1
EXHIBIT 10.4
EXECUTION
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 28, 2000
by and among
NET2000 COMMUNICATIONS GROUP, INC.,
as Borrower,
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent,
TD SECURITIES (USA) INC.,
as Lead Arranger and Book Manager,
ROYAL BANK OF CANADA,
as Syndication Agent,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
as Documentation Agent,
FIRST UNION SECURITIES, INC.
as Co-Documentation Agent,
and
THE LENDERS NAMED HEREIN
$200,000,000 SENIOR SECURED CREDIT FACILITY
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TABLE OF CONTENTS
Page
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ARTICLE 1 Definitions.........................................................2
Section 1.1 Definitions, etc...........................................2
Section 1.2 Other Definitional Provisions.............................31
Section 1.3 Accounting Terms and Determinations.......................31
ARTICLE 2 Loans..............................................................32
Section 2.1 Commitments...............................................32
Section 2.2 Issuance of Letters of Credit and Purchase of
Participations Therein....................................33
Section 2.3 Notes.....................................................37
Section 2.4 Scheduled Repayment of Loans/Commitment Reductions........38
Section 2.5 Interest..................................................39
Section 2.6 Borrowing Procedure.......................................41
Section 2.7 Optional Prepayments, Conversions and Continuations of
Loans.....................................................41
Section 2.8 Mandatory Prepayments.....................................42
Section 2.9 Minimum Amounts...........................................44
Section 2.10 Certain Notices...........................................44
Section 2.11 Use of Proceeds...........................................45
Section 2.12 Fees......................................................45
Section 2.13 Computations..............................................46
Section 2.14 Termination or Reduction of Commitments...................46
Section 2.15 Incremental Facility Commitments and Loans................47
ARTICLE 3 Payments...........................................................48
Section 3.1 Method of Payment.........................................48
Section 3.2 Pro Rata Treatment........................................49
Section 3.3 Sharing of Payments, Etc..................................49
Section 3.4 Non-Receipt of Funds by the Administrative Agent..........49
Section 3.5 Taxes.....................................................50
Section 3.6 Withholding Tax Exemption.................................51
Section 3.7 Reinstatement of Obligations..............................51
Section 3.8 No Force Majeure, Disputes................................52
ARTICLE 4 Yield Protection and Illegality....................................52
Section 4.1 Additional Costs..........................................52
Section 4.2 Limitation on Types of Loans..............................54
Section 4.3 Illegality................................................54
Section 4.4 Treatment of Affected Loans...............................55
Section 4.5 Compensation..............................................55
Section 4.6 Capital Adequacy..........................................56
Section 4.7 Additional Interest on Eurodollar Loans...................56
Section 4.8 Replacement of Lenders....................................57
ARTICLE 5 Security...........................................................57
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Section 5.1 Collateral................................................57
Section 5.2 Guaranties................................................58
Section 5.3 New Subsidiaries; Additional Capital Stock................58
Section 5.4 New Mortgaged Properties; Landlord Waivers................59
Section 5.5 Setoff....................................................59
ARTICLE 6 Conditions Precedent...............................................60
Section 6.1 Restatement Effective Date................................60
Section 6.2 All Extensions of Credit..................................64
Section 6.3 Closing Certificates......................................65
ARTICLE 7 Representations and Warranties.....................................66
Section 7.1 Existence.................................................66
Section 7.2 Financial Statements......................................66
Section 7.3 Corporate Action; No Breach...............................66
Section 7.4 Operation of Business.....................................67
Section 7.5 Intellectual Property.....................................67
Section 7.6 Litigation and Judgments..................................68
Section 7.7 Rights in Properties; Liens...............................68
Section 7.8 Enforceability............................................68
Section 7.9 Approvals.................................................68
Section 7.10 Debt......................................................69
Section 7.11 Taxes.....................................................69
Section 7.12 Margin Securities.........................................69
Section 7.13 ERISA.....................................................69
Section 7.14 Disclosure................................................70
Section 7.15 Subsidiaries..............................................70
Section 7.16 Compliance with Laws......,...............................70
Section 7.17 Investment Company Act....................................70
Section 7.18 Public Utility Holding Company Act........................70
Section 7.19 Environmental Matters.....................................71
Section 7.20 Labor Disputes and Acts of God............................72
Section 7.21 Material Contracts........................................72
Section 7.22 Bank Accounts.............................................72
Section 7.23 Outstanding Securities....................................72
Section 7.24 Solvency..................................................73
Section 7.25 Employee Matters..........................................73
Section 7.26 Insurance.................................................73
Section 7.27 Common Enterprise.........................................73
Section 7.28 No Material Adverse Change................................73
ARTICLE 8 Affirmative Covenants..............................................73
Section 8.1 Reporting Requirements....................................73
Section 8.2 Maintenance of Existence; Conduct of Business.............77
Section 8.3 Maintenance of Properties and Permits.....................77
Section 8.4 Taxes and Claims..........................................77
Section 8.5 Insurance.................................................77
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Section 8.6 Inspection Rights..........................................79
Section 8.7 Keeping Books and Records..................................79
Section 8.8 Compliance with Laws.......................................79
Section 8.9 Compliance with Agreements.................................80
Section 8.10 Further Assurances.........................................80
Section 8.11 ERISA......................................................80
Section 8.12 Interest Rate Protection...................................80
Section 8.13 Miscellaneous Business Covenants...........................80
Section 8.14 Trade Accounts Payable.....................................81
Section 8.15 Delivery of Certain Amendments and Material Contracts......81
ARTICLE 9 Negative Covenants..................................................81
Section 9.1 Debt.......................................................82
Section 9.2 Limitation on Liens........................................83
Section 9.3 Mergers, Etc...............................................83
Section 9.4 Restricted Payments........................................83
Section 9.5 Investments................................................84
Section 9.6 Limitation on Issuance of Capital Stock of the Borrower....85
Section 9.7 Transactions with Affiliates...............................85
Section 9.8 Disposition of Property....................................85
Section 9.9 Sale and Leaseback.........................................86
Section 9.10 Lines of Business..........................................86
Section 9.11 Environmental Protection...................................87
Section 9.12 Intercompany Transactions..................................87
Section 9.13 Management Fees............................................87
Section 9.14 Modification of Other Agreements...........................87
Section 9.15 ERISA......................................................88
Section 9.16 Financial Covenants........................................88
Section 9.17 No Prepayment of Debt......................................92
ARTICLE 10 Default............................................................93
Section 10.1 Events of Default..........................................93
Section 10.2 Remedies...................................................96
Section 10.3 Performance by the Administrative Agent, etc...............97
ARTICLE 11 The Agents.........................................................97
Section 11.1 Appointment, Powers and Immunities.........................97
Section 11.2 Rights of each Agent as a Lender...........................99
Section 11.3 Defaults...................................................99
Section 11.4 INDEMNIFICATION............................................99
Section 11.5 Independent Credit Decisions..............................100
Section 11.6 Several Commitments.......................................100
Section 11.7 Successor Administrative Agent............................101
Section 11.8 Security Documents and Guaranties.........................101
ARTICLE 12 Miscellaneous.....................................................102
Section 12.1 Expenses..................................................102
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Section 12.2 INDEMNIFICATION...........................................102
Section 12.3 Limitation of Liability...................................103
Section 12.4 No Duty...................................................104
Section 12.5 No Fiduciary Relationship.................................104
Section 12.6 Equitable Relief..........................................104
Section 12.7 No Waiver; Cumulative Remedies............................104
Section 12.8 Successors and Assigns....................................104
Section 12.9 Survival..................................................108
Section 12.10 ENTIRE AGREEMENT..........................................108
Section 12.11 Amendments................................................108
Section 12.12 Maximum Interest Rate.....................................109
Section 12.13 Notices...................................................110
Section 12.14 GOVERNING LAW; SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS........................................111
Section 12.15 Counterparts..............................................111
Section 12.16 Severability..............................................111
Section 12.17 Headings..................................................111
Section 12.18 Construction..............................................111
Section 12.19 Independence of Covenants.................................111
Section 12.20 Confidentiality...........................................112
Section 12.21 WAIVER OF JURY TRIAL......................................112
Section 12.22 Approvals and Consent.....................................112
Section 12.23 Service of Process........................................112
Section 12.24 Amendment and Restatement.................................113
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INDEX TO APPENDICES
Appendix
A-1 Term Loan Commitments
A-2 Revolving Credit Commitments
INDEX TO EXHIBITS
Exhibit Description
A - Form of Assignment and Acceptance
B-1 - Form of Term Loan Note
B-2 - Form of Revolving Loan Note
C-1 - Form of Notice of Borrowings, Conversions, Continuations and
Prepayments
C-2 - Form of Issuance Notice
D - Form of Compliance Certificate
E - Form of Guaranty Agreement
F - Form of Pledge and Security Agreement
INDEX TO SCHEDULES
Schedule Description
Schedule 1.1(a) - Certain Permitted Holders
Schedule 1.1(b) - Certain Permitted Liens
Schedule 6.1(w) - Required Additional Approvals
Schedule 7.4 - Permits, Franchises, Licenses and Authorizations
required by Governmental Requirements or issued by
Governmental Authorities
Schedule 7.5 - Intellectual Property
Schedule 7.6 - Litigation, Etc.
