Exhibit 2
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$15,000,000
CREDIT AGREEMENT
dated as of June 30, 1997,
by and among
C-TEC CORPORATION
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................-1-
SECTION 1.1 Definitions........................................-1-
SECTION 1.2 General............................................-9-
SECTION 1.3 Other Definitions and Provisions...................-9-
ARTICLE II TERM LOAN FACILITY................................-10-
SECTION 2.1 Term Loan.........................................-10-
SECTION 2.2 Procedure for Advance of Loan.....................-10-
SECTION 2.3 Repayment of Loan.................................-11-
SECTION 2.4 Optional Prepayments of Loan......................-11-
SECTION 2.5 Notes.............................................-11-
ARTICLE III GENERAL LOAN PROVISIONS...........................-12-
SECTION 3.1 Interest..........................................-12-
SECTION 3.2 Notice and Manner of Conversion or Continuation
of Loans..........................................-14-
SECTION 3.3 Commitment Fee....................................-14-
SECTION 3.4 Manner of Payment.................................-15-
SECTION 3.5 Crediting of Payments and Proceeds................-15-
SECTION 3.6 Adjustments.......................................-15-
SECTION 3.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Administrative Agent............-16-
SECTION 3.8 Changed Circumstances.............................-16-
SECTION 3.9 Indemnity.........................................-19-
SECTION 3.10 Capital Requirements..............................-19-
SECTION 3.11 Taxes.............................................-19-
SECTION 3.12 Change in Lending Office; Replacement Lenders.....-22-
ARTICLE IV CLOSING; CONDITIONS OF CLOSING AND BORROWING......-22-
SECTION 4.1 Closing...........................................-22-
SECTION 4.2 Conditions to Closing and Initial Loans...........-22-
SECTION 4.3 Conditions to All Loans...........................-25-
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER....-26-
SECTION 5.1 Representations and Warranties....................-26-
SECTION 5.2 Survival of Representations and Warranties, Etc...-26-
ARTICLE VI FINANCIAL INFORMATION AND NOTICES.................-26-
ARTICLE VII AFFIRMATIVE COVENANTS.............................-27-
ARTICLE VIII FINANCIAL COVENANTS...............................-27-
ARTICLE IX NEGATIVE COVENANTS................................-27-
ARTICLE X DEFAULT AND REMEDIES..............................-28-
SECTION 10.1 Events of Default.................................-28-
SECTION 10.2 Remedies..........................................-30-
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc...-30-
ARTICLE XI THE ADMINISTRATIVE AGENT..........................-31-
SECTION 11.1 Appointment.......................................-31-
SECTION 11.2 Delegation of Duties..............................-31-
SECTION 11.3 Exculpatory Provisions............................-31-
SECTION 11.4 Reliance by the Administrative Agent..............-32-
SECTION 11.5 Notice of Default.................................-32-
SECTION 11.6 Non-Reliance on the Administrative Agent and Other
Lenders...........................................-32-
SECTION 11.7 Indemnification...................................-33-
SECTION 11.8 The Administrative Agent in Its Individual
Capacity..........................................-34-
SECTION 11.9 Resignation of the Administrative Agent; Successor
Administrative Agent..............................-34-
ARTICLE XII MISCELLANEOUS.....................................-34-
SECTION 12.1 Notices...........................................-34-
SECTION 12.2 Expenses; Indemnity...............................-35-
SECTION 12.3 Set-off...........................................-36-
SECTION 12.4 Governing Law.....................................-36-
SECTION 12.5 Consent to Jurisdiction...........................-36-
SECTION 12.6 Binding Arbitration; Waiver of Jury Trial.........-37-
SECTION 12.7 Reversal of Payments..............................-38-
SECTION 12.8 Injunctive Relief.................................-38-
SECTION 12.9 Accounting Matters................................-38-
SECTION 12.10 Successors and Assigns; Participations............-38-
SECTION 12.11 Amendments, Waivers and Consents..................-42-
SECTION 12.12 Performance of Duties.............................-42-
SECTION 12.13 All Powers Coupled with Interest..................-42-
SECTION 12.14 Survival of Indemnities...........................-42-
SECTION 12.15 Titles and Captions...............................-42-
SECTION 12.16 Severability of Provisions........................-42-
SECTION 12.17 Counterparts......................................-44-
SECTION 12.18 Term of Agreement.................................-42-
EXHIBITS
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Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Payment
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Officer's Certificate
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Notice of Account Designation
Exhibit H - Form of Pledge Agreement
Exhibit I - Form of Assumption Agreement
SCHEDULES
Schedule 1.1(a) - Lenders and Commitments
Schedule 1.1(b) - Plan of Reorganization
CREDIT AGREEMENT, dated as of the 30 day of June, 1997, by and among
C-TEC CORPORATION ("C-TEC"), 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
--------------------
C-TEC has requested, and the Lenders have agreed, to extend certain
credit facilities to the Borrower referred to below 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
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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 11.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
12.1.
"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 ten percent (10%) 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.
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
3.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 12.10.
"Assumption Agreement" means, with respect to any Person, any Assumption
Agreement executed in favor of the Administrative Agent for the ratable
benefit of the Administrative Agent and Lenders and substantially in the form
of Exhibit I, as amended, restated or otherwise modified.
"Assumption Date" means the date that CCSM has assumed all of the
Obligations under this Agreement pursuant to an Assumption Agreement in
accordance with Section 2.6.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 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 Loan bearing interest at a rate based upon
the Base Rate as provided in Section 3.1(a).
"Borrower" means, prior to the Assumption Date, C-TEC in its capacity as
borrower hereunder, and on and after the Assumption Date, CCSM in its capacity
as borrower hereunder.
"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.
"Cable Systems Credit Facility" means the credit agreement dated as of
June 30, 1997, by and among C-TEC Cable Systems, Inc., ComVideo Systems, Inc.
and C-TEC Cable Systems of New York, Inc, as borrowers, First Union, as
administrative agent, and the lenders party thereto, as amended, restated or
otherwise modified.
"CCI" means Commonwealth Communications, Inc.
"CCSM" means Cable Michigan, Inc., and its successors.
"CCSM Credit Facility" means the credit agreement dated as of June 30,
1997, by and among CCSM, as borrower, First Union, as administrative agent,
and the lenders party thereto, as amended, restated or otherwise modified.
"C-TEC" means C-TEC Corporation, and its successors.
"C-TEC Credit Facility" means the credit agreement dated as of June 30,
1997, by and among C-TEC, as borrower, First Union, as administrative agent,
and the lenders party thereto, as amended, restated or otherwise modified.
