Borrowers
fail to deliver such financial statements and certificate within the time
required by Section 7.2 hereof, the Applicable Margin shall be the highest
Applicable Margin set forth above until the fifth (5th) Business Day after
receipt by the Administrative Agent of such financial statements and
certificate.
(d) Default Rate. At the discretion of the Administrative Agent and
Required Lenders, upon the occurrence and during the continuance of an Event of
Default, (i) the Borrowers shall no longer have the option to request LIBOR Rate
Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per
annum two percent (2%) in excess of the rate then applicable to LIBOR Rate
Loans, as applicable, until the end of the applicable Interest Period and
thereafter at a rate equal to two percent (2%) in excess of the rate then
applicable to Base Rate Loans, and (iii) all outstanding Base Rate Loans shall
bear interest at a rate per annum equal to two percent (2%) in excess of the
rate then applicable to Base Rate Loans. Interest shall continue to accrue on
the Revolving Credit Notes after the filing by or against any Borrower of any
petition seeking
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any relief in bankruptcy or under any act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate
Loan shall be payable in arrears on the last Business Day of each calendar
quarter commencing December 31, 1998; and interest on each LIBOR Rate Loan shall
be payable on the last day of each Interest Period applicable thereto, and if
such Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. Interest on LIBOR Rate Loans and all
fees payable hereunder shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed and interest on Base Rate Loans
shall be computed on the basis of a 365/66-day year and assessed for the actual
number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Revolving
Credit Notes charged or collected pursuant to the terms of this Agreement or
pursuant to any of the Revolving Credit Notes exceed the highest rate
permissible under any Applicable Law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that the Lenders have charged or received interest hereunder
in excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by Applicable Law and the
Lenders shall at the Administrative Agent's option (i) promptly refund to the
Borrowers any interest received by the Lenders in excess of the maximum lawful
rate or (ii) shall apply such excess to the principal balance of the
Obligations. It is the intent hereof that the Borrowers not pay or contract to
pay, and that neither the Administrative Agent nor any Lender receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by the Borrowers under Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of
Loans. Provided that no Event of Default has occurred and is then continuing,
the Borrowers shall have the option to (a) convert at any time following the
third Business Day after the Closing Date all or any portion of its outstanding
Base Rate Loans in a principal amount equal to $2,000,000 or any whole multiple
of $500,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the
expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $1,000,000 or a
whole multiple of $250,000 in excess thereof into Base Rate Loans or (ii)
continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers
desire to convert or continue Revolving Credit Loans as provided above, CT on
behalf of the Borrowers shall give the Administrative Agent irrevocable prior
written notice in the form attached as Exhibit E (a "Notice of Conversion/
Continuation") not later than 11:00 a.m. (Charlotte time) three (3) Business
Days before the day on which a proposed conversion or continuation of such
Revolving Credit Loan is to be effective specifying (A) the Revolving Credit
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Revolving Credit Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
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SECTION 4.3 Fees.
(a) Commitment Fee. The Borrowers shall pay to the Administrative
Agent, for the account of the Lenders, a non-refundable commitment fee at a rate
per annum equal to 0.25% on the average daily unused portion of the Aggregate
Commitment. The commitment fee shall be payable in arrears on the last Business
Day of each calendar quarter during the term of this Agreement commencing
December 31, 1998, and on the Termination Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Commitment Percentages.
(b) Administrative Agent's and Other Fees. In order to compensate
the Administrative Agent for structuring and syndicating the Revolving Credit
Loans and for its obligations hereunder, the Borrowers agree to pay to the
Administrative Agent, for its account, the fees set forth in the separate fee
letter agreement executed by CT, on behalf of itself and the other Borrowers and
the Administrative Agent dated October 6, 1998.
SECTION 4.4 Manner of Payment. Each payment by the Borrowers on
account of the principal of or interest on the Revolving Credit Loans or of any
fee, commission or other amounts (including the Reimbursement Obligation)
payable to the Lenders under this Agreement or any Revolving Credit Note shall
be made not later than 1:00 p.m. (Charlotte time) on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office for the account of the Lenders (other than as set forth below)
pro rata in accordance with their respective Commitment Percentages (except as
specified below), in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 2:00 p.m. (Charlotte time) on such day shall be
deemed a payment on such date for the purposes of Section 11.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 2:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth
herein its pro rata share of such payment in accordance with such Lender's
Commitment Percentage (except as specified below) and shall wire advice of the
amount of such credit to each Lender. Each payment to the Administrative Agent
of the Issuing Lender's fees or L/C Participants' commissions shall be made in
like manner, but for the account of the Issuing Lender or the L/C Participants,
as the case may be. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
27
Agent and any amount payable to any Lender under Sections 4.8, 4.9, 4.10, 4.11
or 13.2 shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 4.1(b)(ii) if any payment under this
Agreement or any Revolving Credit Note shall be specified to be made upon a day
which is not a Business Day, it shall be made on the next succeeding day which
is a Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that
the Borrowers shall fail to pay any of the Obligations when due and the
Obligations have been accelerated pursuant to Section 11.2, all payments
received by the Lenders upon the Revolving Credit Notes and the other
Obligations and all net proceeds from the enforcement of the Obligations shall
be applied first to all expenses then due and payable by the Borrowers
hereunder, then to all indemnity obligations then due and payable by the
Borrowers hereunder, then to all Administrative Agent's and Issuing Lender's
fees then due and payable, then to all commitment and other fees and commissions
then due and payable, then to accrued and unpaid interest on the Revolving
Credit Notes, the Reimbursement Obligation and any termination payments due in
respect of a Hedging Agreement with any Lender (which Hedging Agreement is
permitted or required hereunder) (pro rata in accordance with all such amounts
due), then to the principal amount of the Revolving Credit Notes and
Reimbursement Obligation (pro rata in accordance with all such amounts due) and
then to the cash collateral account described in Section 11.2(b) hereof to the
extent of any L/C Obligations then outstanding, in that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or interest thereon, or if any Lender shall at any time receive any collateral
in respect to the Obligations owing to it (whether voluntarily or involuntarily,
by set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrowers agree that each Lender so purchasing a portion of another Lender's
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Revolving Credit Loans and issue or participate
in Letters of Credit are several and are not joint or joint and several. Unless
the Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent
28
on the proposed borrowing date in accordance with Section 2.2(b) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount not made available by such Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section shall be conclusive, absent manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make available its Commitment Percentage
of any Revolving Credit Loan requested by the Borrowers shall not relieve it or
any other Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Revolving Credit Loan available on the borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Revolving Credit Loan available on the borrowing
date.
SECTION 4.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect
to any Interest Period the Administrative Agent or any Lender (after
consultation with Administrative Agent) shall determine that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars, in the applicable amounts are not being quoted via
Telerate Page 3750 or offered to the Administrative Agent or such Lender for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Borrowers. Thereafter, until the Administrative Agent notifies
the Borrowers that such circumstances no longer exist (which notification shall
be given promptly, but in any event within thirty (30) days after the
Administrative Agent obtains actual knowledge that such circumstances no longer
exist), the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrowers to convert any Revolving Credit Loan to or continue any Revolving
Credit Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers shall
repay in full (or cause to be repaid in full) the then outstanding principal
amount of each such LIBOR Rate Loan together with accrued interest thereon, on
the last day of the then current Interest Period applicable to such LIBOR Rate
Loan or convert the then outstanding principal amount of each such LIBOR Rate
Loan to a Base Rate Loan as of the last day of such Interest Period.
29
(b) Laws Affecting LIBOR Rate Availability. If, after the date
hereof, the introduction of, or any change in, any Applicable Law or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) with
any request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, shall make it
unlawful or impossible for any of the Lenders (or its Lending Office) to honor
its obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender
shall promptly give notice thereof to the Administrative Agent and the
Administrative Agent shall promptly give notice to the Borrowers and the other
Lenders. Thereafter, until the Administrative Agent notifies the Borrowers that
such circumstances no longer exist (which notification shall be given promptly,
but in any event within thirty (30) days after the Administrative Agent obtains
actual knowledge that such circumstances no longer exist), (i) the obligations
of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to
convert any Revolving Credit Loan or continue any Revolving Credit Loan as a
LIBOR Rate Loan shall be suspended and thereafter the Borrowers may select only
Base Rate Loans hereunder, and (ii) if any of the Lenders may not lawfully
continue to maintain a LIBOR Rate Loan to the end of the then current Interest
Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan
shall immediately be converted to a Base Rate Loan for the remainder of such
Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of,
or any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or its Lending Office) with any request or directive (whether or not
having the force of law) of such Governmental Authority, central bank or
comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with
respect to any Revolving Credit Note, Letter of Credit or
Application or shall change the basis of taxation of payments to any
of the Lenders (or its Lending Office) of the principal of or
interest on any Revolving Credit Note, Letter of Credit or
Application or any other amounts due under this Agreement in respect
thereof (except for changes in the rate of tax on the overall net
income of any of the Lenders or its Lending Office imposed by the
jurisdiction in which such Lender is organized or is or should be
qualified to do business or such Lending Office is located); or
30
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit, insurance
or capital or similar requirement against assets of, deposits with
or for the account of, or credit extended by any of the Lenders (or
its Lending Office) or shall impose on any of the Lenders (or its
Lending Office) or the foreign exchange and interbank markets any
other condition affecting any Revolving Credit Note; and the result
of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or
participating in Letters of Credit or to reduce the yield or amount
of any sum received or receivable by any of the Lenders under this
Agreement or under the Revolving Credit Notes in respect of a LIBOR
Rate Loan or Letter of Credit or Application, then such Lender shall
promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrowers of such fact and demand
compensation therefor and, within fifteen (15) days after such
notice by the Administrative Agent, the Borrowers shall pay to such
Lender such additional amount or amounts as will compensate such
Lender or Lenders for such increased cost or reduction. The
Administrative Agent will promptly notify the Borrowers of any event
of which it has knowledge which will entitle such Lender to
compensation pursuant to this Section 4.8(c); provided, that the
Administrative Agent shall incur no liability whatsoever to the
Lenders or the Borrowers in the event it fails to do so. The amount
of such compensation shall be determined, in the applicable Lender's
sole discretion, based upon the assumption that such Lender funded
its Commitment Percentage of the LIBOR Rate Loans in the London
interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrowers through the Administrative Agent and
shall be conclusively presumed to be correct save for manifest
error.