Schedule 7.7 - Real Property
Schedule 7.10 - Existing Debt
Schedule 7.13 - Plans
Schedule 7.15 - Subsidiaries and Capitalization
Schedule 7.21 - Material Contracts
Schedule 7.22 - Bank Accounts
Schedule 7.25 - Employee Matters
Schedule 7.26 - Insurance
Schedule 9.5 - Certain Investments
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 28,
2000, is by and among NET2000 COMMUNICATIONS GROUP, INC., a Delaware
corporation (the "Borrower"), each of the lending entities which is a party
hereto (as evidenced by the signature pages of this Agreement) or which may
from time to time become a party hereto as a lender, issuing bank or any
successor or assignee thereof (individually, a "Lender" and, collectively, the
"Lenders"), TORONTO DOMINION (TEXAS), INC. ("TD Texas"), as Administrative
Agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent"), TD SECURITIES (USA) INC. ("TDSI"), as
lead arranger (in such capacity, the "Lead Arranger") and book manager (in such
capacity, the "Book Manager"), ROYAL BANK OF CANADA ("RBC"), as syndication
agent (in such capacity, the "Syndication Agent"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Partners L.P. ("GSCP"), as documentation agent, First Union Securities, Inc.
("First Union Securities"), as co-documentation agent (GSCP and First Union
Securities, in their respective capacities as documentation agent and
co-documentation agent, the "Documentation Agents").
R E C I T A L S:
WHEREAS, the Borrower and Nortel Networks, as administrative agent and
lender, entered into that certain Amended and Restated Credit Agreement dated
as of July 30, 1999, as amended pursuant to that certain First Amendment to
Amended and Restated Credit Agreement dated as of December 23, 1999 (as
amended, supplemented or otherwise modified through the date hereof, the
"Existing Credit Agreement"), and the Administrative Agent, as successor to
Nortel Networks in its capacity as administrative agent thereunder, and certain
of the Lenders (the "Existing Lenders") are party to such Existing Credit
Agreement;
WHEREAS, the Borrower has requested that the Lenders amend and restate
the Existing Credit Agreement as more fully described herein; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Borrower, the Lenders and the Agents wish to amend and restate the Existing
Credit Agreement in its entirety as provided herein;
NOW, THEREFORE, subject to the satisfaction of the conditions set forth
in Section 6.1, the Borrower, the Lenders and the Agents hereby agree to amend
and restate the Existing Credit Agreement in its entirety to read as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions, etc. As used in this Agreement, the following
terms shall have the following meanings:
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"Access Lines" means, at any time, the total number of telephone line
equivalents, calculated on a 64 Kilobit per second per line basis, of business
end-users connected to the Network and for which the Borrower and its
Consolidated Subsidiaries are providing local access at such time.
"Acknowledgment Agreement" means the Acknowledgment, Consent and
Amendment, dated as of the Restatement Effective Date, by and among the
Borrower, NCH, NCC, NCS, NCRE, NCV and the Administrative Agent, and any and
all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of one percent) determined by the Administrative Agent to be
equal to (a) the Eurodollar Rate for such Eurodollar Loan for such Interest
Period divided by (b) one minus the Reserve Requirement for such Eurodollar
Loan for such Interest Period.
"Adjusted Net Income" means, as to any Person (the "subject Person") and
its Consolidated Subsidiaries and for any period, Consolidated Net Income less
the following (without duplication) to the extent that any of the following
shall have been included in Consolidated Net Income for such period: (a) any
net gain or loss arising from the sale of capital assets, (b) any net gain or
loss arising from any write-up or write-down of assets, (c) earnings or losses
of any other Person, substantially all of the assets of which have been
acquired by the subject Person or a Consolidated Subsidiary of the subject
Person in any manner, to the extent that such earnings or losses were realized
by such other Person prior to the date of such acquisition, (d) earnings or
losses of any Person (other than a Consolidated Subsidiary of the subject
Person) in which the subject Person or a Consolidated Subsidiary of the subject
Person has an ownership interest, unless such earnings have actually been
received by the subject Person or such Consolidated Subsidiary in the form of
cash distributions, and (e) any net gain or loss arising from the acquisition
of any securities of the subject Person or a Consolidated Subsidiary of the
subject Person.
"Administrative Agent" means as specified in the initial paragraph of
this Agreement.
"Administrative Agent's Letter" means that certain letter agreement dated
as of April 14, 2000, among TDSI, Toronto Dominion (Texas), Inc., and the
Borrower.
"Affected State" means as specified in Section 6.1(w).
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
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"Agent" means each of the Administrative Agent, Lead Arranger, Book
Manager, Syndication Agent and each Documentation Agent.
"Agreement" means this Agreement and any and all amendments,
modifications, supplements, renewals, extensions or restatements hereof.
"Annualized EBITDA" means, as to any Person and its Consolidated
Subsidiaries and for the applicable period, the product of (a) EBITDA for the
two most recently completed fiscal quarters, multiplied by (b) two.
"Applicable Commitment Fee Percentage" means a percentage, per annum,
determined by reference to the separate average usage of Revolving Loans and
Term Loans, as applicable, as set forth below:
================================================
APPLICABLE COMMITMENT FEE
AVERAGE USAGE PERCENTAGE
------------------------------------------------
< 33.33% 1.50%
------------------------------------------------
> 33.33% 1.00%
-
< 66.67%
------------------------------------------------
>66.67% 0.75%
-
================================================
For purposes of this definition, "average usage" shall be determined for the
relevant period (i) in the case of Revolving Loans, by dividing (x) the average
of the daily aggregate principal amount of outstanding Revolving Loans plus the
Letter of Credit Usage for such period, by (y) the average of the daily
Revolving Credit Commitments for such period, and (ii) in the case of Term
Loans, by dividing (x) the average of the daily aggregate principal amount of
outstanding Term Loans for such period, by (y) the average of the daily Term
Loan Commitments for such period.
"Applicable Lending Office" means for each Lender and each Type of Loan,
the lending office of such Lender (or an Affiliate of such Lender) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 12.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Borrower
and the Administrative Agent as the office by which its Loans of such Type are
to be made and maintained.