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 4.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Combined" means, when used in reference to financial statements or
financial statement items of any Person prior to Assumption Date, such
statements or items on a combined basis in accordance with applicable
principles of combination under GAAP, and on and after the Assumption Date,
such statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Commitment" means (a) as to any Lender, the obligation of such Lender
to make the Loans to the account of the Borrower hereunder in an aggregate
principal amount not to exceed the amount set forth opposite such Lender's
name on Schedule 1.1(a), as such amounts may be reduced or modified at any
time or from time to time pursuant to the terms hereof and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Loans. The
Commitment of all Lenders as of the Closing Date shall be Fifteen Million
Dollars ($15,000,000).
"Commitment Percentage" means, as to any Lender at any time, the ratio
of (a) the amount of the Commitment of such Lender to (b) the Commitment of
all of the Lenders.
"Commonwealth" means Commonwealth Telephone Company and its successors.
"Commonwealth Long Distance" means Commonwealth Long Distance Company
and its successors.
"Debt" means, with respect to any Person at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness for borrowed money including but
not limited to obligations evidenced by bonds, debentures, notes or other
similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due, (c) all obligations of any such Person as lessee under
Capital Leases, (d) all Debt of any other Person secured by a Lien on any
asset of any such Person, (e) all Guaranty Obligations of any such Person, (f)
all obligations, contingent or otherwise, of any such person relative to the
face amount of letters of credit, whether drawn or not drawn, and banker's
acceptances issued for the account of any such person and (g) all obligations
incurred by any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 10.1 which with
the passage of time, the giving of notice or both, would constitute an Event
of Default.
"Designated Subsidiaries" means, prior to the Assumption Date,
Commonwealth, CCI and Commonwealth Long Distance, and any of their
Subsidiaries, and on and after the Assumption Date, all Subsidiaries (as such
term is defined in the CCSM Credit Facility) of the Borrower.
"Dollars" or "$" 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 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, (c) already a Lender hereunder (whether as an original party
to this Agreement or as the assignee of another Lender), (d) 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 (e) any
other Person that has been approved in writing as an Eligible Assignee by the
Borrower and the Administrative Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person who together with the 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 any Lender.
"Event of Default" means any of the events specified in Section 10.1,
provided that any requirement for passage of time, giving of notice, or both,
has been satisfied.
"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.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its Designated
Subsidiaries ending on December 31.
"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 throughout the period indicated and consistent with prior
financial practice (except for changes in such practice with which the
Borrowers' independent certified public accountants have concurred).
"Interest Period" shall have the meaning assigned thereto in Section
3.1(b).
"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 12.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Leverage Ratio" means as of any date of determination prior to the
Assumption Date, the ratio as of such date determined in accordance with
Section 8.1 of the C-TEC Credit Facility as incorporated by reference herein,
and on and after the Assumption Date, the ratio as of such date determined in
accordance with Section 9.1 of the CCSM Credit Facility as incorporated herein
by reference.
"LIBOR" means the rate for deposits in Dollars for a period equal to the
Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such rate
is not available, then "LIBOR" shall mean the rate per annum at which, as
determined by the Administrative Agent, Dollars in the amount of $5,000,000
are being offered to leading banks at approximately 11:00 a.m. London time,
two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"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
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1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 3.1(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" means any loan made to the Borrower pursuant to Section 2.1 and
all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Notes, any
Hedging Agreement executed by any Lender and each other document referenced in
Article IV or otherwise required to be delivered by or on behalf of the
Borrower or its Designated Subsidiaries pursuant to this Agreement, all as may
be amended, restated or otherwise modified.
"Material Adverse Effect" means a material adverse effect on the
business, operations or financial condition of the Borrower and its Designated
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under the Loan Documents to which it is a party.
"Mercom" means Mercom, Inc. and its successors.
"Mercom Pledge Agreement" means the pledge agreement with respect to the
capital stock of Mercom held by the Borrower executed by the Borrower in favor
of the Administrative Agent for the ratable benefit of itself and the other
Lenders, substantially in the form of Exhibit H, as amended, restated or
otherwise modified.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six
years.
"Net Income" means, with respect to any Person for any period, the net
income (or loss) of such Person for such period determined in accordance with
GAAP; provided, that there shall be excluded from net income the income of any
Person (other than a Wholly-Owned Subsidiary) in which such Person has an
ownership interest, except to the extent received in cash by such Person.
"Notes" means the term loan notes made by the Borrower payable to the
order of each Lender, substantially in the form of Exhibit A, evidencing the
Debt incurred by the Borrower pursuant to the Term Loan Facility, and any
amendments and modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in whole or in
part.
"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 3.2.
"Notice of Payment" shall have the meaning assigned thereto in Section
2.4.
"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 similar petition) the Loans and (b) all
other fees and commissions (including attorney's fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and
duties owing by the 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, and whether or not for
the payment of money under or in respect of this Agreement, any Note, any
Hedging Agreement with a Lender or Affiliate thereof or any of the other Loan
Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 4.2.
"Other Taxes" shall have the meaning assigned thereto in Section 3.11(c).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"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 the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding
six years been maintained for the employees of the Borrower or any of their
current or former ERISA Affiliates.
"Person" means an individual, corporation, partnership, limited
liability company, limited liability 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.
"Register" shall have the meaning assigned thereto in Section 12.10(d).
"Reorganization" means the reorganization described in Schedule 1.1(b),
as such Schedule may be supplemented or otherwise amended with the prior
written approval of the Required Lenders.
"Required Lenders" means, at any date, any combination of holders of at
least fifty-one percent (51%) of the aggregate unpaid principal amount of the
Notes, or if no amounts are outstanding under the Notes, any combination of
Lenders whose Commitment Percentages aggregate at least fifty-one percent
(51%).
"Solvent" means, as to the Borrower and its Designated Subsidiaries on a
particular date, that such Persons, taken as a whole and on a Combined basis
(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.
"Subsidiary" means as to any Person, any corporation, partnership 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 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 of any other class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency).
"Taxes" shall have the meaning assigned thereto in Section 3.11(a).
"Termination Date" means June 30, 1999.
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA (as to which the thirty (30) day notice requirement has
not been waived by the PBGC), or (b) the withdrawal of the 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
filing of a notice of intent to terminate a Pension Plan under Section 4041(c)
of ERISA, or (d) the institution of proceedings under Section 4042 of ERISA 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 reasonably
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 the 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 Sections
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.
"Term Loan Facility" means the term loan facility established pursuant
to Article II hereof.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of
the shares of capital stock or other ownership interests of which are,
directly or indirectly, owned or controlled by any Person and/or one or more
of its Wholly-Owned Subsidiaries.