SECTION 4.9 Indemnity. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Revolving Credit Loan (a) as a consequence of any
failure by the Borrowers to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of the
Borrowers to borrow on a date specified therefor in a Notice of Borrowing or
Notice of Conversion/Continuation or (c) due to any payment, prepayment or
conversion of any LIBOR Rate Loan on a date other than the last day of the
Interest Period therefor. The amount of such loss or expense shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrowers through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
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SECTION 4.10 Capital Requirements. If either (a) the introduction
of, or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which the Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 4.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrowers
hereunder or under the Revolving Credit Notes or the Letters of Credit shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholding, and all liabilities
with respect thereto excluding, (i) in the case of each Lender and the
Administrative Agent, income and franchise taxes imposed by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized or is or should be qualified to do business or any political
subdivision thereof and (ii) in the case of each Lender, income and franchise
taxes imposed by the jurisdiction of such Lender's Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrowers shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Revolving Credit Note or
Letter of Credit to any Lender or the Administrative Agent, (A) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.11) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the amount such party would have received had no
such deductions been made, (B) the Borrowers shall make such deductions, (C) the
Borrowers shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (D) the Borrowers shall
deliver to the Administrative Agent evidence of such payment to the relevant
taxing authority or other authority in the manner provided in Section 4.11(d).
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(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Revolving Credit Loans, the Letters of Credit, the other Loan Documents, or the
perfection of any rights or security interest in respect thereto (hereinafter
referred to as "Other Taxes").
(c) Indemnity. The Borrowers shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor. The Administrative Agent and the Lenders hereby agree to use
reasonable efforts, at the expense of the Borrowers, to obtain a refund of any
such Taxes or Other Taxes which were not correctly or legally asserted.
(d) Evidence of Payment. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment reasonably satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrowers, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrowers,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrowers and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
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(f) Survival. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 4.11 shall survive the payment in full of
the Obligations and the termination of the Commitments.
SECTION 4.12 Change in Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Sections 4.8, 4.9,
4.10 or 4.11 with respect to such Lender, it will use its best efforts to
designate another lending office as its Lending Office for any Loans affected by
such event with the intent of avoiding the consequence of the event giving rise
to the operation of any such Section; provided, that such designation is made on
such terms that such Lender and its Lending Office suffer no economic, legal or
regulatory disadvantage as a consequence thereof.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 Closing. The closing shall take place at the offices of
Kennedy, Covington, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on December 31,
1998, or on such other date as the parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit.
The obligation of the Lenders to close this Agreement and to make the initial
Revolving Credit Loan or issue the initial Letter of Credit is subject to the
satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit
Notes, and the other Loan Documents shall have been duly authorized, executed
and delivered to the Administrative Agent by the parties thereto, shall be in
full force and effect and no default shall exist thereunder, and the Borrowers
shall have delivered original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrowers. The
Administrative Agent shall have received a certificate from a
Responsible Officer, in form and substance reasonably satisfactory
to the Administrative Agent, to the effect that all
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representations and warranties of the Borrowers contained in this
Agreement and the other Loan Documents are true, correct and
complete; that the Borrowers are not in violation of any of the
covenants contained in this Agreement and the other Loan Documents;
that, after giving effect to the transactions contemplated by this
Agreement, no Default or Event of Default has occurred and is
continuing; and that the Borrowers have satisfied each of the
closing conditions.
(ii) Certificate of Secretary of each Borrower. The
Administrative Agent shall have received a certificate of the
secretary or assistant secretary of each Borrower certifying as to
the incumbency and genuineness of the signature of each officer of
such Borrower executing Loan Documents to which it is a party and
certifying that attached thereto is a true, correct and complete
copy of (A) the articles of incorporation of such Borrower and all
amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation, (B) the
bylaws of such Borrower as in effect on the date of such
certification, (C) resolutions duly adopted by the Board of
Directors of such Borrower authorizing the borrowings contemplated
hereunder and the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party, and
(D) each certificate required to be delivered pursuant to Section
5.2(b)(iii).
(iii) Certificates of Good Standing. To the extent
requested by the Administrative Agent, the Administrative Agent
shall have received long-form certificates as of a recent date of
the good standing of each Borrower under the laws of its
jurisdiction of organization and each other jurisdiction where such
Borrower is qualified to do business and a certificate of the
relevant taxing authorities of such jurisdictions certifying that
such Borrower has filed required tax returns and owes no delinquent
taxes.
(iv) Opinions of Counsel. The Administrative Agent shall
have received favorable opinions of counsel to the Borrowers
addressed to the Administrative Agent and the Lenders with respect
to the Borrowers, the Loan Documents and such other matters as the
Lenders shall reasonably request.
(v) Tax Forms. The Administrative Agent shall have
received copies of the United States Internal Revenue Service forms
required by Section 4.11(e) hereof.
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. The
Borrowers shall have obtained all necessary approvals,
authorizations and consents of any Person and of all Governmental
Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan
Documents.
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(ii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted,
threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect
of, or which is related to or arises out of this Agreement or the
other Loan Documents or the consummation of the transactions
contemplated hereby or thereby.
(iii) No Event of Default. No Default or Event of
Default shall have occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Administrative Agent shall
have received the most recent audited Consolidated financial
statements of the Borrowers and their Subsidiaries, all in form and
substance reasonably satisfactory to the Administrative Agent.
(ii) Financial Condition Certificate. The Borrowers
shall have delivered to the Administrative Agent a certificate, in
form and substance reasonably satisfactory to the Administrative
Agent, and certified as accurate by a Responsible Officer, that (A)
the Borrowers and their Subsidiaries are Solvent, (B) the material
payables of the Borrowers are current and not past due, (C) attached
thereto is a pro forma balance sheet of the Borrowers and their
Subsidiaries setting forth on a pro forma basis the financial
condition of the Borrowers and their Subsidiaries on a Consolidated
basis as of the Closing Date, reflecting a pro forma basis the
effect of the transactions contemplated herein, including all fees
and expenses in connection therewith, and evidencing compliance on a
pro forma basis with the covenants contained in Articles IX and X
hereof, (D) attached thereto are the financial projections
previously delivered to the Administrative Agent representing the
good faith opinions of the Borrowers and senior management thereof
as to the projected results contained therein and (E) attached
thereto is a calculation of the Applicable Margin pursuant to
Section 4.1(c).
(iii) Payment at Closing; Fee Letters. The Borrowers
shall have paid the fees set forth or referenced in Section 4.3 and
any other accrued and unpaid fees or commissions due hereunder
(including, without limitation, reasonable legal fees and expenses)
to the Administrative Agent and Lenders, and to any other Person
such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and
other charges in connection with the execution, delivery, recording,
filing and registration of any of the Loan Documents. The
Administrative Agent shall have received duly authorized and
executed copies of the fee letter agreement referred to in Section
4.3(b).
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(e) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall
have received from CT on behalf of the Borrowers a Notice of
Borrowing in accordance with Section 2.2(a), and a Notice of Account
Designation specifying the account or accounts to which the proceeds
of any Revolving Credit Loans made after the Closing Date are to be
disbursed.
(ii) Proceedings and Documents. All opinions,
certificates and other instruments and all proceedings in connection
with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Lenders. The
Lenders shall have received copies of all other instruments and
other evidence as the Lender may reasonably request, in form and
substance reasonably satisfactory to the Lenders, with respect to
the transactions contemplated by this Agreement and the taking of
all actions in connection therewith.
(iii) Due Diligence and Other Documents. The Borrowers
shall have delivered to the Administrative Agent such other
documents, certificates and opinions as the Administrative Agent may
reasonably request.
SECTION 5.3 Conditions to All Extensions of Credit. The obligations
of the Lenders to make any Extensions of Credit is subject to the satisfaction
of the following conditions precedent on the relevant borrowing or issuance
date, as applicable:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VI shall be true and correct
on and as of such borrowing or issuance date with the same effect as if made on
and as of such date; except for any representation and warranty made as of an
earlier date, which representation and warranty shall remain true and correct as
of such earlier date.
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Revolving Credit Loan or after giving effect to the Revolving Credit Loans
to be made on such date or (ii) or the issuance date with respect to such Letter
of Credit to be issued or after giving affect to such Letters of Credit on such
date.
(c) Officer's Compliance Certificate; Additional Documents. The
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 6.1 Representations and Warranties. To induce the
Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make Extensions of Credit, each Borrower hereby represents and
warrants to the Administrative Agent and the Lenders that:
(a) Organization; Power; Qualification. Each Borrower and each
Subsidiary thereof is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, has the
power and authority to own its properties and to carry on its business as now
being conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization except where the failure
to be so qualified could not reasonably be expected to have a Material Adverse
Effect. The jurisdictions in which each Borrower and each Subsidiary thereof are
organized and qualified to do business as of the Closing Date are described on
Schedule 6.1(a).