"Applicable Margin" means a percentage, per annum, determined by
reference to the Total Debt to Annualized EBITDA Ratio in effect from time to
time as set forth below:
=====================================================================
TOTAL DEBT TO APPLICABLE MARGIN
ANNUALIZED EBITDA APPLICABLE MARGIN FOR PRIME RATE
RATIO FOR EURODOLLAR LOANS LOANS
---------------------------------------------------------------------
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TOTAL DEBT TO APPLICABLE MARGIN
ANNUALIZED EBITDA APPLICABLE MARGIN FOR PRIME RATE
RATIO FOR EURODOLLAR LOANS LOANS
---------------------------------------------------------------------
> 10.00:1.00 or negative 4.25% 3.25%
-
---------------------------------------------------------------------
< 10.00:1.00 3.75% 2.75%
> 8.00:1.00
-
---------------------------------------------------------------------
< 8.00:1.00 3.50% 2.50%
> 6.00:1.00
-
---------------------------------------------------------------------
< 6.00.:1.00 3.25% 2.25%
> 4.00:1.00
-
---------------------------------------------------------------------
< 4.00:1.00 3.00% 2.00%
=====================================================================
Until such time as the Total Debt to Annualized EBITDA Ratio is less than
10.00:1.00, the Applicable Margin will be 4.25% per annum, with respect to
Eurodollar Loans, and 3.25% per annum, with respect to Prime Rate Loans. No
change in the Applicable Margin shall be effective until three Business Days
after the date on which the Administrative Agent shall have received the
applicable financial statements pursuant to Sections 8.1(a) and (b), as
applicable, and a Compliance Certificate pursuant to Section 8.1(c) calculating
the Total Debt to Annualized EBITDA Ratio. At any time the Borrower has not
submitted to the Administrative Agent the applicable information as and when
required under Section 8.1(c) and under Sections 8.1(a) and (b), as applicable,
the Applicable Margin shall be determined as if the Total Debt to Annualized
EBITDA Ratio were in excess of 10.00:1.00. Within one Business Day of receipt
of the applicable information as and when required under Section 8.1(c) and
under Sections 8.1(a) and (b), as applicable, the Administrative Agent shall
give each Lender telefacsimile or telephonic notice (confirmed in writing) of
the Applicable Margin in effect from such date.
"Asset Disposition" means the disposition of any or all of the Property
of the Borrower or any of its Restricted Subsidiaries or NCH, whether by sale,
lease, transfer, assignment, condemnation or otherwise, but excluding (a) sales
of inventory in the ordinary course of business, (b) the grant of a Lien as
security, (c) any involuntary disposition resulting from casualty damage to
Property, and (d) dispositions of equipment if and to the extent that the
equipment disposed of is, concurrently therewith, exchanged or replaced by
equipment of equal or greater value.
"Assignee" means as specified in Section 12.8(b).
"Assigning Lender" means as specified in Section 12.8(b).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Administrative Agent
pursuant to Section 12.8(e), in substantially the form of Exhibit A hereto.
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"Bankruptcy Code" means as specified in Section 10.1(e).
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"Board of Directors" means the board of directors of the Borrower.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Borrower to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification.
"Book Manager" means as specified in the initial paragraph of this
Agreement.
"Borrower" means as specified in the initial paragraph of this Agreement.
"Business Day" means (a) any day other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York or Houston, Texas, and (b) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods and notices in
connection with Eurodollar Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"Business Plan" means the Borrower's marketing and Network build-out
plans, budget and schedule, including financial projections (which, as of the
Restatement Effective Date, will include the Projections), for NCI and its
Consolidated Subsidiaries for the eight year period beginning on the
Restatement Effective Date, certified as being prepared generally in accordance
with GAAP (except for the absence of footnotes), such projections giving effect
to the Debt to be incurred under this Agreement as well as the other Debt to be
incurred by NCI, NCH, the Borrower and their respective Consolidated
Subsidiaries during such period.
"Capital Expenditures" means as to any Person and its Consolidated
Subsidiaries, amounts paid or Debt incurred by such Persons in connection with
the purchase or lease by any such Persons of Property that would be required to
be capitalized and shown on the statement of cash flows of such Persons in
accordance with GAAP.
"Capital Lease Obligations" means, as to any Person and its Consolidated
Subsidiaries, the obligations of such Persons to pay rent or other amounts
under a lease of (or other agreement conveying the right to use) real and/or
personal Property, which obligations are classified as a capital lease on a
balance sheet of such Persons under GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
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"Capital Stock" means corporate stock and any and all securities, shares,
partnership interests, limited partnership interests, limited liability company
interests, membership interests, equity interests, participations, rights or
other equivalents (however designated) of corporate stock or any of the
foregoing issued by any entity (whether a corporation, a partnership or another
entity) and includes, without limitation, securities convertible into Capital
Stock and rights or options to acquire Capital Stock.
"Change in Control" means the existence or occurrence of any of the
following: (a) any of the Capital Stock of the Borrower is owned by any Person
other than NCH or any of the Capital Stock of NCH is owned by any Person other
than NCI; (b) any Capital Stock of any Subsidiary of the Borrower is owned by
any Person other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower, (c) any Person or two or more Persons (other than the Permitted
Holders) acting as a group (as defined in Section 13d-3 of the Exchange Act)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Exchange Act) of 25% or more
of the outstanding shares of Voting Stock of NCI; or (d) individuals who, as of
the Restatement Effective Date, constitute the Board of Directors of NCI (the
"NCI Incumbent Board") cease for any reason to constitute at least a majority
of the Board of Directors of NCI; provided, however, that any individual
becoming a director of NCI subsequent to the Restatement Effective Date whose
election, or nomination for election by NCI's shareholders was approved by a
vote of at least a majority of the directors then comprising the NCI Incumbent
Board shall be considered as though such individual were a member of the NCI
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or contest by or on behalf of a Person other
than the Board of Directors of NCI.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any Person of any nature whatsoever
upon which a Lien is created or purported to be created by any Loan Document as
security for the Obligations or any portion thereof.
"Commitments" means the Term Loan Commitments, Revolving Loan Commitments
and any Incremental Facility Commitments.
"Commitment Percentage" means, as to any Lender and its Commitment, the
percentage equivalent of a fraction, the numerator of which is the amount of
the Term Loan Exposure and the Revolving Credit Exposure of such Lender and the
denominator of which is the aggregate amount of the Term Loan Exposure and the
Revolving Credit Exposure of all Lenders.
"Communications Act" means the Communications Act of 1934, and any
successor federal statute, and the rules and regulations of the FCC thereunder,
all as amended and as the same may be in effect from time to time.
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"Compliance Certificate" means a Compliance Certificate substantially in
the form of Exhibit D.
"Confidential Information Memorandum" means the Confidential Information
Memorandum dated April 2000, prepared in connection with the syndication of the
Commitments hereunder.
"Consolidated Interest Expense" means, as to any Person and its
Consolidated Subsidiaries and for any period, all interest on Debt of such
Person and its Consolidated Subsidiaries paid in cash during such period,
including the cash interest portion of payments under capital lease
obligations.
"Consolidated Net Income" means, as to any Person and its Consolidated
Subsidiaries and for any period, the net income (or loss) of such Person and
its Consolidated Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Subsidiary" means, with respect to any Person, any
Restricted Subsidiary the financial attributes of which are or would be
consolidated with those of such Person in the consolidated financial statements
of such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.7 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 12.12(a).
"Contributed Capital" means, as to any Person and its Consolidated
Subsidiaries and as of any date of determination, the sum of (without
duplication) net cash proceeds contributed as equity to such Persons as of such
date (including equity contributed on or before the Restatement Effective
Date).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.7 or Article 4 of one Type of Loan into the other Type of
Loan.
"Credit Extension" means the making of a Loan or the issuing of a Letter
of Credit.
"Current Date" means (a) a date occurring no more than 30 days prior to
the Restatement Effective Date or other relevant date as may be specified
herein (as applicable) or (b) such earlier date which is acceptable to the
Administrative Agent.