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.
Unless expressly specified otherwise, any references to the "transactions
contemplated by this Agreement" or the "transactions contemplated hereby" (or
similar references) shall not be a reference to the Reorganization. Unless
expressly specified otherwise, capitalized terms defined in Schedule 1.1(b)
are used herein with the meanings assigned to such terms in such Schedule.
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 Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Incorporation by Reference. The definitions of all capitalized
terms used in the provisions of the C-TEC Credit Facility and the CCSM Credit
Facility which provisions are incorporated by reference herein, and which
definitions are not otherwise set forth herein, are also incorporated by
reference herein.
(c) 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
TERM LOAN FACILITY
SECTION 2.1 Term Loan. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make a Loan to the Borrower on
or within ninety (90) days after the Closing Date. The Loan shall be funded
by the Lenders in a single advance during such ninety (90) day period and
shall be funded by each Lender in a principal amount equal to such Lender's
Commitment Percentage of the aggregate principal amount of the advance
requested by the Borrower. The aggregate principal amount of the Loan
requested by the Borrower during such ninety (90) day period shall not exceed
the total Commitment.
SECTION 2.2 Procedure for Advance of Loan.
(a) Requests for Borrowing. In connection with the advance of the
Loan pursuant to Section 2.1, the Borrower 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 a Base Rate Loan and (ii) at least three (3) Business
Days before a 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, (C) whether the Loan is to be a LIBOR Rate Loan or Base Rate Loan
or a combination thereof (provided that LIBOR Rate Loans shall not be
available until three (3) Business Days after the Closing Date) and the
amounts allocable to each and (D) in the case of a LIBOR Rate Loan, the
duration of the initial 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
receipt of the Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative
Agent, such Lender's Commitment Percentage of the amount requested pursuant to
Section 2.2(a). The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of the borrowing requested pursuant to Section
2.2(a) in immediately available funds by crediting or wiring such proceeds to
the deposit account of the Borrower identified in the most recent Notice of
Account Designation delivered by the Borrower to the Administrative Agent or
as may be otherwise agreed upon by the Borrower and the Administrative Agent
from time to time. The Administrative Agent shall not be obligated to
disburse the portion of the proceeds of the Loans requested pursuant to
Section 2.2(a) to the extent that any Lender has not made available to the
Administrative Agent its Commitment Percentage of such Loan.
SECTION 2.3 Repayment of Loan.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of all Loans in full, together with all accrued
but unpaid interest thereon, on the Termination Date.
(b) Mandatory Repayment of Excess Loans. If at any time the
outstanding principal amount of all Loans exceeds the Commitment, the Borrower
shall repay immediately upon notice from the Administrative Agent, by payment
to the Administrative Agent for the account of the Lenders, the Loans in an
amount equal to such excess.
(c) Other Mandatory Prepayments. If (i) prior to the Assumption Date,
the Obligations under the C-TEC Credit Facility have been paid in full and the
Commitments thereunder terminated or (ii) on and after the Assumption Date,
the Obligations under the CCSM Credit Facility have been paid in full and the
Commitments thereunder terminated, the Borrower shall within three Business
Days repay the outstanding principal amount of the Loans in full, together
with all accrued but unpaid interest thereon and any other outstanding
Obligations.
SECTION 2.4 Optional Prepayments of Loan. The Borrower shall have
the right at any time and from time to time, upon at least three (3) Business
Days prior written notice in the form attached hereto as Exhibit C (a "Notice
of Payment") to the Administrative Agent, to prepay the Loan in whole or in
part without premium or penalty except as provided below. Each optional
prepayment of the Loan hereunder shall be in an aggregate principal amount of
at least $2,000,000 or any whole multiple of $500,000 in excess thereof, shall
be accompanied by any payment required under Section 3.9.
SECTION 2.5 Notes. Each Lender's Loan and the obligation of the
Borrower to repay such Loan shall be evidenced by a Note payable to the order
of such Lender. Each Note shall bear interest on the unpaid principal amount
thereof at the applicable interest rate per annum specified in Section 3.1.
SECTION 2.6 Assumption Agreement. C-TEC may not make the Mercom
Contribution unless C-TEC causes CCSM to execute an Assumption Agreement, a
supplement to the Mercom Pledge Agreement and any other documents reasonably
requested by the Administrative Agent such that CCSM becomes the Borrower
under this Agreement and assumes all outstanding Obligations hereunder and the
Collateral referred to in the Mercom Pledge Agreement continues as security
therefor. Each Lender and the Administrative Agent agrees that upon CSSM
becoming the Borrower under this Agreement and assuming all outstanding
Obligations, as contemplated by this Section 2.6, C-TEC shall be
unconditionally and absolutely released and discharged from all liability and
responsibility with respect to any Obligations, whether arising and existing
before or after the Assumption Date.
ARTICLE III
GENERAL LOAN PROVISIONS
SECTION 3.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of the Borrower, the aggregate principal balance of the
Loans or any portion thereof shall bear interest at the Base Rate or the LIBOR
Rate plus, in each case, the Applicable Margin as set forth below (provided
that the LIBOR Rate shall not be available until three (3) Business Days after
the Closing Date). The Borrower shall select the rate of interest and
Interest Period, if any, applicable to any 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 3.2. Each Loan or
portion thereof bearing interest based on the Base Rate shall be a "Base Rate
Loan" and each Loan or portion thereof bearing interest based on the LIBOR
Rate shall be a "LIBOR Rate Loan". Any Loan or any portion thereof as to
which the Borrower has 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, the
Borrower, by giving notice at the times described in Section 3.1(a), shall
elect an interest period (each, an "Interest Period") to be applicable to such
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 no interest period shall be selected by the Borrower which would
result in the repayment of any LIBOR Rate Loan pursuant to Section 2.3 prior
to the end of an Interest Period; and
(v) there shall be no more than ten (10) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
3.1(a) with respect to the Loans (the "Applicable Margin") shall (i) on the
Closing Date equal the percentages set forth in the certificate delivered
pursuant to Section 4.2(d)(iv) and (ii) for each fiscal quarter thereafter
prior to the Assumption Date 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:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ---------------------------
>3.00x 0.00% .750%
>2.50 < 3.00x 0.00% .625%
-
>2.00 < 2.50x 0.00% .500%
-
< 2.00x 0.00% .425%
-
and on and after the Assumption Date 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:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ---------------------------
>4.75x .125% 1.375%
>4.25 < 4.75x 0.00% 1.125%
-
>3.50 < 4.25x 0.00% .875%
-
< 3.50x 0.00% .625%
-
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 Borrower and
its Designated Subsidiaries and the accompanying Officer's Compliance
Certificate setting forth the Leverage Ratio of the Borrower and its Designated
Subsidiaries as of the most recent fiscal quarter end. Subject to Section
3.1(d), in the event the Borrower fails to deliver such financial statements
and certificate within the time required prior to the Assumption Date by
Section 6.2 of the C-TEC Credit Facility and on and after the Assumption Date
by Section 7.2 of the CCSM Credit Facility, the Applicable Margin shall be the
relevant highest Applicable Margin set forth above until the delivery of such
financial statements and certificate.