(b) Ownership. Each Subsidiary of each Borrower as of the Closing
Date is listed on Schedule 6.1(b). As of the Closing Date, the capitalization of
each Borrower and each Subsidiary thereof consists of the number of shares,
authorized, issued and outstanding, of such classes and series, with or without
par value, described on Schedule 6.1(b). All outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable. The
shareholders of the Subsidiaries of each Borrower and the number of shares owned
by each as of the Closing Date are described on Schedule 6.1(b). As of the
Closing Date, there are no outstanding stock purchase warrants, subscriptions,
options, securities, instruments or other rights of any type or nature
whatsoever, which are convertible into, exchangeable for or otherwise provide
for or permit the issuance of capital stock of any Borrower or any Subsidiary
thereof, except as described on Schedule 6.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each
Borrower and each Subsidiary thereof has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of each Borrower and each Subsidiary thereof party
thereto, and each such document constitutes the legal, valid and binding
obligation of each Borrower or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable remedies.
38
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by each Borrower and each
Subsidiary thereof of the Loan Documents to which each such Person is a party,
in accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to any Borrower or any Subsidiary thereof,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of any
Borrower or any Subsidiary thereof or any Material Contract to which such Person
is a party or by which any of its properties may be bound or any Governmental
Approval relating to such Person, or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any material property now owned
or hereafter acquired by such Person other than Liens arising under the Loan
Documents.
(e) Compliance with Law; Governmental Approvals. Each Borrower and
each Subsidiary thereof (i) has all material Governmental Approvals required by
any Applicable Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the best of such Borrower's knowledge, threatened
attack by direct or collateral proceeding, and (ii) is in material compliance
with each material Governmental Approval applicable to each Borrower and each
Subsidiary thereof and is in material compliance with all other material
Applicable Laws relating to it or any of its respective properties.
(f) Tax Returns and Payments. Each Borrower and each Subsidiary
thereof has duly filed or caused to be filed all federal, state, local and other
tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable, except where the payment
of such tax is being disputed in good faith and adequate reserves have been
established in accordance with GAAP. No Governmental Authority has asserted any
Lien or other claim against any Borrower or any Subsidiary thereof with respect
to material unpaid taxes which has not been discharged or resolved or is not
being contested in good faith and for which adequate reserves have been
established in accordance with GAAP. The charges, accruals and reserves on the
books of each Borrower and each Subsidiary thereof in respect of federal, state,
local and other taxes for all Fiscal Years and portions thereof since the
organization of such Borrower and each Subsidiary thereof are in the judgment of
each such Borrower adequate, and each such Borrower does not anticipate any
additional material taxes or assessments for any of such years.
(g) Intellectual Property Matters. Each Borrower and each Subsidiary
thereof owns or possesses rights to use all material franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade
39
names, trade name rights, copyrights and rights with respect to the foregoing
which are required to conduct its business. No event has occurred which permits,
or after notice or lapse of time or both would permit, the revocation or
termination of any such rights, and no Borrower nor any Subsidiary thereof is
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations.
(h) Environmental Matters.
(i) The properties of each Borrower and each Subsidiary
thereof do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations
which (A) constitute or constituted a violation of applicable
Environmental Laws or (B) could give rise to liability under
applicable Environmental Laws, except where such violation or
liability could not reasonably be expected to result in a Material
Adverse Effect;
(ii) Such properties and all operations conducted in
connection therewith are in compliance, and have been in compliance,
with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations
which could interfere with the continued operation of such
properties, except where the failure to so comply or the existence
of such contamination could not reasonably be expected to result in
a Material Adverse Effect;
(iii) No Borrower nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of their
properties or the operations conducted in connection therewith, nor
does any Borrower or any Subsidiary thereof have knowledge or reason
to believe that any such notice will be received or is being
threatened, except where such notice could not reasonably be
expected to result in a Material Adverse Effect;
(iv) To the best knowledge of the Borrowers and their
Subsidiaries, Hazardous Materials have not been transported or
disposed of from the properties of any Borrower or any Subsidiary
thereof in violation of, or in a manner or to a location which could
give rise to liability under, Environmental Laws, nor since the date
of acquisition of such property by any Borrower or its Subsidiary
thereof, have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in
violation of, or in a manner that could give rise to liability
under, any applicable Environmental Laws, except where any such
event could not reasonably be expected to result in a Material
Adverse Effect;
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of any
Borrower, threatened, under any Environmental
40
Law to which any Borrower or any Subsidiary thereof is or is
expected to be named as a party with respect to such properties or
operations conducted in connection therewith, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
such properties or such operations, except where any such event
could not reasonably be expected to result in a Material Adverse
Effect; and
(vi) Since the date of the acquisition of any property,
there has been no release, or to the best of any Borrower's
knowledge, the threat of release, of Hazardous Materials at or from
such properties, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws, except where
such release could not reasonably be expected to result in a
Material Adverse Effect.
(i) ERISA.
(i) As of the Closing Date, no Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under,
any Employee Benefit Plans other than those identified on Schedule
6.1(i);
(ii) Each Borrower and each ERISA Affiliate is in
material compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to
all Employee Benefit Plans except for any required amendments for
which the remedial amendment period as defined in Section 401(b) of
the Code has not yet expired. Each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code (A) has
been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt
under Section 501(a) of the Code or (B) is within the remedial
amendment period as defined in Section 401(b) of the Code as to the
initial adoption of such Employee Benefit Plan. No liability has
been incurred by any Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the
Code) been incurred (without regard to any waiver granted under
Section 412 of the Code), nor has any funding waiver from the
Internal Revenue Service been received or requested with respect to
any Pension Plan, nor has any Borrower or any ERISA Affiliate failed
to make any contributions or to pay any amounts due and owing as
required by Section 412 of the Code, Section 302 of ERISA or the
terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;
41
(iv) No Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code, (B) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid,
(C) failed to make a required contribution or payment to a
Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) No material proceeding, claim, lawsuit and/or
investigation is existing or, to the best knowledge of any Borrower
after due inquiry, threatened concerning or involving any (A)
employee welfare benefit plan (as defined in Section 3(1) of ERISA)
currently maintained or contributed to by any Borrower or any ERISA
Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. No Borrower nor any Subsidiary thereof is engaged
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used in Regulation U of the Board of Governors of the Federal
Reserve System). No part of the proceeds of any of the Revolving Credit Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation T, U or X of such Board of Governors.
(k) Government Regulation. No Borrower nor any Subsidiary thereof is
an "investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and no Borrower nor any Subsidiary thereof is, or after giving effect
to any Extension of Credit will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which materially limits its ability to
incur or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrowers and their Subsidiaries
in effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 6.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. The Borrowers have delivered to the Administrative Agent a true and
complete copy of each Material Contract required to be listed on Schedule
6.1(l).
42
(m) Employee Relations. Each Borrower and each Subsidiary thereof
has a stable work force in place and is not, as of the Closing Date, party to
any collective bargaining agreement nor has any labor union been recognized as
the representative of its employees except as set forth on Schedule 6.1(m). No
Borrower knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) Burdensome Provisions. No Borrower nor any Subsidiary thereof is
a party to any indenture, agreement, lease or other instrument, or subject to
any corporate or partnership restriction, Governmental Approval or Applicable
Law which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. No Borrower nor any
Subsidiary thereof presently anticipates that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The (i) audited Consolidated balance
sheets of the Borrowers and their Subsidiaries as of December 31, 1997 and the
related statements of income and retained earnings and cash flows for the Fiscal
Years then ended and (ii) unaudited Consolidated balance sheet of the Borrowers
and their Subsidiaries as of September 30, 1998 and related unaudited interim
statements of income and retained earnings, copies of which have been furnished
to the Administrative Agent and each Lender, are complete and correct and fairly
present the assets, liabilities and financial position of the Borrowers and
their Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended (except in the case of
unaudited statements to changes resulting from normal year-end adjustments and
items that would be disclosed in footnotes to the audited statements). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP. The Borrowers and their Subsidiaries have
no Debt, material obligation or other unusual material forward or long-term
commitment which is not fairly reflected in the foregoing financial statements
or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1997, there has
been no material adverse change in the properties, business, operations,
prospects, or condition (financial or otherwise) of the Borrowers and their
Subsidiaries and no event has occurred or condition arisen that could reasonably
be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Borrowers and their Subsidiaries, taken
as a whole, will be Solvent.
43
(r) Titles to Properties. Each Borrower and each Subsidiary thereof
has such title to the real property owned by it as is necessary or desirable to
the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrowers and their Subsidiaries delivered pursuant to
Section 6.1(o), except those which have been disposed of by any Borrower or any
Subsidiary thereof subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of any Borrower or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names any Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and no Borrower nor any
Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.3 hereof.
(t) Debt and Guaranty Obligations; Subordinated Debt. Schedule
6.1(t) is a complete and correct listing of all Debt (including Subordinated
Debt) and Guaranty Obligations of each Borrower and each Subsidiary thereof as
of the Closing Date in excess of $250,000. Each Borrower and each Subsidiary
thereof have performed and are in material compliance with all of the terms of
such Debt and Guaranty Obligations and all instruments and agreements relating
thereto, and no default or event of default, or event or condition which with
notice or lapse of time or both would constitute such a default or event of
default on the part of any Borrower or any Subsidiary thereof exists with
respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date as
set forth on Schedule 6.1(u), there are no actions, suits or proceedings pending
nor, to the knowledge of any Borrower, threatened against or in any other way
relating adversely to or affecting any Borrower or any Subsidiary thereof or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority which is reasonably likely to have a
Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing (i)
which constitutes a Default or an Event of Default, or (ii) which constitutes,
or which with the passage of time or giving of notice or both would constitute,
a default or event of default by any Borrower or any Subsidiary thereof under
any Material Contract or judgment, decree or order to which any Borrower or any
Subsidiary thereof is a party or by which any Borrower or any Subsidiary thereof
or any of their respective properties may be bound or which would require any
Borrower or any Subsidiary thereof to make any payment thereunder prior to the
44
scheduled maturity date therefor which, with respect to the matters set forth in
clause (ii) could reasonably be expected to result in a Material Adverse Effect.