"Debt" means as to any Person at any time (without duplication): (a) all
indebtedness, liabilities and obligations of such Person for borrowed money,
(b) all indebtedness, liabilities and obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable of such Person arising
in the ordinary course of business that are not past due by more than 90 days,
(d) all Capital Lease Obligations of such Person, (e) all Debt of others
Guaranteed by such Person, (f) all indebtedness, liabilities and obligations
secured by a Lien existing on Property owned by such Person, whether or not the
indebtedness, liabilities
7
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or obligations secured thereby have been assumed by such Person or are
non-recourse to such Person, (g) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments, (h) all
indebtedness, liabilities and obligations of such Person to redeem or retire
shares of Capital Stock of such Person, (i) all indebtedness, liabilities and
obligations of such Person under Interest Rate Protection Agreements, and (j)
all indebtedness, liabilities and obligations of such Person in respect of
unfunded vested benefits under any pension plans.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan at all
times during which any Event of Default has occurred and is continuing or in
respect of any other amount payable by the Borrower under this Agreement or any
other Loan Document which is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period of such Event of
Default or during the period commencing on the due date of such other amount
until such other amount is paid in full, respectively, equal to the lesser of
(a) the sum of two percent (2.00%) plus the Prime Rate as in effect from time
to time plus the Applicable Margin for Prime Rate Loans or (b) the Maximum
Rate; provided, however, that if such amount in default is principal of a
Eurodollar Loan and the due date is a day other than the last day of an
Interest Period therefor, the "Default Rate" for such principal shall be, for
the period from and including the due date and to but excluding the last day of
the Interest Period therefor, the lesser of the rate per annum equal to (i) the
sum of two percent (2.00%) plus the interest rate for such Eurodollar Loan for
such Interest Period as provided in clause (ii) of Section 2.5(a) hereof or
(ii) the Maximum Rate and, thereafter, the rate provided for above in this
definition.
"Documentation Agents" means as specified in the initial paragraph of
this Agreement.
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, as to any Person and its Consolidated Subsidiaries and
for any period, without duplication, the sum of the following for such Person
and its Consolidated Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP: (a) Adjusted Net Income, plus (b) Consolidated
Interest Expense to the extent deducted in determining Adjusted Net Income,
plus (c) income and franchise taxes to the extent deducted in determining
Adjusted Net Income, plus (d) depreciation and amortization expense and other
non-cash (including, without limitation, any non-cash deferred compensation
expense arising out of the grant of stock options to employees), non-tax items
to the extent deducted in determining Adjusted Net Income, minus (e) non-cash
income (or losses) to the extent included in determining Adjusted Net Income.
"Eligible Assignee" means (a) any Affiliate of a Lender, (b) any
commercial bank, savings and loan association, savings bank, finance company,
insurance company, pension fund, mutual fund or other financial institution
(whether a corporation, partnership or other entity) which has been approved by
the Administrative Agent as a Lender under this Agreement or (c) any other
entity approved by the Administrative Agent which is (or which is managed by a
manager which manages funds which are) primarily engaged in making, purchasing
or otherwise investing in commercial
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15
loans or extending, or investing in extensions of, credit for its own account
in the ordinary course of its business; provided, however, that (i) Eligible
Assignee shall not include any Affiliate of the Borrower, (ii) Eligible
Assignee shall not include any business competitor of the Borrower or any other
Loan Party except after the occurrence and during the continuance of an Event
of Default, and (iii) during any time when any Commitment remains in effect,
each entity referred to in clauses (b) or (c) preceding must, in order to
constitute an Eligible Assignee of a portion of such outstanding Commitment,
have capital surplus and undivided profits aggregating at least $500,000,000 in
amount.
"Environmental Law" means any federal, state, provincial, local or
foreign law, statute, code or ordinance, principle of common law, rule or
regulation, as well as any Permit, order, decree, judgment or injunction
issued, promulgated, approved or entered thereunder, relating to pollution or
the protection, cleanup or restoration of the environment or natural resources,
or to the public health or safety, or otherwise governing the generation, use,
handling, collection, treatment, storage, transportation, recovery, recycling,
discharge or disposal of Hazardous Materials, including, without limitation as
to U.S. laws, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq., the Superfund Amendment
and Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource
Conservation and Recovery Act of 1976, 42 U. S. C. Section 6901 et seq., the
Occupational Safety and Health Act, 29 U S.C. Section 651 et seq., the Clean
Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33 U. S. C.
Section 1251 et seq., the Emergency Planning and Community Right to Know Act,
42 U. S. C. Section 11001 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 et seq., and the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal, penal or civil statute, including,
without limitation, any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon the
Eurodollar Rate or the Adjusted Eurodollar Rate.
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16
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars in the approximate amount
of the proposed Eurodollar Loan at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If such rate ceases to be available from
Telerate News Service, the Eurodollar Rate shall be determined by the
Administrative Agent in good faith from another financial reporting service,
which service shall be reasonably acceptable to the Borrower.
"Event of Default" has the meaning specified in Section 10.1.
"Excess Cash Flow" means, as to any Person and its Consolidated
Subsidiaries and for any fiscal year, and without duplication, the remainder of
(a) EBITDA for such fiscal year minus (b) the sum of (i) taxes payable in cash
for such fiscal year, plus (ii) all principal and cash interest payments on
Debt made during such fiscal year whether optional, mandatory or scheduled
payments (excluding repayments of Revolving Loans except to the extent the
Revolving Credit Commitments are permanently reduced in connection with such
repayments), plus (iii) Capital Expenditures (but only to the extent paid in
cash and not financed) made during such fiscal year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Existing Credit Agreement" means as specified in recitals to this
Agreement.
"Existing Guaranties" means (a) the Amended and Restated Guaranty
Agreement, dated as of July 30, 1999, by NCH to and in favor of the
Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent) for itself and the other Lenders, (b) the Amended and
Restated Guaranty Agreement, dated as of July 30, 1999, by NCC to and in favor
of the Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent) for itself and the other Lenders, (c) the Amended and
Restated Guaranty Agreement, dated as of July 30, 1999, by NCS to and in favor
of the Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent) for itself and the other Lenders, (d) the Amended and
Restated Guaranty Agreement, dated as of July 30, 1999, by NCRE to and in favor
of the Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent) for itself and the other Lenders, and (e) the Amended and
Restated Guaranty Agreement, dated as of July 30, 1999, by NCV to and in favor
of the Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent) for itself and the other Lenders, and any and all
amendments, modifications, supplements, renewals, extensions or restatements of
any of the foregoing.
"Existing Lenders" means as specified in the recitals to this Agreement.
"Existing Loans" means the "Loans" as such term is defined in the
Existing Credit Agreement.
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"Existing Security Agreements" means (a) the Amended and Restated Pledge
and Security Agreement, dated as of July 30, 1999, by and between the Borrower
and the Administrative Agent (as successor to Nortel Networks in its capacity
as administrative agent), (b) the Amended and Restated Pledge and Security
Agreement, dated as of July 30, 1999, by and between NCH and the Administrative
Agent (as successor to Nortel Networks in its capacity as administrative
agent), (c) the Amended and Restated Pledge and Security Agreement, dated as of
July 30, 1999, by and between NCC and the Administrative Agent (as successor to
Nortel Networks in its capacity as administrative agent), (d) the Amended and
Restated Pledge and Security Agreement, dated as of July 30, 1999, by and
between NCS and the Administrative Agent (as successor to Nortel Networks in
its capacity as administrative agent), (e) the Amended and Restated Pledge and
Security Agreement, dated as of July 30, 1999, by and between NCRE and the
Administrative Agent (as successor to Nortel Networks in its capacity as
administrative agent), and (f) the Amended and Restated Pledge and Security
Agreement, dated as of July 30, 1999, by and between NCV and the Administrative
Agent (as successor to Nortel Networks in its capacity as administrative
agent), and any and all amendments, modifications, supplements, renewals,
extensions or restatements of any of the foregoing.