(d) Default Rate. Upon the occurrence and during the continuance of
an Event of Default, (i) the Borrower shall no longer have the option to
request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans which are past
due shall bear interest at a rate per annum two percent (2%) in excess of the
rate then applicable to LIBOR Rate Loans 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 which are past due shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate then applicable to Base Rate Loans.
(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 September 30, 1997; 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 for all Base Rate
Loans provided hereunder and all fees shall be computed on the basis of a
365-day year or 366-day year, as applicable, and assessed for the actual
number of days elapsed. All interest for LIBOR Rate Loans provided hereunder
shall be computed on the basis of a 360-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 Notes
charged or collected pursuant to the terms of this Agreement or pursuant to
any of the 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 promptly refund to the Borrower any interest
received by the Lenders in excess of the maximum lawful rate or shall apply
such excess to the principal balance of the Obligations. It is the intent
hereof that the Borrower 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 Borrower under Applicable Law.
SECTION 3.2 Notice and Manner of Conversion or Continuation of
Loans. Provided that no Event of Default has occurred and is then continuing,
the Borrower shall have the option to (a) convert at any time 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 or (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 $2,000,000 or a whole multiple of $500,000 in excess thereof
into Base Rate Loans or (ii) continue such LIBOR Rate Loans as LIBOR Rate
Loans. Whenever the Borrower desires to convert or continue Loans as provided
above, the Borrower shall give the Administrative Agent irrevocable prior
written notice in the form attached as Exhibit D (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
Loan is to be effective specifying (A) the 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 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.
SECTION 3.3 Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to .20% of the average daily unused
portion of the Commitment for the period commencing on the forty-sixth day
after the Closing Date through the earlier of (i) the date when the
outstanding Term Loan equals the total Commitment and (ii) the date ninety (90)
days after the Closing Date. Such commitment fee shall be due and payable on
the date ninety (90) days after the Closing Date and shall be distributed by
the Administrative Agent to the Lenders pro rata in accordance with the
Lenders' respective Commitment Percentages.
SECTION 3.4 Manner of Payment. Each payment by the Borrower on
account of the principal of or interest on the Loans or of any fee, commission
or other amounts payable to the Lenders under this Agreement or any 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, 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 10.1, 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 and shall wire advice of the amount of such credit to each Lender.
Each payment to the Administrative Agent of Administrative Agent's fees or
expenses shall be made for the account of the Administrative Agent and any
amount payable to any Lender under Sections 3.8, 3.9, 3.10, 3.11 or 12.2 shall
be paid to the Administrative Agent for the account of the applicable Lender.
SECTION 3.5 Crediting of Payments and Proceeds. In the event that
the Borrower shall fail to pay any of the Obligations when due and the
Obligations have been accelerated pursuant to Section 10.2, all payments
received by the Lenders upon the 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 Borrower hereunder, then to all indemnity
obligations then due and payable by the Borrower hereunder, then to all
Administrative Agent'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 Notes (pro rata in accordance with all such amounts due) and
then to the principal amount of the Notes, in that order.
SECTION 3.6 Adjustments. If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or if any Lender shall at any time receive any collateral in respect
to its Loans (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 such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans, 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 Borrower agrees that, to the fullest
extent allowed by law, each Lender so purchasing a portion of another Lender's
Loans 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 3.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans 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 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 Borrower 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 of such Lender's Commitment
Percentage of such borrowing, 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 Lender's Commitment
Percentage of such borrowing 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 Borrower. The
failure of any Lender to make its Commitment Percentage of any Loan available
shall not relieve it or any other Lender of its obligation, if any, hereunder
to make its Commitment Percentage of such Loan available on such borrowing
date, but no Lender shall be responsible for the failure of any other Lender
to make its Commitment Percentage of such Loan available on the borrowing date.
SECTION 3.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect
to any Interest Period:
(i) at least three (3) Lenders (or in any event the Required
lenders) advise the Administrative Agent 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 such Lenders for such
Interest Period, or
(ii) at least three (3) Lenders (or in any event the Required
Lenders) advise the Administrative Agent that the LIBOR Rate as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Lenders of funding their LIBOR Rate Loans for
such Interest Period,
then the Administrative Agent shall forthwith give prompt written notice
thereof to the Borrower and the Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan
shall be suspended, and the Borrower shall repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such LIBOR Rate
Loans 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. Unless the Borrower notifies the
Administrative Agent at least two Business Days before the date of any affected
borrowing or conversion or continuation specified in any applicable Notice of
Revolving Credit Borrowing, Notice of Term Loan Borrowing or Notice of
Conversion/Continuation that they elect not to borrow or convert or continue
Loans on the date specified therein, the Lenders shall make, convert or
continue the Loans in the amount specified by the Borrower in the applicable
notice, but such Loans shall be made, converted or continued as Base Rate Loans
instead of LIBOR Rate Loans.
(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 any of their
respective Lending Offices) with any request or directive (whether or not
having the force of law) of any such Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) 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 Borrower and the other Lenders. Thereafter, until
such Lender notifies the Administrative Agent and the Borrower that such
circumstances no longer exist, (i) the obligation of such Lender to make LIBOR
Rate Loans, convert Base Rate Loans into LIBOR Rate Loans or continue LIBOR
Rate Loans as LIBOR Rate Loans shall be suspended, and (ii) each LIBOR Rate
Loan of such Lender then outstanding shall be converted to a Base Rate Loan
either (A) on the last day of the then current Interest Period if such Lender
may lawfully continue to maintain and fund such Loan as a LIBOR Rate Loan to
such day or (B) immediately if such Lender shall determine that it may not
lawfully continue to maintain and fund such Loan as a LIBOR Rate Loan to such
day.