(w) Communications Regulatory Matters.
(i) Each Network Agreement has been duly executed and
delivered by the respective parties thereto, is in full force and
effect and no Borrower, any Subsidiary thereof nor, to the best
knowledge of the Borrowers, any of the other parties thereto, is in
default of any of the material provisions thereof.
(ii) Schedule 6.1(w) hereto sets forth, as of the
Closing Date, a true and complete list of the following information
for each Communications License or PUC Authorization issued to any
Borrower or any Subsidiary thereof: (A) for all Communications
Licenses, the name of the licensee, the type of service and the
expiration dates; and (B) for each PUC Authorization, the geographic
area covered by such PUC Authorization, the services that may be
provided thereunder and the expiration date, if any.
(iii) No Borrower nor any Subsidiary thereof is in
material violation of any Communications Law applicable thereto. As
of the Closing Date, the Communications Licenses and PUC
Authorizations specified on Schedule 6.1(w) hereto are valid and in
full force and effect without conditions except for such conditions
as are generally applicable to holders of such Communications
Licenses and PUC Authorizations. No event has occurred and is
continuing which could reasonably be expected to (A) result in the
imposition of a material forfeiture or the revocation, termination
or adverse modification of any such Communications License or PUC
Authorization or (B) materially and adversely affect any rights of
any Borrower or any Subsidiary thereof. The Borrowers have no reason
to believe and have no knowledge that Communications Licenses and
PUC Authorizations will not be renewed in the ordinary course.
(iv) All of the Network Facilities and other material
properties, equipment and systems owned, leased or managed by any
Borrower and any Subsidiary thereof are, and to the knowledge of the
Borrowers, all such property, equipment and systems to be acquired
or added in connection with any contemplated system expansion or
construction will be, in good repair, working order and condition
(reasonable wear and tear excepted) and are and will be in
compliance with all material terms and conditions of the
Communications Licenses and PUC Authorizations and all material
standards or rules imposed by applicable Communications Law and any
Governmental Authority or as imposed under any agreements with
telephone companies and customers.
(v) Each Borrower and each Subsidiary thereof have paid
all franchise, license or other fees and charges which have become
due pursuant to any
45
Governmental Approval in respect of their business (or are
contesting the same in good faith after establishing appropriate
reserves required by GAAP) and have made appropriate provision as is
required by GAAP for any such fees and charges which have accrued.
(x) Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf of each
Borrower and each Subsidiary thereof and furnished to the Lenders were, at the
time the same were so furnished, complete and correct in all material respects
to the extent necessary to give the recipient a true and accurate knowledge of
the subject matter. No document furnished or written statement made to the
Administrative Agent or the Lenders by any Borrower or any Subsidiary thereof in
connection with the negotiation, preparation or execution of this Agreement or
any of the Loan Documents contains or will contain, at the time furnished, any
untrue statement of a material fact to the creditworthiness of any Borrower or
any Subsidiary thereof or omits or will omit, at the time furnished, to state a
material fact necessary in order to make the statements contained therein not
misleading. No Borrower is aware of any facts which it has not disclosed in
writing to the Administrative Agent having a Material Adverse Effect, or insofar
as any Borrower can now foresee, could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.2 Year 2000 Compatibility. The Borrowers are aware of the
problem that may be presented for certain computer systems by using date fields
and the like on and after January 1, 2000 and have developed and are
implementing a plan to help assure that their computer systems (including
systems and equipment supplied by others or with which the Borrowers' systems
interface) will be unaffected by such problems except where such problem
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The cost of such development and implementation is not
anticipated to result in a Default or materially adversely affect the ability of
the Borrowers to perform their obligations under this Agreement.
SECTION 6.3 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
46
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 13.11 hereof, each Borrower will furnish or cause to be
furnished to the Administrative Agent and to the Lenders at their respective
addresses as set forth on Schedule 1, or such other address as may be designated
by the Administrative Agent and Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in
any event within forty-five (45) days after the end of the first three (3)
fiscal quarters of each Fiscal Year, an unaudited Consolidated and consolidating
balance sheet of the Borrowers and their Subsidiaries as of the close of such
fiscal quarter and unaudited Consolidated and consolidating statements of
income, retained earnings and cash flows for the fiscal quarter then ended and
that portion of the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by the Borrowers in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by a Responsible
Officer of CT to present fairly in all material respects the financial condition
of the Borrowers and their Subsidiaries as of their respective dates and the
results of operations of the Borrowers and their Subsidiaries for the respective
periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated (and unaudited consolidating) balance sheet of the Borrowers and
their Subsidiaries as of the close of such Fiscal Year and audited Consolidated
(and unaudited consolidating) statements of income, retained earnings and cash
flows for the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by an independent certified public
accounting firm of nationally recognized standing in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by any Borrower or any of its Subsidiaries or with respect
to accounting principles followed by any Borrower or any Subsidiary thereof not
in accordance with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as
practicable and in any event within thirty (30) days after the beginning of each
Fiscal Year, a business plan the
47
Borrowers and their Subsidiaries for the ensuing four (4) fiscal quarters, such
plan to be prepared in accordance with GAAP and to include, on a quarterly
basis, the following: a quarterly operating and capital budget, a projected
income statement, statement of cash flows and balance sheet and a report
containing management's discussion and analysis of such projections, accompanied
by a certificate from a Responsible Officer of CT to the effect that, to the
best of such officer's knowledge, such projections are good faith estimates of
the financial condition and operations of the Borrowers and their Subsidiaries
for such four (4) quarter period.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Section 7.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of a
Responsible Officer of CT in the form of Exhibit F attached hereto (an
"Officer's Compliance Certificate").
SECTION 7.3 Accountants' Certificate. At each time financial
statements are delivered pursuant to Section 7.1(b), a certificate of the
independent public accountants certifying such financial statements addressed to
the Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required
to establish whether or not the Borrowers and their Subsidiaries are in
compliance with the financial covenants set forth in Article IX hereof as at the
end of each respective period.
SECTION 7.4 Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to any Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any management report and any management responses thereto;
(b) As soon as available and in any event within forty-five (45)
days after the end of each Fiscal Year of the Borrowers, an updated Schedule
6.1(w) identifying any material Communications License or material PUC
Authorization lost, surrendered or canceled during such period, and within ten
(10) Business Days after the receipt by any Borrower or any Subsidiary thereof
of written notice that any Communications License or PUC Authorization has been
lost or canceled, copies of any such notice accompanied by a report describing
the measures undertaken by any Borrower or any Subsidiary thereof to prevent
such loss or
48
cancellation (and the anticipated impact, if any, that such loss or cancellation
will have upon the business of the Borrowers and their Subsidiaries); and
(c) Such other information regarding the operations, business
affairs and financial condition of any Borrower or any Subsidiary thereof as the
Administrative Agent or any Lender may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in
no event later than ten (10) days after any Responsible Officer obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all material proceedings and investigations
by or before any Governmental Authority and all material actions and proceedings
in any court or before any arbitrator against or involving any Borrower or any
Subsidiary thereof or any of their respective properties, assets or businesses;
(b) any notice of any material violation received by any Borrower or
any Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of material violation of Environmental Laws which in any
such case could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to
result in, a strike or other work action against any Borrower or any Subsidiary
thereof;
(d) any attachment, judgment, lien, levy or order exceeding $500,000
that may be assessed against any Borrower or any Subsidiary thereof;
(e) (i) any Default or Event of Default, or (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any Material Contract to which
any Borrower or any Subsidiary thereof is a party or by which such Borrower or
such Subsidiary or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code (along with a copy thereof), (ii) all notices
received by any Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (iii) all notices received by any Borrower or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA and (iv) any Borrower
obtaining knowledge or reason to know that such Borrower or any ERISA Affiliate
has filed or intends
49
to file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
(g) the enactment or promulgation after the date hereof of any
federal, state, provincial or local statute, regulation or ordinance or judicial
or administrative decision or order (or, to the extent that any Borrower has
knowledge thereof, any such proposed statute, regulation, ordinance, decision or
order, whether by the introduction of legislation or the commencement of
rulemaking or similar proceedings or otherwise) having a material effect or
relating to the operation of the Network Facilities by any Borrower or any
Subsidiary thereof (including, without limitation, any statutes, decisions or
orders affecting local exchange carriers generally and not directed against any
Borrower or any Subsidiary thereof specifically) which have been issued or
adopted (or, to the extent any Borrower has knowledge thereof, which have been
proposed) and which could reasonably be expected to have a Material Adverse
Effect; or
(h) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect.
SECTION 7.6 Accuracy of Information. All written information,
reports, statements and other papers and data furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender (other than financial
forecasts) whether pursuant to this Article VII or any other provision of this
Agreement shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Administrative
Agent or any Lender complete, true and accurate knowledge of the subject matter
based on the Borrowers' knowledge thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full
and the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 13.11, each Borrower will, and will cause each of its
Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.5, preserve and maintain its separate
corporate existence and all material rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable
Law, except where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
50
SECTION 8.2 Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including material
copyrights, patents, trade names and trademarks; maintain in good working order
and condition (reasonable wear and tear and obsolescence excepted) all
buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary in the reasonable judgment of the Borrowers for the
conduct of its business, so that the business carried on in connection therewith
may be properly and advantageously conducted at all times.