"FCC" means the Federal Communications Commission and any successor
agency.
"FCC Licenses" means all Licenses issued by the FCC.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of
1%)) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if
such rate is not so published on such next succeeding Business Day, the Federal
Funds Rate for any day shall be the average rate which would be charged to the
Reference Bank on such day on such transactions as determined by the
Administrative Agent.
"First Union Securities" means as specified in the initial paragraph of
this Agreement.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Acts" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority.
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"Governmental Authority" means any nation or government, any state,
provincial or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, license, authorization or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Gross Revenues" means, as to any Person and its Consolidated
Subsidiaries and for any period, gross revenues of such Person and its
Consolidated Subsidiaries determined on a consolidated basis in accordance with
GAAP for such period.
"Gross Up Lender" means as specified in Section 4.8.
"GSCP" means as specified in the initial paragraph of this Agreement.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
indebtedness, liability or obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other indebtedness,
liability or obligation as to the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"Guaranties" means, the Existing Guaranties, the NII Guaranty, the NCO
Guaranty and any additional Guaranty, and any and all amendments,
modifications, supplements, renewals, extensions or restatements of any of the
foregoing.
"Guarantors" means each of NCH, NII, NCO, NCC, NCS, NCRE, NCV, each other
Restricted Subsidiary of NCH or the Borrower at any time existing and each
other Person which has executed a Guaranty, and "Guarantor" means any of such
Persons.
"Guaranty" means a guaranty agreement guaranteeing payment and
performance of the Obligations, substantially in the form of Exhibit E hereto
or otherwise in form and substance satisfactory to the Administrative Agent,
executed by a Guarantor in favor of the Administrative
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Agent and the Lenders, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"Hazardous Material" means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is,
or is deemed to be, alone or in any combination, hazardous, hazardous waste,
toxic, a pollutant, a deleterious substance, a contaminant or a source of
pollution or contamination under any Environmental Law, including, without
limitation, asbestos, petroleum, underground storage tanks (whether empty or
containing any substance) and polychlorinated biphenyls.
"ILEC" means an incumbent local exchange carrier.
"Incremental Facility Commitments" means as specified in Section 2.15(a).
"Incremental Facility Effective Date" means as specified in Section
2.15(b).
"Incremental Facility Loan" means a loan made by an Incremental Facility
Lender to the Borrower under an Incremental Facility Commitment.
"Incremental Facility Lender" means as specified in Section 2.15(a).
"Incremental Facility Maximum Amount" means $75,000,000.
"Insurance Recovery" means, with respect to any Property of any Loan
Party and any single occurrence or related occurrences with respect thereto,
the receipt or constructive receipt by such Loan Party, or the payment by an
insurance company to the Administrative Agent, of proceeds of any such Property
or casualty insurance.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark
and service ▇▇▇▇ registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, licenses,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and
similar technical information, engineering know-how, customer and supplier
information, assembly and test data drawings or royalty rights.
"Interest Coverage Ratio" means the ratio as of the last day of any
fiscal quarter of (i) EBITDA for the Borrower and its Consolidated Subsidiaries
for the two most recently completed fiscal quarters then ended to (ii) the sum
of (a) Consolidated Interest Expense, plus (b) Permitted Subordinated Debt
Interest Distributions (other than any such distributions funded from the
escrow account referred to in Section 9.4(a)), in each case for the Borrower
and its Consolidated Subsidiaries for the two most recently completed fiscal
quarters then ended.
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"Interest Period" means, with respect to any Eurodollar Loan, each period
commencing on the date such Loan is made or Converted from a Prime Rate Loan or
(if Continued) the last day of the next preceding Interest Period with respect
to such Loan, and ending on the numerically corresponding day in the first,
second, third or sixth (or, if available, ninth or twelfth) calendar month
thereafter, as the Borrower may select as provided in Section 2.10 hereof,
except that each such Interest Period which commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on
the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (b) any Interest Period
with respect to any portion of the Term Loans which would otherwise extend
beyond the Term Loan Maturity Date shall end on the Term Loan Maturity Date;
(c) any Interest Period with respect to any portion of the Revolving Loans
which would otherwise extend beyond the Revolving Credit Commitment Termination
Date shall end on the Revolving Credit Commitment Termination Date; (d) no more
than seven (7) Interest Periods for Eurodollar Loans shall be in effect at the
same time; (e) no Interest Period shall have a duration of less than one month
and, if the Interest Period for any Eurodollar Loans would otherwise be a
shorter period, such Loans shall not be available hereunder; (f) no Interest
Period with respect to any portion of Term Loans shall extend beyond a date on
a which the Borrower is required to make a scheduled payment of principal of
Term Loans, unless the sum of (1) the aggregate principal amount of Term Loans
that are Prime Rate Loans, and (2) the aggregate principal amount of Term Loans
that are Eurodollar Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on the Term Loans on
such date; and (g) no Interest Period with respect to any portion of Revolving
Loans shall extend beyond a date on which the Borrower is required to make a
scheduled reduction of Revolving Credit Commitments, unless the sum of (1) the
aggregate principal amount of such Revolving Loans that are Prime Rate Loans,
and (2) the aggregate principal amount of Revolving Loans that are Eurodollar
Loans with Interest Periods expiring on or before such date or reduction equals
or exceeds the amount required to be paid with respect to the Revolving Credit
Commitments on such date.
"Interest Rate Protection Agreements" means, with respect to the
Borrower, an interest rate swap, cap or collar agreement or similar arrangement
between the Borrower and one or more Lenders providing for the transfer or
mitigation of interest rate risks either generally or under specified
contingencies.
"Investments" means as specified in Section 9.5.
"Issuance Notice" means an Issuance Notice substantially in the form of
Exhibit C-2.
"Issuing Bank" means The Toronto Dominion Bank as issuing bank hereunder,
together with its permitted successors and assigns in such capacity.
"Lead Arranger" means as specified in the initial paragraph of this
Agreement.
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"Lender" and "Lenders" means as specified in the initial paragraph of
this Agreement.
"Lender Counterparty" and "Lender Counterparties" means each Lender or
any Affiliate thereof counterparty to an Interest Rate Protection Agreement.
"Letter of Credit" means a commercial or standby letter of credit issued
or to be issued by the Issuing Bank pursuant to this Agreement.
"Letter of Credit Sublimit" means the lesser of (i) $25,000,000 and (ii)
the aggregate unused amount of the Revolving Credit Commitments then in effect.
"Letter of Credit Usage" means, as at any date of determination, the sum
of (i) the maximum aggregate amount which is, or at any time thereafter may
become, available for drawing under all Letters of Credit then outstanding, and
(ii) the aggregate amount of all drawings under Letters of Credit honored by
the Issuing Bank and not theretofore reimbursed by or on behalf of the
Borrower.
"License" means any permit, certificate, approval, order, license or
other authorization, including, without limitation, any FCC License.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, tax lien, financing statement, pledge, charge, hypothecation or other
lien, charge, easement (other than any easement not materially impairing
usefulness), encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property (including, without limitation, any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Loan Documents" means this Agreement, the Notes, if any, the Guaranties,
the Security Documents, any documents or certificates executed by the Borrower
in favor of the Issuing Bank relating to Letters of Credit, the Administrative
Agent's Letter, the Supplemental Agreement, the "Loan Document," as such term
is defined in the Original Credit Agreement (unless such Loan Documents have
been amended and restated pursuant to the Existing Credit Agreement or pursuant
to other Loan Documents), the "Loan Documents" as such term is defined in the
Existing Credit Agreement (unless such Loan Documents have been amended and
restated pursuant hereto or pursuant to other Loan Documents) and all other
agreements, documents, instruments and certificates now or hereafter executed
and/or delivered pursuant to or in connection with any of the foregoing, and
any and all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Loan Party" means NCI, the Borrower, any Guarantor or any Person who
grants a Lien on any Property to secure the payment or performance of the
Obligations or any portion thereof, and "Loan Parties" means all of such
Persons.