(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 any of their respective Lending
Offices) with any request or directive (whether or not having the force of
law) of such 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 Note or shall change the basis of taxation of payments to any of the
Lenders (or any of their respective Lending Offices) of the principal of or
interest on any Note 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 any of their respective Lending Offices 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
(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 any of their respective Lending Offices),
other than any such amount included in the calculation of Eurodollar Reserve
Percentage, or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any 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 to reduce the yield or amount of
any sum received or receivable by any of the Lenders under this Agreement or
under the Notes in respect of a LIBOR Rate Loan, then such Lender shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower of such fact and demand compensation therefor
and, within fifteen (15) days after such notice by the Administrative Agent,
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or Lenders for such increased cost or reduction. Each
Lender will promptly notify the Administrative Agent of any event of which it
has knowledge which will entitle such Lender to compensation pursuant to this
Section 3.8(c) and after receipt of such notice, the Administrative Agent will
promptly notify the Borrower of such event; provided, that neither any Lender
nor the Administrative Agent shall incur any liability whatsoever to any other
Lender or the Borrower 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, as applicable, 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 Borrower through the Administrative Agent and
shall be conclusively presumed to be correct save for clearly demonstrable
error.
(d) The Borrower shall not be required to compensate a Lender for any
increased costs pursuant to this Section 3.8 incurred by such Lender more than
90 days prior to its request to the Administrative Agent for such compensation.
SECTION 3.9 Indemnity. The Borrower hereby indemnifies each of
the Lenders against any reasonable loss or expense (excluding any loss of
margin over the LIBOR Rate for the period after any such payment or conversion
or failure to borrow, prepay or convert) 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 Loan (a) as a consequence of any
failure by the Borrower 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
Borrower to borrow on a date specified therefor in a Notice of Borrowing or
Notice of Continuation/Conversion 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 good faith but otherwise 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 Borrower through the Administrative Agent and
shall be conclusively presumed to be correct save for clearly demonstrable
error.
SECTION 3.10 Capital Requirements. If, after the date hereof,
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 Borrower shall pay to such Lender from
time to time as specified in a reasonably detailed calculation 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
Borrower and the Administrative Agent by such Lender, shall, in the absence of
clearly demonstrable error, be presumed to be correct and binding for all
purposes. The Borrower will not be required to compensate a Lender for any
increased amounts to this Section 3.10 incurred by such Lender more than 90
days prior to its request to the Borrower for such compensation.
SECTION 3.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes 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) taxes imposed on or measured by the overall net income of any
Lender or its Lending Office or the Administrative Agent or the Administrative
Agent's Office, as the case may be, and all franchise or similar taxes
measured by capital or net worth of such Lender or its Lending Office or the
Administrative Agent or the Administrative Agent's Office, as the case may be,
in each case imposed: (A) by the jurisdiction under the laws of which such
Lender or the Administrative Agent, as the case may be, is organized, or in
which its principal executive office is located, (B) by the jurisdiction in
which the Lending Office of such Lender or the Administrative Agent's Office,
as applicable, is located or (C) solely by reason of such Lender or the
Administrative Agent, as the case may be, doing business in the jurisdiction
imposing such tax, other than as a result of this Agreement or any Note or any
transaction contemplated hereby and (ii) in the case of each Lender, any
United States withholding tax imposed on such payments but only to the extent
that such Lender is subject to United States withholding tax at the time such
Lender first becomes a party to this Agreement (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note or 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 3.11) 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 Borrower shall make such deductions, (C)
the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (D) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxing authority or other authority in the manner provided in
Section 3.11(e).
(b) Refunds. If the Borrower pays any additional amount under Section
3.11 (a "Tax Payment") and any Lender or Affiliate thereof effectively obtains
a refund of tax or credit against tax by reason of the Tax Payment (a "Tax
Credit") and such Tax Credit is, in the reasonable judgement of such Lender or
Affiliate, attributable to such Tax Payment, then such Lender, after actual
receipt of such Tax Credit or actual receipt of the benefits thereof, shall
promptly reimburse the Borrower for such amount as such Lender shall reasonably
determine to be the proportion of the Tax Credit as would leave the Borrower
(after that reimbursement) in no better or worse position than it would have
been if the Tax Payment had not been required; provided, that no Lender shall
be required to make any reimbursement if it reasonably believes the making of
such reimbursement would cause it to lose the benefit of the Tax Credit or
would adversely affect in any other respect its tax position. Subject to the
other terms hereof, any claim by a Lender for a Tax Credit shall be made in a
manner, order and amount as such Lender determines in its sole and absolute
discretion. Except to the extent necessary to evaluate any Tax Credit, no
Lender shall be obligated to disclose information regarding its tax affairs or
computations to the Borrower, it being understood and agreed that in no event
shall any Lender be required to disclose information regarding its tax
position that it deems to be confidential (other than with respect to the Tax
Credit).
(c) Stamp and Other Taxes. In addition to the Taxes described in
Section 3.11(a), the Borrower 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 Loans, the
other Loan Documents, or the perfection of any rights or security interest in
respect thereto (hereinafter referred to as "Other Taxes").
(d) Indemnity. The Borrower 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 3.11) 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.
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.
(e) Evidence of Payment. Within thirty (30) days after the date of
any payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 12.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence
of payment satisfactory to the Administrative Agent.
(f) 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 Borrower, 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 Borrower, 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 Borrower,
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 Borrower 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.
(g) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.11 shall survive the payment in full of
the Obligations and the termination of the Commitments.
SECTION 3.12 Change in Lending Office; Replacement Lenders. (a)
Each Lender agrees that on the occurrence of any event giving rise to the
operation of Sections 3.8(b), 3.8(c), 3.10, 3.11(a) or 3.11(c) with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
Lending Office for any Loans affected by such event; provided, that such
designation is made on such terms that such Lender and its Lending Office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 3.12(a) shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender provided in Sections
3.8, 3.10 or 3.11.
(b) At any time within one hundred eighty (180) days after any payment
by the Borrower of any amount pursuant to or by reason of the operation of
Sections 3.8(b), 3.8(c), 3.10, 3.11(a) or 3.11(c), the Borrower, by writing
addressed to the Administrative Agent and each Lender that requested the
payment of such amount, may nominate or propose an Eligible Assignee that is
willing to become the assignee of the Commitment and other obligations of such
Lender (a "Replacement Lender") pursuant to Section 12.10(b), and within
fifteen (15) Business Days after receipt of such proposal from the Borrower,
each such Lender shall execute and deliver to the Administrative Agent an
Assignment and Acceptance of its entire Commitment in favor of the proposed
Replacement Lender in accordance with Section 12.10(b) unless, prior to the
expiration of such period, the Administrative Agent shall have notified the
Borrower and such Lender that the proposed Replacement Lender is not
reasonably acceptable to the Administrative Agent; provided, that in no event
will (i) any Lender be required to enter into an Assignment and Acceptance at
a price less than par plus accrued interest and prorated fees and other costs
due hereunder to the effective date thereof, (ii) either of the Administrative
Agent or Lenders be obligated to assist the Borrower in identifying any
Eligible Assignees that are willing to become such a Replacement Lender or
(iii) any such assignment be required if consummation conflicts with any
Applicable Law. The assignment fee payable to the Administrative Agent in
connection with any such assignment pursuant to Section 12.10(b) shall be for
the account of the Borrower.