SECTION 8.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks (including hazard and business
interruption coverage) and in such amounts as are customarily maintained by
similar businesses and as may be required by Applicable Law, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 8.4 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. Pay and perform
all Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness (including, without limitation, Intercompany Debt), obligations and
liabilities in accordance with customary trade practices; provided, that such
Borrower or such Subsidiary may contest any item described in clauses (a) or (b)
of this Section 8.5 in good faith so long as adequate reserves are maintained
with respect thereto in accordance with GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and remain
in material compliance with all Applicable Laws and maintain in full force and
effect all material Governmental Approvals, in each case applicable to the
conduct of its business.
SECTION 8.7 Environmental Laws. In addition to and without limiting
the generality of Section 8.6, (a) comply in all material respects with, and use
its best efforts to ensure such compliance by all of its tenants and subtenants
with all applicable Environmental Laws and obtain and comply with and maintain,
and ensure that all tenants and subtenants obtain and comply with and maintain,
and use its best efforts to ensure that all of its tenants and subtenants obtain
and comply with and maintain any and all material licenses, approvals,
51
notifications, registrations or permits required by applicable Environmental
Laws, (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives of
any Governmental Authority regarding Environmental Laws, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of such Borrower or such Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without
limiting the generality of Section 8.6, (a) comply with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans, (b) not take any action or fail to
take action the result of which could be a liability to the PBGC or to a
Multiemployer Plan, (c) not participate in any prohibited transaction that could
result in any civil penalty under ERISA or tax under the Code, (d) operate each
Employee Benefit Plan in such a manner that will not incur any tax liability
under Section 4980B of the Code or any liability (other than for benefits in
accordance with the terms of such Employee Benefit Plan) to any qualified
beneficiary as defined in Section 4980B of the Code and (e) furnish to the
Administrative Agent upon the Administrative Agent's request such additional
information about any Employee Benefit Plan as may be reasonably requested by
the Administrative Agent.
SECTION 8.9 Compliance With Agreements. Comply in all material
respects with each term, condition and provision of all Material Contracts;
provided, that such Borrower or such Subsidiary may contest any such Material
Contract in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 8.10 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date
and in lines of business reasonably related thereto.
SECTION 8.11 Visits and Inspections. Upon reasonable notice and
during normal business hours, permit representatives of the Administrative Agent
or any Lender, from time to time, to visit and inspect its properties; inspect,
audit and make extracts from its books, records and files, including, but not
limited to, management letters prepared by independent accountants; and discuss
with its principal officers, and its independent accountants, its business,
assets, liabilities, financial condition, results of operations and business
prospects.
52
SECTION 8.12 Additional Subsidiaries. At such time as any Subsidiary
of CT or any other Borrower is created or acquired after the Closing Date, cause
to be executed and delivered to the Administrative Agent (i) a Joinder Agreement
such that such Subsidiary shall become a Borrower hereunder and (ii) favorable
legal opinions addressed to the Administrative Agent and Lenders in form and
substance satisfactory thereto with respect to such Joinder Agreement and such
other documents and closing certificates as consistent with Article V as may be
reasonably requested by the Administrative Agent.
SECTION 8.13 Year 2000 Compatibility. Take all actions reasonably
necessary to assure that Borrowers' computer based systems are able to operate
and effectively process data which includes dates on and after January 1, 2000.
At the request of the Administrative Agent, the Borrowers shall provide
reasonable assurances satisfactory to the Administrative Agent of the Borrowers'
Year 2000 compatibility.
SECTION 8.14 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Revolving Credit Notes, the Letters of Credit and the other Loan
Documents.
SECTION 8.15 CoBank Participation Certificates. If CT elects to have
its Obligations to CoBank, ACB ("CoBank") as a Lender hereunder be eligible for
patronage from CoBank, then CT shall acquire and maintain non-voting
participation certificates in CoBank (the "Participation Certificates") in such
amounts and at such times as CoBank may from time to time require in accordance
with its bylaws and capital plan (as each may be amended from time to time);
provided, however, that the maximum amount of Participation Certificates that CT
may be required to purchase may not exceed the maximum amount required by
CoBank's bylaws as in effect on the date hereof. The rights and obligations of
the parties with respect to the Participation Certificates and any other
patronage or other distributions shall be governed by CoBank's bylaws.
SECTION 8.16 Merger of Pop-Net, Inc. Within thirty (30) days of the
Closing Date, cause the merger of Pop-Net, Inc. into CTC Internet Services,
Inc., with the surviving entity to be CTC Internet Services, Inc.; provided that
if such merger does not occur within thirty (30) days of the Closing Date, the
Borrowers will cause Pop-Net, Inc. to become a Borrower hereunder pursuant to
Section 8.12.
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ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full
and the Commitments terminated, unless consent has been obtained in the manner
set forth in Section 13.11 hereof, the Borrowers and their Subsidiaries on a
Consolidated basis will not:
SECTION 9.1 Leverage Ratio: As of any fiscal quarter end, permit the
ratio of (a) Total Debt as of such date to (b) Operating Cash Flow for the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date to be greater than the following ratios for the corresponding period:
Period Ratio
------ -----
Closing Date through and including
6/30/2001 4.00 to 1.00
Thereafter 3.50 to 1.00
SECTION 9.2 Fixed Charge Coverage Ratio: As of any fiscal quarter
end, permit the ratio of (a) Operating Cash Flow for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date to (b)
Fixed Charges for the period of four (4) consecutive fiscal quarters ending on
or immediately prior to such date to be less than the following ratios for the
corresponding period:
Period Ratio
------ -----
12/31/99 through and including
3/30/2000 0.70 to 1.00
3/31/2000 through and including
6/30/2001 0.85 to 1.00
Thereafter 1.10 to 1.00
SECTION 9.3 Total Debt to Total Capitalization Coverage Ratio: As of
any fiscal quarter end, permit the ratio of (a) Total Debt on such date to (b)
Total Capitalization on such date to be greater than 0.50 to 1.00.
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ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full
and the Commitments terminated, unless consent has been obtained in the manner
set forth in Section 13.11 hereof, each Borrower has not and will not permit any
of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with (i) a
Lender or (ii) any Person meeting the qualifications of an Eligible Assignee and
(with respect to (ii) only) upon standard market terms and conditions (including
interest rate) as reasonably determined by the Administrative Agent;
(c) Debt existing on the Closing Date and not otherwise permitted
under this Section 10.1, as set forth on Schedule 6.1(t) (or specifically
permitted to be excluded from such Schedule) and the renewal and refinancing
(but not the increase of the aggregate principal amount thereof) thereof;
(d) Debt of the Borrowers and their Subsidiaries incurred in
connection with Capitalized Leases in an aggregate amount not to exceed
$5,000,000 on any date of determination;
(e) purchase money Debt of the Borroers and their Subsidiaries in an
aggregate amount not to exceed $2,500,000 on any date of determination;
(f) Debt consisting of Guaranty Obligations permitted by Section
10.2;
(g) Debt and Capital Leases assumed or continued in connection with
acquisitions permitted pursuant to Section 10.4 in an aggregate amount not to
exceed $10,000,000;
(h) Subordinated Debt; and
(i) Intercompany Debt; provided, that none of the Debt permitted to
be incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of any Borrower to make any
payment to any such Borrower or any other Subsidiary (in the form of dividends,
intercompany advances or otherwise) for the purpose of enabling such Borrower to
pay the Obligations.
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SECTION 10.2 Limitations on Guaranty Obligations. Create, incur,
assume or suffer to exist any Guaranty Obligations except:
(a) Guaranty Obligations in favor of the Administrative Agent for
the benefit of the Administrative Agent and the Lenders;
(b) Guaranty Obligations existing on the Closing Date and not
otherwise permitted under this Section 10.2, as set forth on Schedule 6.1(t) (or
as specifically permitted to be excluded from such Schedules) and the renewal
and refinancing (but not the increase of the guaranteed amount thereof) thereof;
(c) Guaranty Obligations with respect to Debt permitted pursuant to
Section 10.1; and
(d) Guaranty Obligations in an amount not to exceed $2,500,000 to
secure payment or performance of customer service contracts incurred in the
ordinary course of business.
SECTION 10.3 Limitations on Liens. Create, incur, assume or suffer
to exist, any Lien on or with respect to any of its assets or properties
(including without limitation shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, materially detract from the value of such property or impair the
use thereof in the ordinary conduct of business;
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(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 10.3 and in
existence on the Closing Date and described on Schedule 10.3;
(g) Liens securing Debt permitted under Sections 10.1(d) and (e);
provided that (i) such Liens shall be created substantially simultaneously with
the acquisition or lease of the related asset, (ii) such Liens do not at any
time encumber any property other than the property financed by such Debt, (iii)
the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt secured by any such Lien shall at no time exceed one hundred
percent (100%) of the original purchase price or lease payment amount of such
property at the time it was acquired or leased;
(h) Liens securing Debt permitted pursuant to Section 10.1(g), so
long as such Liens are in existence at the time the assets are acquired by any
Borrower or any Subsidiary thereof pursuant to Section 10.4 and such Liens are
not created in contemplation of such acquisition;
(i) Liens securing Debt permitted pursuant to Section 10.1(i);
(j) Statutory liens in the Participation Certificates in CoBank
purchased pursuant to Section 8.15; and
(k) Liens arising under or in connection with that certain Joint
Operating Agreement among BellSouth Carolinas, PCS, L.P., BellSouth Personal
Communications, Inc., and certain rural telephone companies identified on the
signature pages thereto (the "Joint Operating Agreement").