"Loan" means a Term Loan or a Revolving Loan.
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"Master Purchase Agreement" means that certain Master Purchase Agreement,
dated as of November 2, 1998, by and among the Borrower and Nortel Networks, as
amended, supplemented or restated from time to time.
"Material Adverse Effect" means any event, development or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, financial condition, results of operations or
prospects of NCI and its Restricted Subsidiaries taken as a whole, (b) the
business, assets, financial condition, results of operations or prospects of
the Borrower individually or of the Borrower and its Restricted Subsidiaries
taken as a whole, (c) the validity or enforceability of any of the Loan
Documents or the rights and remedies of the Administrative Agent, any other
Agent and/or any Lender thereunder, (d) the ability of any Loan Party to pay
and perform its indebtedness, liabilities and/or obligations under any of the
Loan Documents, or (e) the value of Collateral available to the Administrative
Agent and the Lenders after giving effect to Liens in favor of other Persons.
"Material Contracts" means the Master Purchase Agreement and, as to any
Loan Party, any supply, purchase, service, employment, tax, indemnity,
shareholder or other agreement or contract for which the aggregate amount or
value of services performed or to be performed for or by, or funds or other
Property transferred or to be transferred to or by, any Loan Party to such
agreement or contract, or by which any Loan Party or any of its Properties is
otherwise bound, during any fiscal year of the Borrower exceeds $2,000,000 (or
the equivalent amount in any currency) and any and all amendments,
modifications, supplements, renewals or restatements thereof.
"Maximum Rate" means, with respect to any Lender, the maximum
non-usurious interest rate or an amount computed in reference to such rate (as
applicable), if any, that any time or from time to time may be contracted for,
taken, reserved, charged or received with respect to the particular Obligations
as to which such rate is to be determined, payable to such Lender pursuant to
this Agreement or any other Loan Document, under laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow. The Maximum
Rate shall be calculated in a manner that takes into account any and all fees,
payments and other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate.
"Mortgage" means a mortgage, deed of trust or other appropriate
agreement, document or instrument evidencing or creating a Lien on real
Property (and any related personal Property) as security for the Obligations or
any portion thereof in form and substance satisfactory to the Administrative
Agent executed by any Loan Party in favor of the Administrative Agent for the
benefit of the Agents, the Lenders and the Lender Counterparties, and any and
all amendments, modifications, supplements, renewals, extensions or
restatements thereof.
"Mortgaged Properties" means Properties in which a Lien has been granted
or purported to be granted pursuant to a Mortgage.
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"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from the Borrower or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"NCC" means Net2000 Communications Capital Equipment, Inc., a Delaware
corporation.
"NCH" means Net2000 Communications Holdings, Inc., a Delaware
corporation.
"NCI" means Net2000 Communications, Inc., a Delaware corporation.
"NCRE" means Net2000 Communications Real Estate, Inc., a Delaware
corporation and successor by merger to Net2000 Communications Real Estate, LLC.
"NCS" means Net2000 Communications Services, Inc., a Delaware
corporation.
"NCV" means Net2000 Communications of Virginia, LLC, a Virginia limited
liability company.
"NII" means Net2000 Investments, Inc., a Delaware corporation.
"NII Guaranty" means the Guaranty Agreement, dated as of the Restatement
Effective Date, executed and delivered by NII to and in favor of the
Administrative Agent for itself and the other Lenders, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"NII Security Agreement" means the Pledge and Security Agreement, dated
as of the Restatement Effective Date, by and between NII and the Administrative
Agent, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
gross amount of cash received by the Borrower or any of its Restricted
Subsidiaries from such Asset Disposition, minus (b) the amount, if any, of all
taxes paid or payable by the Borrower or any of its Restricted Subsidiaries
directly resulting from such Asset Disposition (including the amount, if any,
estimated by the Borrower in good faith at the time of such Asset Disposition
for taxes payable by the Borrower or any of its Restricted Subsidiaries on or
measured by net income or gain resulting from such Asset Disposition), minus
(c) the reasonable out-of-pocket costs and expenses incurred by the Borrower or
such Restricted Subsidiary in connection with such Asset Disposition (including
reasonable brokerage fees paid to a Person other than an Affiliate of the
Borrower) excluding any fees or expenses paid to an Affiliate of the Borrower,
minus (d) amounts applied to the repayment of indebtedness (other than the
Obligations) secured by any Permitted Lien (if any) on the Property subject to
the Asset Disposition. "Net Proceeds" with respect to any Asset Disposition
shall also include proceeds (after deducting any amounts specified in clauses
(b), (c) and (d) of the preceding sentence) of insurance with respect to any
actual or constructive loss of Property, an agreed or compromised loss of
Property or the taking of any Property under the power of eminent domain and
condemnation awards and awards in lieu of condemnation for the taking of
Property under the power of eminent domain.
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"Network" means the Borrower's network for the provision of integrated
communications services, including long distance telephone service, local
telephone service, internet service and other data or voice services to be
constructed and operated in the U.S. as described in the Business Plan as
updated as referred to in Section 8.1(j).
"NCO" means Net2000 Communications Operations, Inc., a Delaware
corporation.
"NCO Guaranty" means the Guaranty Agreement, dated as of the Restatement
Effective Date, executed and delivered by NCO to and in favor of the
Administrative Agent for itself and the other Lenders, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"NCO Security Agreement" means the Pledge and Security Agreement, dated
as of the Restatement Effective Date, by and between NCO and the Administrative
Agent, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof.
"Nortel Networks" means Nortel Networks Inc., a Delaware corporation.
"Note" means a Term Loan Note or a Revolving Loan Note.
"Notice of Borrowing" means as specified in Section 2.10.
"Obligations" means any and all (a) indebtedness, liabilities and
obligations of the Borrower or any other Loan Party to the Agents and the
Lenders or their Affiliates, or any of them (including, without limitation, all
former Agents or Lenders (other than Nortel Networks)), evidenced by and/or
arising pursuant to any of the Loan Documents (including, without limitation,
this Agreement and the Notes), now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several, including, without
limitation, (i) the obligations of the Borrower or any other Loan Party to
repay the Loans, to pay interest on the Loans (including, without limitation,
interest accruing after any, if any, bankruptcy, insolvency, reorganization or
other similar filing) and to pay all fees, indemnities, costs and expenses
(including attorneys' fees) provided for in the Loan Documents and (ii) the
indebtedness constituting the Loans and such interest, fees, indemnities, costs
and expenses, and (b) indebtedness, liabilities and obligations of the Borrower
or any other Loan Party under any and all Interest Rate Protection Agreements
that it may enter into with any Lender or its Affiliate with the prior written
consent of the Administrative Agent.
"Original Credit Agreement" means that certain Credit Agreement dated as
of November 2, 1998, between the Borrower and Nortel Networks, as
administrative agent and lender.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
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"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Restatement Effective Date
or, in the case of a Multiemployer Plan, at any time since September 2, 1974,
by any Loan Party or any ERISA Affiliate for employees of any Loan Party or any
ERISA Affiliate.
"Permit" means any permit, certificate, approval, order, License,
right-of-way (whether an easement, contract or agreement in any form) or other
authorization.
"Permitted Holders" means (a) the Persons who are shareholders of NCI as
of the Restatement Effective Date, which shareholders are identified on
Schedule 1.1(a) hereto and (b) any spouse, parent, sibling, child or grandchild
of any of the aforesaid individuals (in each case, whether such relationship
arises from birth or adoption or through marriage) or any trust established for
the benefit of any such individuals or any spouse, parent, sibling, child or
grandchild of any such individuals (in each case whether such relationship
arises from birth, adoption or through marriage).