SECTION 3.13 Use of Proceeds. The Borrower shall use the proceeds
of the Loans to make an RCN Capital Contribution or for general corporate
proposes.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 4.1 Closing. The closing shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on June
30, 1997, or at such other place or on such other date as the Administrative
Agent and the Borrower shall mutually agree.
SECTION 4.2 Conditions to Closing and Initial Loans. The
obligation of the Lenders to close this Agreement and to make the initial
Loans is subject to the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Notes, the Mercom
Pledge Agreement 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 or Event of Default shall
exist, and the Borrower shall have delivered original counterparts thereof to
the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers's Certificate. The Administrative Agent
shall have received a certificate from the chief executive officer or chief
financial officer of the Borrower in form and substance satisfactory to the
Administrative Agent, to the effect that all representations and warranties of
the Borrower contained in this Agreement and the other Loan Documents are
true, correct and complete; that the Borrower is 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
Borrower has satisfied each of the closing conditions.
(ii) Certificate of Secretary. The Administrative Agent
shall have received a certificate of the secretary or assistant secretary of
the Borrower certifying that attached thereto is a true and complete copy of
the articles of incorporation of the Borrower and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in the
applicable jurisdiction; that attached thereto is a true and complete copy of
the bylaws of the Borrower, as in effect on the date of such certification;
that attached thereto is a true and complete copy of resolutions duly adopted
by the Board of Directors of the Borrower authorizing the borrowings
contemplated hereunder and the execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is a party; and
as to the incumbency and genuineness of the signature of each officer of the
Borrower executing Loan Documents to which it is a party.
(iii) Certificates of Good Standing. The Administrative
Agent shall have received long-form certificates as of a recent date of the
good standing of the Borrower under the laws of its jurisdiction of
organization and a certificate of the relevant taxing authorities of such
jurisdiction certifying that the Borrower has filed required tax returns with
respect to any franchise taxes and owes no delinquent franchise taxes.
(iv) Opinions of Counsel. The Administrative Agent shall
have received favorable opinions of counsel to the Borrower addressed to the
Administrative Agent and the Lenders (A) with respect to the Borrower, the
Loan Documents and such other matters as the Lenders shall request and (B)
with respect to FCC and other regulatory matters, each in form and substance
satisfactory to the Administrative Agent.
(v) Insurance. The Administrative Agent shall have
received a certificate of insurance in form and substance satisfactory to the
Administrative Agent.
(c) Collateral.
(i) Filings and Recordings. All Form UCC-1 financing statements
that are necessary to perfect the security interests of the Lenders granted
under the Mercom Pledge Agreement in the capital stock of Mercom shall have
been delivered to the Administrative Agent for filing or recordation in all
appropriate locations and the Administrative Agent shall have received
evidence satisfactory thereto that upon such filing or recordation by the
Administrative Agent such security interests will constitute valid and
perfected first priority Liens subject to Liens described prior to the
Assumption Date in Section 9.2 of the C-TEC Credit Facility and on and after
the Assumption Date in Section 10.2 of the CCSM Credit Facility.
(ii) Pledged Stock. The Administrative Agent shall have
received original stock certificates evidencing the capital stock pledged
pursuant to the Mercom Pledge Agreement, together with an appropriate undated
stock power for each stock certificate duly executed in blank by the
registered owner thereof.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents, if any be required, 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
shall have been obtained.
(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, or which in
the Administrative Agent's good faith determination could reasonably be
expected to have a Material Adverse Effect.
(e) Financial Matters.
(i) Financial Condition Certificate. The Borrower shall
have delivered to the Administrative Agent a certificate, in form and
substance satisfactory to the Administrative Agent, and certified as accurate
by the chief executive officer or chief financial officer of the Borrower,
that (A) the Borrower and its Designated Subsidiaries, taken as a whole, are
Solvent, (B) the Borrower's payables are current and not past due, (C) attached
thereto is a pro forma balance sheet of the Borrower and its Designated
Subsidiaries setting forth on a pro forma basis the financial condition of the
Borrower and its Designated Subsidiaries on a Combined basis as of that 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
Article VIII hereof, (D) attached thereto are the financial projections
(including without limitation pro forma budgets for Capital Expenditures)
previously delivered to the Administrative Agent representing the good faith
opinions of the Borrower 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 3.1(c).
(ii) Payment at Closing; Fee Letters. There shall have
been paid by the Borrower to the Administrative Agent and the Lenders any
accrued and unpaid fees or commissions due hereunder (including, without
limitation, legal fees and expenses), 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.
(f) Miscellaneous.
(i) Notices of Borrowing. The Administrative Agent shall
have received a Notice of Borrowing from the Borrower in accordance with
Section 2.2(a) with respect to any Loans to be made on the Closing Date, and a
Notice of Account Designation specifying the account or accounts to which the
proceeds of any 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 satisfactory in form and substance to
the Lenders. The Lenders shall have received copies of all other instruments
and other evidence as the Administrative Agent may reasonably request, in form
and substance 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 Borrower shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent reasonably requests certified by a
secretary or assistant secretary of the Borrower as a true and correct copy
thereof.
SECTION 4.3 Conditions to All Loans. The obligations of the
Lenders to make any Loan is subject to the satisfaction of the following
conditions precedent on the relevant borrowing date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article V shall be true and
correct on and as of such borrowing date with the same effect as if made on
and as of such date (except where such representation or warranty is
specifically made as of an earlier date in which case it 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 on the borrowing date with respect
to such Loan or after giving effect to the Loans to be made on such date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 5.1 Representations and Warranties. To induce the
Administrative Agent to enter into this Agreement and the Lenders to make the
Loans, (a) on the date hereof and on any borrowing date prior to the
Assumption Date, each representation and warranty contained in Article V of
the C-TEC Credit Facility is hereby made and confirmed by the Borrower in
favor of the Administrative Agent and Lenders and, in furtherance thereof, each
such representation and warranty is hereby incorporated by reference as if
fully set forth herein (provided that clause (i) of Section 5.1(d) of the
C-TEC Credit Facility as herein confirmed and incorporated by reference is
hereby qualified and made subject to any Governmental Approval contemplated by
Section 19 of the Mercom Pledge Agreement); and (b) and on any borrowing date
on and after the Assumption Date, each representation and warranty contained
in Article VI of the CCSM Credit Facility is hereby made and confirmed by the
Borrower in favor of the Administrative Agent and Lenders and, in furtherance
thereof, each such representation and warranty is hereby incorporated by
reference as if fully set forth herein.