SECTION 10.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a
material portion of the business or assets of any other Person or any other
investment or interest whatsoever in any other Person, or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to,
or any investment in cash or by delivery of property in, any Person except:
(a) investments not otherwise permitted by this Section 10.4 in
another Borrower or Subsidiary thereof (including without limitation the
creation or capitalization of any Subsidiary), and the other existing loans,
advances and investments not otherwise permitted by this Section 10.4 described
on Schedule 10.4;
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(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or ▇▇▇▇▇'▇
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank; provided further that the Borrowers may make investments in
certificates of deposit maturing no later than one hundred and twenty (120) days
from the date of creation thereof, issued by other commercial banks not to
exceed $1,000,000, (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder or (v) Participation Certificates pursuant to Section
8.15;
(c) investments by any Borrower or any Subsidiary thereof in the
form of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any combination
thereof) which are consummated in accordance with the following requirements of
this Section 10.4(c) (any such acquisition, a "Permitted Acquisition"): (i) the
acquired Person shall be engaged in and substantially all of the acquired assets
shall be utilized in a similar line of business as any Borrower or Subsidiary as
described in Section 8.10 or as otherwise approved in writing by the Required
Lenders, (ii) no Default or Event of Default shall have occurred and be
continuing or be created by the relevant Permitted Acquisition, and (iii) for
any single Permitted Acquisition, or series of related Permitted Acquisitions
having an aggregate consideration equal to or in excess of $10,000,000, and at
all times after the aggregate consideration paid for all Permitted Acquisitions
since the Closing Date (including the proposed Permitted Acquisition ) equals or
exceeds $20,000,000, (A) the Borrowers shall deliver a certificate to the
Administrative Agent and the Required Lenders, in form and substance reasonably
satisfactory to the Administrative Agent, demonstrating pro forma compliance
with the financial covenants set forth in Article IX and the other terms of the
Loan Documents prior to the closing of such Permitted Acquisition, (B) a
description of the relevant Permitted Acquisition in reasonable detail and the
corresponding documentation shall be furnished by the Borrowers to the Lenders
at least ten (10) Business Days prior to the closing date thereof (to be
followed by any changed pages and fully executed copies promptly after the
creation thereof) and (C) the Borrowers shall have received the prior written
approval of the Required Lenders;
(d) loans, advances and any other investments by any Borrower or any
Subsidiary thereof in any other Person in an aggregate amount not to exceed (i)
Five Million Dollars
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($5,000,000) during any Fiscal Year; provided, however, that any portion of such
$5,000,000 not used in any such Fiscal Year may be applied to the next
succeeding Fiscal Year or Fiscal Years on a cumulative basis, and (ii) Twenty
Million Dollars ($20,000,000) since the Closing Date;; provided further that the
dollar limitations set forth in the foregoing clauses (i) and (ii) shall not
apply to each loan, advance or other investment made by CT Communications
Northeast Trust ("CT Trust") utilizing the proceeds of sales of assets of CT
Trust as of the date hereof, which assets are identified on Schedule 10.4(d)
hereto, or any subsequent loan, advance or other investment thereof.
(e) investments in the form of deposits for utilities, security
deposits, deposits for leases, and similar prepaid expenses incurred in the
ordinary course of business;
(f) loans or advances to employees of any Borrower or any Subsidiary
thereof made in the ordinary course of business that do not in the aggregate
exceed $1,000,000 at any time outstanding; and
(g) investments in the form of trade accounts created in the
ordinary course of business.
SECTION 10.5 Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
except:
(a) any Wholly-Owned Subsidiary of any Borrower may merge with any
Borrower or any other Wholly-Owned Subsidiary of any Borrower;
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 10.4(c); and
(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into any
Borrower or any other Wholly-Owned Subsidiary of any Borrower.
SECTION 10.6 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of assets no longer used or usable in the business of
any Borrower or any Subsidiaries thereof;
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(c) the transfer, sale, lease, assignment or other disposition of
assets to any Borrower or any Wholly-Owned Subsidiary of any Borrower;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof; and
(e) other sales and transfers not otherwise permitted hereunder;
provided, that the Net Cash Proceeds therefrom are applied as required pursuant
to Section 2.3.
(f) the transfer of its Operating Assets, Repurchase Additions, and
Partitioned Licenses (as each such term is defined in the Joint Operating
Agreement) pursuant to the Joint Operating Agreement.
SECTION 10.7 Limitations on Dividends and Distributions. Declare or
pay any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; provided that:
(a) any Borrower or any Subsidiary thereof may pay dividends in
shares of its own capital stock;
(b) any Subsidiary may pay dividends or make distributions to any
Borrower;
(c) CT may pay cash dividends to its equity holders; provided that
(i) such dividends shall not exceed in any Fiscal Year one hundred percent
(100%) of Consolidated Net Earnings for the immediately preceding Fiscal Year
and (ii) the Borrowers shall have delivered to the Administrative Agent evidence
reasonably satisfactory thereto demonstrating compliance with Articles IX and X
hereof both before and after giving effect to such dividend payment;
(d) CT may consummate the Recapitalization; and
(e) any Borrower or any Subsidiary thereof may redeem equity
securities in an amount not to exceed One Million Dollars ($1,000,000) over the
term of this Agreement issued pursuant to incentive stock option plans of any
Borrower or any Subsidiary from employees upon the termination of the employment
of such employees, so long as any such redemption is made in accordance with the
terms and conditions of such incentive stock option plans.
SECTION 10.8 Limitations on Exchange and Issuance of Capital Stock.
Issue, sell or otherwise dispose of any class or series of capital stock that,
by its terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event
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or passage of time would be, (a) convertible or exchangeable into Debt (other
than Intercompany Debt) or (b) required to be redeemed or repurchased, including
at the option of the holder, in whole or in part, for cash or property other
than capital stock, or has, or upon the happening of an event or passage of time
would have, a cash redemption or similar payment due (any such capital stock
"Convertible/Redeemable Equity"); provided that the foregoing restriction shall
not apply to any Convertible/ Redeemable Equity which cannot under any
circumstances be converted, exchanged, redeemed or repurchased at any time prior
to one (1) year after the Termination Date.
SECTION 10.9 Transactions with Affiliates. Except as otherwise
permitted herein, directly or indirectly (a) make any loan or advance to, or
purchase or assume any note or other obligation to or from, any of its officers,
directors, shareholders or other Affiliates other than Borrowers, or to or from
any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates other than Borrowers, or subcontract any
operations to any of its Affiliates other than Borrowers or (b) enter into, or
be a party to, any other transaction with any of its Affiliates other than
Borrowers, except pursuant to the reasonable requirements of its business and
upon terms which are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 10.10 Certain Accounting Changes. Change its Fiscal Year
end, or make any material change as reasonably determined by the Administrative
Agent in its accounting treatment and reporting practices except as required by
GAAP.
SECTION 10.11 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with respect
thereto money or securities before due for the purpose of paying when due) any
Subordinated Debt.
SECTION 10.12 Restrictive Agreements. Enter into or permit to exist
any Debt which contains any negative pledge on assets or any covenants more
restrictive than the provisions of Articles VIII, IX and X hereof, or which
restricts, limits or otherwise encumbers its ability to incur Liens on or with
respect to any of its assets or properties other than the assets or properties
securing such Debt.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary
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or be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any Governmental Authority or
otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. Any Borrower shall default in any payment of principal of any
Revolving Credit Loan, Revolving Credit Note or Reimbursement Obligation when
and as due (whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. Any Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Revolving Credit Loan, Revolving Credit Note or Reimbursement
Obligation or the payment of any other Obligation, and such default shall
continue unremedied for three (3) Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by any Borrower or any Subsidiary thereof under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. Any Borrower shall
default in the performance or observance of any covenant or agreement contained
in Section 7.5(e)(i) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. Any
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrowers by
the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by any
Borrower under any Hedging Agreement and such amount is not paid within thirty
(30) Business Days of the due date thereof.
(g) Debt Cross-Default. Any Borrower or any Subsidiary thereof shall
(i) default in the payment of any Debt (other than the Revolving Credit Notes or
any Reimbursement Obligation) the aggregate outstanding amount of which Debt is
in excess of $1,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Revolving Credit Notes or any Reimbursement Obligation)
the aggregate outstanding amount of which Debt is in excess of $1,000,000 or
contained in any instrument or agreement evidencing, securing or relating
thereto or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit
62
the holder or holders of such Debt (or a trustee or agent on behalf of such
holder or holders) to cause, with the giving of notice if required, any such
Debt to become due prior to its stated maturity (any applicable grace period
having expired).
(h) Other Cross-Defaults. Any Borrower or any Subsidiary thereof
shall default in the payment when due, or in the performance or observance, of
any material obligation or material condition of any Material Contract unless,
but only as long as, the existence of any such default is being contested by
such Borrower or such Subsidiary in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of such
Borrower or such Subsidiary to the extent required by GAAP.
(i) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
other than Permitted Holders shall obtain ownership or control in one or more
series of transactions of more than twenty-five percent (25%) of the common
stock or twenty-five percent (25%) of the voting power of any Borrower entitled
to vote in the election of members of the board of directors of any Borrower or
there shall have occurred under any indenture or other instrument evidencing any
Debt in excess of $2,500,000 any "change in control" (as defined in such
indenture or other evidence of Debt) obligating any Borrower to repurchase,
redeem or repay all or any part of the Debt or capital stock provided for
therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest within sixty (60) days after the filing thereof any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against any Borrower or any Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for any Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief
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requested in such case or proceeding (including, but not limited to, an order
for relief under such federal bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any provision of this Agreement or of any
other Loan Document shall for any reason cease to be valid and binding on any
Borrower or Subsidiary party thereto or any such Person shall so state in
writing.