"Permitted Liens" mean:
(a) Liens disclosed on Schedule 1.1(b) hereto;
(b) Liens securing the Obligations in favor of the Administrative
Agent (for the benefit of the Agents, the Lenders and the Lender
Counterparties) pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, rights-of-way, zoning
restrictions or other restrictions on the use of real Property or
imperfections to title that do not (individually or in the aggregate)
materially affect the value of the Property encumbered thereby or
materially impair the ability of the Borrower or any of its Restricted
Subsidiaries to use such Property in its businesses, and none of which is
violated in any material respect by existing or proposed structures or
land use;
(d) Liens for taxes, assessments or other governmental charges
that are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the Property subject to such Liens, and for
which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords or other similar statutory Liens securing obligations that are
not yet due and are incurred in the ordinary course of business or which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
Property subject to such Liens, and for which adequate reserves have been
established;
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(f) Liens resulting from good faith deposits to secure payment of
worker's compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, contracts (other than for payment of Debt) or leases, all in the
ordinary course of business;
(g) Purchase-money Liens on any Property acquired after the
Restatement Effective Date or the assumption after the Restatement
Effective Date of any Lien on Property existing at the time of such
acquisition (and not created in contemplation of such acquisition), or a
Lien incurred after the Restatement Effective Date in connection with any
conditional sale or other title retention agreement or Capital Lease
Obligation; provided that:
(i) any Property subject to the foregoing is acquired by
the Borrower or any of its Restricted Subsidiaries in the ordinary
course of its respective business and the Lien on the Property
attaches concurrently or within 90 days after the acquisition
thereof;
(ii) the Debt secured by any Lien so created, assumed or
existing shall not exceed the lesser of the cost or fair market
value at the time of acquisition of the Property covered thereby
(inclusive of the cost of engineering, furnishing and installation
services directly relating to such Property) and shall not be less
than 75% of the amortized value of the Property acquired with the
proceeds of such Debt;
(iii) each such Lien shall attach only to the Property so
acquired and the proceeds thereof; and
(iv) the Debt secured by all such Liens, when aggregated
with the Debt secured by all purchase-money Liens and all Liens in
connection with any conditional sale or other title retention
agreement or Capital Lease Obligation existing as of the
Restatement Effective Date or at any other time, shall not exceed
$40,000,000 at any time outstanding in the aggregate;
(h) Any extension, renewal or replacement of any of the
foregoing, provided that Liens permitted hereunder shall not be extended
or spread to cover any additional indebtedness or Property; and
(i) Liens on the cash and cash equivalents deposited in an escrow
account in accordance with Section 9.4 from the proceeds of the
Subordinated Debt incurred pursuant to Section 9.1(b) to pay interest in
respect of such Subordinated Debt;
provided, however, that (A) none of the Permitted Liens (except those in favor
of the Administrative Agent) may attach or relate to the Capital Stock of or
any other ownership interest in the Borrower or any of its Subsidiaries and (B)
except for the Liens disclosed on Schedule 1.1(b) which are expressly
identified as constituting purchase money Liens, none of the Permitted Liens
referred to in clause (a) preceding may have a priority equal or prior to the
Liens in favor of the Administrative Agent as security for the Obligations.
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"Permitted Subordinated Debt Interest Distributions" means, as of any
date of determination, the permitted Restricted Payments made by the Borrower
to NCH under Section 9.4(a).
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, joint stock company,
Governmental Authority or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
"Prime Rate" means, at any time, the greater of (a) the rate of interest
per annum then most recently announced or established by the Reference Bank at
its principal office in New York City as its highest commercial prime or base
rate then in effect, or (b) the Federal Funds Rate then in effect plus one-half
of one percent ( 1/2%). The Prime Rate may not necessarily be the lowest rate
of interest charged by the Reference Bank to its commercial borrowers. Each
change in any interest rate provided for herein based upon the Prime Rate or
the Federal Funds Rate resulting from a change in the Prime Rate or the Federal
Funds Rate, respectively, shall take effect without notice to the Borrower at
the time of such change in the Prime Rate or the Federal Funds Rate,
respectively.
"Prime Rate Loans" means Loans that bear interest at rates based upon the
Prime Rate.
"Principal Office" means the principal office for each of the
Administrative Agent and the Issuing Bank in Houston, Texas, presently located
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or such other office as any such
Person may from time to time designate in writing to the Borrower, the
Administrative Agent and each Lender.
"Pro Forma Consolidated Debt Service" means, as of any date of
determination, the sum, without duplication, of (a) Consolidated Interest
Expense, plus (b) Permitted Subordinated Debt Interest Distributions, plus (c)
all scheduled amortization in respect of Debt, in each case payable by the
Borrower and its Consolidated Subsidiaries during the immediately succeeding
four fiscal quarters.
"Pro Forma Debt Service Coverage Ratio" means the ratio as of the last
day of any fiscal quarter of (i) Annualized EBITDA for the Borrower and its
Consolidated Subsidiaries for any period then ended to (ii) the Pro Forma
Consolidated Debt Service for the immediately succeeding four-fiscal quarter
period.
"Pro Rata Share" means (i) with respect to all payments, computations and
other matters relating to the Term Loan of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term
Loan Exposure of all Lenders; and (ii) with respect to all payments,
computations and other matters relating to the Revolving Credit Commitment or
Revolving Loans of any Lender or any Letters of Credit issued or participations
purchased therein by any Lender, the percentage obtained by dividing (a) the
Revolving Credit Exposure of that Lender by (b) the aggregate Revolving Credit
Exposure of all Lenders. For all other purposes with respect to each Lender,
"Pro Rata Share" means the percentage obtained by dividing (A) an amount equal
to the sum of the Term Loan Exposure and the Revolving Credit
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Exposure of that Lender, by (B) an amount equal to the sum of the aggregate
Term Loan Exposure and the aggregate Revolving Credit Exposure of all Lenders.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Projections" means the consolidated financial projections (including
balance sheets, income statements and cash flow statements) for NCI, NCH and
the Borrower and their respective Consolidated Subsidiaries for a period of not
less than eight years from the Restatement Effective Date, which projections
are included in the Confidential Information Memorandum.
"Property" means property of all kinds, real, personal or mixed, tangible
or intangible (including, without limitation, all rights relating thereto),
whether owned or acquired on or after the Restatement Effective Date.