SECTION 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties incorporated by reference in this Article V 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 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.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
Until all principal and interest on the Loans and all fees hereunder
have been paid in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, the Borrower will
(a) prior to the Assumption Date, comply with Article VI of the C-TEC Credit
Facility and in furtherance thereof, each section thereof is hereby
incorporated by reference as if fully set forth herein and (b) on and after the
Assumption Date, comply with Article VII of the CCSM Credit Facility and in
furtherance thereof, each section thereof is hereby incorporated by reference
as if fully set forth herein.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until all of the principal and interest on the Loans and all fees
hereunder have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 12.11, the
Borrower will (a) prior to the Assumption Date, comply with Article VII of the
C-TEC Credit Facility and in furtherance thereof, each section thereof is
hereby incorporated by reference as if fully set forth herein and (b) on and
after the Assumption Date, comply with Article VIII of the CCSM Credit
Facility (other than Section 8.10 thereof) and in furtherance thereof, each
section thereof (other than Section 8.10 thereof) is hereby incorporated by
reference as if fully set forth herein. Any covenant of the Borrower to
deliver documents, certificates or other information to the Administrative
Agent shall be deemed complied with if the Borrower shall have complied with
such covenant pursuant to the C-TEC Credit Facility or the CCSM Credit
Facility, as the case may be.
ARTICLE VIII
FINANCIAL COVENANTS
Until all of the principal and interest on the Loans and fees hereunder
have been paid in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, the Borrower and its
Designated Subsidiaries on a Combined basis will (a) prior to the Assumption
Date, comply with Article VIII of the C-TEC Credit Facility and in furtherance
thereof, each section thereof is hereby incorporated by reference as if fully
set forth herein, and (b) on and after the Assumption Date, comply with
Article IX of the CCSM Credit Facility and in furtherance thereof, each
section thereof is hereby incorporated by reference as if fully set forth
herein.
ARTICLE IX
NEGATIVE COVENANTS
Until all of the principal and interest on the Loans and all fees
hereunder have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner set forth in Section 12.11 hereof, the
Borrower will (a) prior to the Assumption Date, comply with Article IX of the
C-TEC Credit Facility and in furtherance thereof, each section thereof is
hereby incorporated by reference as if fully set forth herein, and (b) on and
after the Assumption Date, comply with Article X of the CCSM Credit Facility
and in furtherance thereof, each section thereof is hereby incorporated by
reference as if fully set forth herein.
ARTICLE X
DEFAULT AND REMEDIES
SECTION 10.1 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 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. The Borrower shall
default in any payment of principal of any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise)
of interest on any Loan or Note or any fees hereunder, and such default shall
continue unremedied for five (5) Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Borrower or any of its Designated Subsidiaries 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. The Borrower shall
default in the performance or observance of any covenant or agreement
contained, prior to the Assumption Date in Section 6.5(e) or Articles VIII or
IX (other than Sections 9.8 and 9.9) of the C-TEC Credit Facility and, on and
after the Assumption Date, in Section 7.5(e) or Articles IX or X (other than
Sections 9.8 and 9.9) of the CCSM Credit Facility, in each case as
incorporated by reference.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any of its Designated Subsidiaries shall default in the
performance or observance of any term, covenant, condition or agreement
contained in this Agreement (other than as specifically provided for in this
Section 10.1) 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
Borrower by the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement and such amount is not paid within five
(5) Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Designated
Subsidiaries shall (i) default in the payment of any Debt (other than the
Notes) 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, (ii) default in the observance or
performance of any other agreement or condition relating to any Debt (other
than the Notes) 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 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) or (iii) prior to the Assumption Date, any Default or Event of
Default (as defined therein) under the C-TEC Credit Facility shall have
occurred and be continuing and on and after the Assumption Date, any Default
or Event of Default (as defined therein) under the CCSM Credit Facility shall
have occurred and be continuing.
(h) Change in Control. (i) Prior to the Assumption Date, any event of
default described in Section 10.1(h) of the C-TEC Credit Facility, which is
incorporated herein by reference as if set forth herein in its entirety and
(ii) as of and after the Assumption Date, any event of default described in
Section 11.1(h) of the CCSM Credit Facility which is incorporated herein by
reference as if set forth herein in its entirety.
(i) Voluntary Bankruptcy Proceeding. The Borrower or any of its
Designated Subsidiaries shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking
to take advantage of any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator of itself or of
a substantial part of its property, domestic or foreign, (v) admit in writing
its inability to pay its debts as they become due, (vi) make a general
assignment for the benefit of creditors, or (vii) take any corporate action
for the purpose of authorizing any of the foregoing.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against the Borrower or any of its Designated Subsidiaries
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 the Borrower or any of its
Designated Subsidiaries or for all or any substantial part of their respective
assets, domestic or foreign, and such case or proceeding shall continue
undismissed or unstayed for a period of sixty (60) consecutive days, or an
order granting the relief requested in such case or proceeding (including, but
not limited to, an order for relief under such federal bankruptcy laws) shall
be entered.
(k) Failure of Agreements. Any provision of this Agreement or of any
other Loan Document with respect to any material (in the reasonable judgement
thereof) rights and remedies of the Administrative Agent and Lenders hereunder
or thereunder shall for any reason cease to be valid and binding on the
Borrower or any of its Designated Subsidiaries party thereto or any such
Person shall so state in writing, or this Agreement or any other Security
Document shall for any reason cease to create a valid and perfected first
priority Lien on, or security interest in, any of the collateral purported to
be covered thereby, in each case other than in accordance with the express
terms hereof or thereof.
(l) 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, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 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
$1,000,000.
(m) 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 the Borrower or any of its Designated
Subsidiaries by any court and such judgment or order shall continue
undischarged or unstayed for a period of thirty (30) days.
SECTION 10.2 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 Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans and the Notes 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 and all other Obligations, 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 terminate the Credit Facility
and any right of the Borrower to request borrowings thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 10.1(i) or
(j), the Credit Facility shall be automatically terminated and all Obligations
shall automatically become due and payable.
(b) 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 Borrower's Obligations.