(m) Termination Event. The occurrence of any of the following
events: (i) any Borrower or any ERISA Affiliate fails to make full payment when
due of all amounts which, under the provisions of any Pension Plan or Section
412 of the Code, any Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$500,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) any Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$500,000.
(n) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments to exceed $500,000 in any
Fiscal Year shall be entered against any Borrower or any Subsidiary thereof by
any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
(o) Loss of License. Any Communications License or PUC Authorization
of any Borrower or any Subsidiary thereof shall expire, terminate, be canceled
or otherwise lost or any application therefor be rejected, which event could
reasonably be expected to have a Material Adverse Effect.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrowers:
(a) Acceleration; Termination of Facilities. Declare the principal
of and interest on the Revolving Credit Loans, the Revolving Credit Notes and
the Reimbursement Obligations at the time outstanding, and all other amounts
owed to the Lenders and to the Administrative Agent under this Agreement or any
of the other Loan Documents (other than any Hedging Agreement) (including,
without limitation, all L/C Obligations, whether or not the beneficiaries of the
then outstanding Letters of Credit shall have presented the documents required
thereunder) and all other Obligations (other than obligations owing under any
Hedging Agreement), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
64
terminate the Credit Facility and any right of the Borrowers to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
of an Event of Default specified in Section 11.1(j) or (k), the Credit Facility
shall be automatically terminated and all Obligations (other than obligations
owing under any Hedging Agreement) shall automatically become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers.
(c) Rights of Collection. Exercise on behalf of the Lenders all of
its other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations of the Borrowers.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrowers, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the
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other Loan Documents for the term hereof and each such Lender irrevocably
authorizes First Union as Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and such
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent. Any reference to the Administrative Agent in
this Article XII shall be deemed to refer to the Administrative Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.
SECTION 12.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Borrower or any Subsidiary thereof or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of any Borrower or any Subsidiary
thereof to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrowers or any of their Subsidiaries.
SECTION 12.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice
66
and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Revolving Credit Note as the owner thereof for all purposes unless such
Revolving Credit Note shall have been transferred in accordance with Section
13.10 hereof. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Required Lenders
(or, when expressly required hereby or by the relevant other Loan Document, all
the Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Revolving Credit Notes in accordance with a
request of the Required Lenders (or, when expressly required hereby, all the
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Revolving Credit Notes.
SECTION 12.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless it has received notice from a Lender or the
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such direction, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders, except to the extent that other provisions of
this Agreement expressly require that any such action be taken or not be taken
only with the consent and authorization or the request of the Lenders or
Required Lenders, as applicable.
SECTION 12.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrowers or any of their
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and their Subsidiaries and made
its own decision to make its Revolving Credit Loans and issue
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or participate in Letters of Credit hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrowers or
any of their Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to the respective amounts of their Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Revolving Credit Notes or any Reimbursement
Obligation) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 12.7 shall survive the payment of the Revolving Credit Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
SECTION 12.8 The Administrative Agent in Its Individual Capacity.
The Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrowers as though the Administrative Agent were not an Administrative
Agent hereunder. With respect to any Revolving Credit Loans made or renewed by
it and any Revolving Credit Note issued to it and with respect to any Letter of
Credit issued by it or participated in by it, the Administrative Agent shall
have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
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SECTION 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000 and so long as no Default or Event of Default has occurred and is
continuing be consented to by the Borrowers. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the Administrative
Agent's giving of notice of resignation, then the Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which successor
shall have minimum capital and surplus of at least $500,000,000 and so long as
no Default or Event of Default has occurred and is continuing be consented to by
the Borrowers. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 12.9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.
SECTION 12.10 The Administrative Agent. The Administrative Agent
hereby agrees that with respect to any amendment, modification or waiver of this
Agreement and the other Loan Documents, the Administrative Agent shall be
responsible for the preparation, documentation and execution thereof. In
addition, with respect to any action or decision requiring consent or approval
of any Lenders, the Administrative Agent shall be responsible for requesting
such consent or approval from the Lenders.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative
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Agent as understood by the Administrative Agent will be deemed to be the
controlling and proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrowers: CT Communications, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies (which ▇▇▇▇▇ & ▇▇▇▇▇▇▇.
shall not constitute Columbia Square
notice) to: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on Schedule
1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which
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shall have been specified for such purpose by written notice to the Borrowers
and Lenders, as the Administrative Agent's Office referred to herein, to which
payments due are to be made and at which Revolving Credit Loans will be
disbursed and Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity. The Borrowers will (a) pay all
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the enforcement of any rights and remedies of the
Administrative Agent and Lenders under the Credit Facility, including consulting
with appraisers, accountants, engineers, attorneys and other Persons concerning
the nature, scope or value of any right or remedy of the Administrative Agent or
any Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (c) indemnify and hold
harmless the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors (each such
Person or entity referred to hereafter in this paragraph as an "Indemnified
Party"), from and against any losses, penalties, fines, liabilities, damages,
costs and expenses, for which any Indemnified Person may become liable to any
third party in connection with any claim, investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Lender is a party
thereto) and the prosecution and defense thereof, arising out of or in any way
connected with this Agreement, any other Loan Document or the Revolving Credit
Loans, including without limitation reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing result from the gross negligence
or willful misconduct of the party seeking indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 13.10 are hereby authorized by the Borrowers at any time or from
time to time, without notice to the Borrowers or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by
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the Lenders, or any such assignee or participant to or for the credit or the
account of the Borrowers against and on account of the Obligations irrespective
of whether or not (a) the Lenders shall have made any demand under this
Agreement or any of the other Loan Documents or (b) the Administrative Agent
shall have declared any or all of the Obligations to be due and payable as
permitted by Section 11.2 and although such Obligations shall be contingent or
unmatured.
SECTION 13.4 Governing Law. This Agreement, the Revolving Credit
Notes and the other Loan Documents, unless otherwise expressly set forth
therein, shall be governed by, construed and enforced in accordance with the
laws of the State of North Carolina, without reference to the conflicts or
choice of law principles thereof.
SECTION 13.5 Consent to Jurisdiction. The Borrowers hereby
irrevocably consent to the personal jurisdiction of the state and federal courts
located in Mecklenburg County, North Carolina, in any action, claim or other
proceeding arising out of any dispute in connection with this Agreement, the
Revolving Credit Notes and the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations. The
Borrowers hereby irrevocably consent to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the
Revolving Credit Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 13.1.
Nothing in this Section 13.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against the Borrowers or their properties in the courts of
any other jurisdictions.
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Revolving Credit
Notes or any other Loan Documents ("Disputes"), between or among parties to the
Revolving Credit Notes or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a party
does not waive the right of that party to demand arbitration hereunder. Disputes
may include, without limitation, tort claims, counterclaims, claims brought as
class actions, claims arising from Loan Documents executed in the future, or
claims concerning any aspect of the past, present or future relationships
arising out of or connected with the Loan Documents. Arbitration shall be
conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association and
Title 9 of the U.S.
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Code. All arbitration hearings shall be conducted in Charlotte, North Carolina.
The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. Notwithstanding anything foregoing to
the contrary, any arbitration proceeding demanded hereunder shall begin within
ninety (90) days after such demand thereof and shall be concluded within
one-hundred and twenty (120) days after such demand. These time limitations may
not be extended unless a party hereto shows cause for extension and then such
extension shall not exceed a total of sixty (60) days. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys. The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where the
hearing will be conducted. The parties hereto do not waive any applicable
Federal or state substantive law except as provided herein. Notwithstanding the
foregoing, this paragraph shall not apply to any Hedging Agreement that is a
Loan Document.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND
THE BORROWERS HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY
HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the Administrative Agent, the Lenders and the
Borrowers each preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining provisional
or ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
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SECTION 13.7 Reversal of Payments. To the extent the Borrowers make
a payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment which payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment repaid, the Obligations or
part thereof intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been received by the Administrative
Agent.
SECTION 13.8 Injunctive Relief; Punitive Damages.
(a) The Borrowers recognize that, upon an Event of Default, any
remedy of law may prove to be inadequate relief to the Lenders. Therefore, the
Borrowers agree that the Lenders, at the Lenders' option, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
(b) The Administrative Agent, each Lender and each Borrower (on
behalf of itself and its Subsidiaries) hereby agree that no such Person shall
have a remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 13.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by any
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrowers, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the certified public accountants
of the Borrowers, to the extent that such changes would modify such accounting
terms or the interpretation or computation thereof, such changes shall be
followed in defining such accounting terms only from and after the date the
Borrowers and the Lenders shall have amended this Agreement to the extent
necessary to reflect any such changes in the financial covenants and other terms
and conditions of this Agreement.
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SECTION 13.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Administrative Agent and the Lenders,
all future holders of the Revolving Credit Notes, and their respective
successors and assigns, except that the Borrowers shall not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Borrowers (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Revolving Credit Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement;
(ii) if less than all of the assigning Lender's
Commitment is to be assigned, the Commitment so assigned shall not
be less than $5,000,000;
(iii) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance in the form
of Exhibit G attached hereto (an "Assignment and Acceptance"),
together with any Revolving Credit Note or Revolving Credit Notes
subject to such assignment;
(iv) such assignment shall not, without the consent of
the Borrowers, require any Borrower to file a registration statement
with the Securities and Exchange Commission or apply to or qualify
the Revolving Credit Loans or the Revolving Credit Notes under the
blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,000 upon the execution by such Lender
of the Assignment and Acceptance; provided that no such fee shall be
payable upon any assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party
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hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereby and (B) the Lender thereunder shall,
to the extent provided in such assignment, be released from its obligations
under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering
an Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Revolving Credit Notes. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an Eligible
Assignee together with any Revolving Credit Note or Revolving Credit Notes
subject to such assignment and the written consent to such assignment as
provided in Section 13.10(b), the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is substantially in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrowers; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrowers.
Within five (5) Business Days after receipt of such copy of such Assignment and
Acceptance, the Borrowers shall execute and deliver to the Administrative Agent,
in exchange for the surrendered Revolving Credit Note or Revolving Credit Notes,
a new Revolving Credit Note or Revolving Credit Notes to the order of such
Eligible Assignee in amounts equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and a new Revolving Credit Note or Revolving
Credit Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder.
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Such new Revolving Credit Note or Revolving Credit Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Revolving Credit Note or Revolving Credit Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Revolving Credit Notes delivered to the
assigning Lender. Each surrendered Revolving Credit Note or Revolving Credit
Notes shall be canceled and returned to the Borrowers.
(f) Participations. Each Lender may sell participations to one or
more banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Revolving Credit Notes held by it); provided that:
(i) each such participation shall be in an amount not
less than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain
unchanged;
(iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the
Revolving Credit Notes held by it for all purposes of this
Agreement;
(v) the Borrowers, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Agreement;
(vi) such Lender shall not permit such participant the
right to approve any waivers, amendments or other modifications to
this Agreement or any other Loan Document other than waivers,
amendments or modifications which would reduce the principal of or
the interest rate on any Revolving Credit Loan or Reimbursement
Obligation, extend the term or increase the amount of the
Commitment, reduce the amount of any fees to which such participant
is entitled, or extend any scheduled payment date for principal of
or interest on any Revolving Credit Loan or Reimbursement
Obligation; and
(vii) any such disposition shall not, without the
consent of the Borrowers, require any Borrower to file a
registration statement with the Securities and Exchange Commission
to apply to qualify the Revolving Credit Loans or the Revolving
Credit Notes under the blue sky law of any state.
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(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrowers obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications and
provided further, that the Administrative Agent and Lenders may disclose any
such information to the extent such disclosure is required by law or requested
by any regulatory authority. Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant to this
Section 13.10, disclose to the assignee, participant, proposed assignee or
proposed participant, any information relating to the Borrowers furnished to
such Lender by or on behalf of the Borrowers; provided, that prior to any such
disclosure, each such assignee, proposed assignee, participant or proposed
participant shall agree with the Borrowers or such Lender (which in the case of
an agreement with only such Lender, the Borrowers shall be recognized as a third
party beneficiary thereof) to preserve the confidentiality of any confidential
information relating to the Borrowers received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit
any Lender from pledging or assigning any Revolving Credit Note to any Federal
Reserve Bank in accordance with Applicable Law.
SECTION 13.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents (other than any Hedging Agreement, the terms and
conditions of which may be amended, modified or waived by the parties thereto)
may be amended or waived by the Lenders, and any consent given by the Lenders,
if, but only if, such amendment, waiver or consent is in writing signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Borrowers; provided, that no amendment, waiver or
consent shall (a) increase the amount or extend the time of the obligation of
the Lenders to make Revolving Credit Loans or issue or participate in Letters of
Credit, (b) extend the originally scheduled time or times of payment of the
principal of any Revolving Credit Loan or Reimbursement Obligation (except for
any waiver of prepayments required pursuant to Section 2.3) or the time or times
of payment of interest on any Revolving Credit Loan or Reimbursement Obligation,
(c) reduce the rate of interest or fees payable on any Revolving Credit Loan or
Reimbursement Obligation, (d) reduce the principal amount of any Revolving
Credit Loan or Reimbursement Obligation, (e) permit any subordination of the
principal or interest on any Revolving Credit Loan or Reimbursement Obligation,
(f) permit any assignment (other than as specifically permitted or contemplated
in this Agreement) of any of the Borrowers' rights and obligations hereunder, or
(g) amend the provisions of this Section
78
13.11 or the definition of Required Lenders, without the prior written consent
of each Lender. In addition, no amendment, waiver or consent to the provisions
of (a) Article XIIshall be made without the written consent of the
Administrative Agent and (b) Article III without the written consent of the
Issuing Lender.
SECTION 13.12 Performance of Duties. The obligations of the
Borrowers under this Agreement and each of the Loan Documents shall be performed
by the Borrowers at their sole cost and expense.
SECTION 13.13 All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Lenders, the Administrative
Agent and any Persons designated by the Administrative Agent or any Lender
pursuant to any provisions of this Agreement or any of the other Loan Documents
shall be deemed coupled with an interest and shall be irrevocable so long as any
of the Obligations remain unpaid or unsatisfied or the Credit Facility has not
been terminated.
SECTION 13.14 Survival of Indemnities. Notwithstanding any
termination of this Agreement, the indemnities to which the Administrative Agent
and the Lenders are entitled under the provisions of this Article XIII and any
other provision of this Agreement and the Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 13.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 13.18 Term of Agreement. This Agreement shall remain in
effect from the Closing Date through and including the date upon which all
Obligations shall
79
have been indefeasibly and irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.
SECTION 13.19 CT as Agent for Borrowers; Obligations Joint and
Several.
(a) The Borrowers hereby irrevocably appoint and authorize CT (i) to
provide the Administrative Agent with all notices with respect to Loans and
Letters of Credit obtained for the benefit of any Borrower and all other notices
and instructions under this Agreement and (ii) to take such action on behalf of
the Borrowers as CT deems appropriate on its behalf to obtain Loans and Letters
of Credit and to exercise such other powers as are reasonably incidental thereto
to carry out the purposes of this Agreement.
(b) All of the Borrowers shall be jointly and severally liable for
the Obligations, however incurred. References to the Borrowers with respect to
the Obligations or any portion thereof shall mean each Borrower on a joint and
several basis.
SECTION 13.20 Inconsistencies with Other Documents; Independent
Effect of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control.
(b) The Borrowers expressly acknowledge and agree that each covenant
contained in Articles VIII, IX, or X hereof shall be given independent effect.
Accordingly, no Borrower shall engage in any transaction or other act otherwise
permitted under any covenant contained in Articles VIII, IX, or X if, before or
after giving effect to such transaction or act, such Borrower shall or would be
in breach of any other covenant contained in Articles VIII, IX, or X.
SECTION 13.21 Trust Obligations. Neither the trustees nor the
shareholders of CT Communications Northeast Trust shall be held to any personal
liability in their capacity as trustee or shareholder, as applicable, under this
Agreement, any Revolving Credit Note or any other Loan Document.
[Signature pages to follow]
79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] CT COMMUNICATIONS, INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
-------------------------------------
[CORPORATE SEAL] CTC LONG DISTANCE SERVICES, INC.,
as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CT WIRELESS CABLE, INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CT CELLULAR, INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
-----------------------------------
[CORPORATE SEAL] CAROLINA PERSONAL COMMUNICATIONS,
INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
-------------------------------------
81
[CORPORATE SEAL] THE CONCORD TELEPHONE COMPANY,
as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CTC INTERNET SERVICES, INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CTC EXCHANGE SERVICES, INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CT GLOBAL TELECOMMUNICATIONS, INC., as
Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior VP, Secretary and Treasurer
------------------------------------
[CORPORATE SEAL] CT COMMUNICATIONS NORTHEAST TRUST,
Neither the Trustees nor the as Borrower
Shareholders of CT Communications By: CT Communications, Inc., as Trustee and not
Northeast Trust shall be held Individually
to any personal liability in
their capacity as Trustee or By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Shareholder, as applicable, under --------------------------------------------
thie Credit Agreement. Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Senior VP, Secretary and Treasurer
-------------------------------------
[CORPORATE SEAL] CT COMMUNICATIONS NORTHEAST, INC., as
Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
------------------------------------
82
[CORPORATE SEAL] THE CONCORD TELEPHONE COMPANY,
as Borrower
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL] CTC INTERNET SERVICES, INC., as Borrower
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL] CTC EXCHANGE SERVICES, INC., as Borrower
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL] CT GLOBAL TELECOMMUNICATIONS, INC., as
Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: President
------------------------------------
[CORPORATE SEAL] CT COMMUNICATIONS NORTHEAST TRUST,
as Borrower
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL] CT COMMUNICATIONS NORTHEAST, INC., as
Borrower
By:
--------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
83
[CORPORATE SEAL] CT COMMUNICATIONS NORTHEAST TRUST,
as Borrower
Neither the Trustees nor the
Shareholders of CT Communications By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Northeast Trust shall be held --------------------------------------------
to any personal liability under as Trustee and not Individually
this Revolving Credit Note. Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Trustee
------------------------------------
84
FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: C. ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
85
COBANK, ACB, as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
86
WACHOVIA BANK, N.A., as Lender
By: /s/ ▇.▇. ▇▇▇▇▇▇ III
--------------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇ III
-------------------------------------
Title: VP
------------------------------------
87
Schedule 1
(Lenders and Commitments)
LENDER COMMITMENT COMMITMENT
PERCENTAGE
----------------------------------------------- ------------------------------------- -----------------------
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 41.666666667% $25,000,000
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
----------------------------------------------- ------------------------------------- -----------------------
Wachovia Bank,N.A. 38.333333333% $23,000,000
Corporate Banking, 6th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
----------------------------------------------- ------------------------------------- -----------------------
CoBank, ACB 20.00% $12,000,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
----------------------------------------------- ------------------------------------- -----------------------
88
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(t) - Debt and Guaranty Obligations; Subordinated Debt
Schedule 6.1(u) - Litigation
Schedule 6.1(w) - Communications Licenses/PUC Authorizations
Schedule 10.3 - Existing Liens
Schedule 10.4 - Existing Loans, Advances and Investments
89