SECTION 10.3 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 Borrower, 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 XI
THE ADMINISTRATIVE AGENT
SECTION 11.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender
under this Agreement and the other Loan Documents 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.
SECTION 11.2 Delegation of Duties. The Administrative Agent may
execute any of its respective 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 11.3 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 the Borrower or
any of its Designated Subsidiaries 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 the Borrower or any of its Designated Subsidiaries 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 Borrower or any of its Designated Subsidiaries.
SECTION 11.4 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 and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section 12.10
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 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 Notes.
SECTION 11.5 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
Borrower 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 directions, 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.
SECTION 11.6 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 Borrower or any of its
Designated 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 Borrower and its Designated Subsidiaries
and made its own decision to make its Loans 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 Borrower and its Designated 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
Borrower or any of its Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Designated Subsidiaries or Affiliates.
SECTION 11.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower 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 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 Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
SECTION 11.8 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 Borrower as though the Administrative Agent were not an
Administrative Agent hereunder. With respect to any Loans made or renewed by
it and any Note issued to it and with respect to any 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.
SECTION 11.9 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 Borrower. 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. 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. 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 11.9 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.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 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 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 Borrower: C-TEC Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With copies 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.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on Schedule 1.1(a) 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 shall have been specified for such purpose by written
notice to the Borrower and Lenders, as the Administrative Agent's Office
referred to herein, to which payments due are to be made and at which Loans
will be disbursed.
SECTION 12.2 Expenses; Indemnity. The Borrower will (a) pay all
reasonable 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 and (b) at any time when a Default has occurred and is continuing (or at
any time thereafter with respect to any of the following undertaken during the
existence of a Default), pay all reasonable out-of-pocket expenses of the
Administrative Agent (and of the Lenders, but only if such Default is an Event
of Default) 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 (b) 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 losses, penalties, fines, liabilities,
settlements, damages, costs and expenses, suffered by any such Person 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 the Agreement, any other Loan Document or the Loans, including without
limitation reasonable attorney's and consultant's fees, 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 12.3 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 12.10 are hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower 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 the Lenders, or any such assignee or participant to or
for the credit or the account of the Borrower 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 10.2 and although such Obligations
shall be contingent or unmatured.
SECTION 12.4 Governing Law. This Agreement, the 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 12.5 Consent to Jurisdiction. The Borrower hereby
irrevocably consents 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 Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations. The Borrower
hereby irrevocably consents 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 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 12.1. Nothing in this Section
12.5 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 Borrower or its properties in the courts of any other
jurisdictions.
SECTION 12.6 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 Notes or any
other Loan Documents ("Disputes"), between or among parties to the 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. 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 $500,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. 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. Notwithstanding the foregoing,
this paragraph shall not apply to any Hedging Agreement that is a Loan
Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE 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 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 parties hereto and the other Loan
Documents 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.
SECTION 12.7 Reversal of Payments. To the extent the Borrower
makes a payment or payments to the Administrative Agent for the ratable
benefit of the Lenders or the Administrative Agent receives any payment or
proceeds of the collateral which payments or proceeds 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 or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by the
Administrative Agent.
SECTION 12.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees 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, Lenders and Borrower 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 12.9 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
the Borrower or any its Designated Subsidiaries 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 Borrower, be performed
in accordance with GAAP as in effect from time to time.
SECTION 12.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the
Lenders, all future holders of the Notes, and their respective successors and
assigns, except that the Borrower 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
Administrative Agent and the Borrower, which consents shall not be
unreasonably withheld (and which consent of the Borrower shall not be required
during the continuance of an Event of Default), 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 Loans at the
time owing to it and the 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 (other than to an Assignee who is then a Lender under this
Agreement, the C-TEC Credit Facility, the CCSM Credit Facility or the Cable
Systems Credit Facility);
(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 F attached
hereto (an "Assignment and Acceptance"), together with any Note or Notes
subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the
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 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 Loans 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
Borrower, 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
Borrower or Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit F:
(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
Borrower; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the
surrendered Note or Notes, a new Note or 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 Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes,
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to the
assigning Lender. Each surrendered Note or Notes shall be canceled and
returned to the Borrower.
(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
Loans and the Notes held by it); provided that:
(i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
(ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(iii) such Lender shall remain the holder of the Notes held
by it for all purposes of this Agreement;
(iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(v) 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
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, extend any scheduled payment date for principal of any Loan or,
except as expressly contemplated hereby or thereby, release substantially all
of the Collateral; and
(vi) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to
the Borrower obtained pursuant to the Loan Documents on a need-to-know basis
for making and administering the credit basis 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. Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this Section
12.10, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided, that prior to any such disclosure,
each such assignee, proposed assignee, participant or proposed participant
shall agree with the Borrower or such Lender to preserve the confidentiality
of any confidential information relating to the Borrower received from such
Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 12.11 Amendments, Waivers and Consents. (a) Except as set
forth below, any term, covenant, agreement or condition of this Agreement or
any of the other Loan Documents 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 Borrower;
provided, that no amendment, waiver or consent shall (i) increase the amount
or extend the time of the obligation of the Lenders to make Loans, (ii) extend
the originally scheduled time or times of payment of the principal of any Loan
or the time or times of payment of interest on any Loan, (iii) reduce the rate
of interest or fees payable on any Loan, (iv) permit any subordination of the
principal or interest on any Loan, (v) release any Security Document (other
than as specifically permitted in this Agreement or the applicable Security
Document), (vi) amend the provisions of this Section 12.11 or the definition
of Required Lenders (vii) amend the provisions of Section 4.4 providing that
all payments to the Lenders shall be pro rata in accordance with their
respective Commitment Percentages or (viii) amend the several nature of the
obligations of the Lenders under this Agreement, without the prior written
consent of each Lender. In addition, no amendment, waiver or consent to the
provisions of Article XII shall be made without the written consent of the
Administrative Agent.
(b) Each provision hereof which is incorporated by reference from the
C-TEC Credit Facility or CCSM Credit Facility shall be incorporated herein as
amended from time to time pursuant to the terms in each case thereof, without
the requirement of any separate consent hereunder.
SECTION 12.12 Performance of Duties. The Borrower's obligations
under this Agreement and each of the Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 12.13 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 12.14 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 XII
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 12.15 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 12.16 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 12.17 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 12.18 Term of Agreement. This Agreement shall remain in
effect from the Closing Date through and including the date upon which all
Obligations shall 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] C-TEC CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: EVP & CFO
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE 1.1(a): LENDERS AND COMMITMENTS
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE
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First Union National Bank $15,000,000.00
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇ 100%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