"Qualified Telecommunications Investment" means:
(i) to the extent made using Capital Stock of NCI in lieu of cash
paid or Debt assumed or incurred, investments in and acquisitions of
Telecommunications Assets or Telecommunications Businesses by the
Borrower and/or its Restricted Subsidiaries;
(ii) to the extent made with cash paid or Debt assumed or
incurred, investments in and acquisitions of Telecommunications Assets or
Telecommunications Businesses by the Borrower and/or its Restricted
Subsidiaries not to exceed $10,000,000 in aggregate amount since the
Restatement Effective Date;
(iii) to the extent made with cash paid or Debt assumed or
incurred, other investments made by the Borrower and/or its Restricted
Subsidiaries in Telecommunications Assets or Telecommunications
Businesses not to exceed $15,000,000 in aggregate amount since the
Restatement Effective Date; provided, that the ratio of Total Debt of NCI
and its Consolidated Subsidiaries to Annualized EBITDA of the Borrower
and its Consolidated Subsidiaries as of the end of the most recently
completed fiscal quarter, giving pro forma effect to the EBITDA gains and
losses and other financial attributes of the investment or associated
with the investment, would be less than 7.00:1.00; and
(iv) to the extent made with cash paid or Debt assumed or
incurred, other acquisitions of Telecommunications Assets or
Telecommunications Businesses by the Borrower and/or its Restricted
Subsidiaries not to exceed in aggregate amount since the Restatement
Effective Date the sum of (x) $25,000,000, plus (y) the positive
difference, if any, between (A) the amount of net cash proceeds from
common equity offerings received by NCI and contributed to the Borrower
as common equity since the Restatement Effective Date and (B) the amount
of such contributions to the Borrower's common equity since the
Restatement Effective Date which are used to increase the amount of
permitted Capital Expenditures in accordance with Sections 9.16(c);
provided, that the ratio of Total Debt of NCI and its Consolidated
Subsidiaries to Annualized EBITDA of the Borrower and its Consolidated
Subsidiaries as of the end of the most recently completed fiscal quarter,
giving pro forma effect to the EBITDA gains and losses and other
financial attributes of the acquired company or associated with the
acquired assets, would be less than 7.00:1.00;
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provided, further, that no acquisition or investment will qualify as a
Qualified Telecommunications Investment unless (I) the Loan Parties would have
been in compliance with the covenants contained in Section 9.16 as of the end
of the last two most recently completed fiscal quarters, giving pro forma
effect to the EBITDA gains and losses and other financial attributes of the
acquired company or investment or associated with the acquired assets or
investment, (II) the projections for the Loan Parties, giving effect to the
acquisition or investment, would be in compliance with the covenants contained
in Section 9.16 of this Agreement as of the end of the next two fiscal
quarters, and (III) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom.
"Quarterly Date" means the last day of each March, June, September and
December of each year, the first of which shall be June 30, 2000.
"RBC" means as specified in the initial paragraph of this Agreement.
"Receivables" means, as at any date of determination thereof, each and
every "account" as such term is defined in the UCC and includes, without
limitation, the unpaid portion of the obligation, as stated on the respective
invoice, or, if there is no invoice, other writing, of a customer of the
Borrower or any of its Restricted Subsidiaries in respect of services rendered
by the Borrower or any of its Restricted Subsidiaries.
"Reference Bank" means The Toronto Dominion Bank.
"Register" means as specified in Section 12.8(d).
"Registered Note" means as specified in Section 2.3(b).
"Registered Note Register" means as specified in Section 12.8(h).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Lender, any change after
the Restatement Effective Date in any U.S. federal or state or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of lenders
including such Lender of or under any U.S. federal or state or foreign laws or
regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.
"Reimbursement Date" means as specified in Section 2.2(d).
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, discharge, disposal, dispersement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
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"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform
post-remedial monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA other than any such event for which the 30-day notice requirement has
been waived in regulations issued by the PBGC.
"Required Additional Approvals" means as specified in Section 6.1(w).
"Required Lenders" means one or more Lenders having or holding Term Loan
Exposure and/or Revolving Credit Exposure representing at least 51% of the sum
of (i) the aggregate Term Loan Exposure of all Lenders and (ii) the aggregate
Revolving Credit Exposure of all Lenders.
"Required Payment" means as specified in Section 3.4.
"Resale Access Lines" means Access Lines that do not terminate on one of
the Borrower's or its Subsidiaries' switches.
"Reserve Requirement" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $1,000,000 against "Eurocurrency Liabilities" as such term is used in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
Lenders by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate
or the Adjusted Eurodollar Rate is to be determined or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Responsible Officer" means, as to any Loan Party, the chief executive
officer, the president, any vice president, the chief financial officer, the
chief operating officer or the treasurer of such Person.
"Restatement Effective Date" means as specified in Section 12.24.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of NCH or the Borrower or any of their
Restricted Subsidiaries now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any
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shares of any class of Capital Stock of NCH or the Borrower or any of their
Restricted Subsidiaries now or hereafter outstanding; (c) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, purchase, retirement or defeasance of, or payment with
respect to, any Subordinated Debt; (d) any loan, advance or payment to any
officer, director or shareholder of NCH or the Borrower or any of their
Restricted Subsidiaries (other than a shareholder consisting of NCH or the
Borrower or a Wholly-Owned Subsidiary of NCH or the Borrower), exclusive of
reasonable compensation paid to officers or directors paid in the ordinary
course of business; and (e) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of NCH or the Borrower or any of their
Restricted Subsidiaries now or hereafter outstanding.
"Restricted Subsidiaries" means each of the Subsidiaries of NCI, NCH or
the Borrower that are in existence on the Restatement Effective Date and any
future Subsidiaries of the Borrower, which in each case shall be signatories to
the Guaranties (other than the Borrower) and the Security Documents.
"Revenue Equivalent Lines" means Access Lines installed and generating
revenue for the Borrower or its Consolidated Subsidiaries.
"Revolving Credit Commitment" means the Revolving Credit Commitment of a
Lender to make or otherwise fund any Credit Extension (other than any Term
Loan) and "Revolving Credit Commitments" means such commitments of all Lenders
in the aggregate. The amount of each Lender's Revolving Credit Commitment, if
any, is set forth on Appendix A-2 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Revolving Loan Commitments as of the
Restatement Effective Date is $100,000,000.
"Revolving Credit Commitment Period" means the period from the
Restatement Effective Date to but excluding the Revolving Credit Commitment
Termination Date.
"Revolving Credit Commitment Termination Date" means the earliest to
occur of (i) the date the Revolving Credit Commitments are permanently reduced
to zero pursuant to Sections 2.4, 2.8 or 2.14 and (ii) the date of the
termination of the Revolving Credit Commitments pursuant to Section 10.2.
"Revolving Credit Exposure" means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Revolving Credit
Commitments, that Lender's Revolving Credit Commitment; and (ii) after the
termination of the Revolving Credit Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender, (b) in the
case of the Issuing Bank, the aggregate Letter of Credit Usage in respect of
all Letters of Credit issued by that Lender (net of any participations by
Lenders in such Letters of Credit), and (c) the aggregate amount of all
participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit.
"Revolving Loan" means a Loan made by a Lender to the Borrower pursuant
to Section 2.1(b).
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"Revolving Loan Note" means a promissory note substantially in the form
of Exhibit B-2 hereto, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof and all substitutions therefor
(including Revolving Loan promissory notes issued by the Borrower pursuant to
Section 12.8).
"Security Agreements" means the Existing Security Agreements, the
Acknowledgment Agreement, the NII Security Agreement, the NCO Security
Agreement and any and all security agreements, pledge agreements, securities
pledge agreements and other agreements, documents or instruments evidencing or
creating a Lien as security for the Obligations or any portion thereof
including, without limitation, a Pledge and Security Agreement substantially in
the form of Exhibit F hereto or otherwise in form and substance satisfactory to
the Administrative Agent, executed by any Loan Party, in favor of the
Administrative Agent for the benefit of the Agents, the Lenders and the Lender
Counterparties, and any such agreement, document or instrument subsequently
executed in accordance or connection with this Agreement or any other Loan
Document, and any and all amendments, modifications, supplements, renewals,
extensions or restatements thereof.
"Security Documents" means the Security Agreements and the Mortgages, as
they may be amended, modified, supplemented, renewed, extended or restated from
time to time, and any and all other agreements, deeds of trust, mortgages,
chattel mortgages, security agreements, pledges, guaranties, assignments of
proceeds, assignments of income, assignments of contract rights, assignments of
partnership interests, assignments of royalty interests, assignments of
performance or other collateral assignments, subordination agreements,
undertakings and other agreements, documents, instruments and financing
statements now or hereafter executed and/or delivered by any Person in
connection with or as security or assurance for the payment or performance of
the Obligations or any part thereof.
"Senior Debt" means, at any particular time, that portion of Total Debt
which is not Subordinated Debt.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
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"Subordinated Debt" means unsecured Debt of NCI or NCH the payment of
which is structurally or contractually subordinated to the payment of the Loans
on terms satisfactory to the Administrative Agent and the Required Lenders and
as to which the payment of principal of (and premium, if any) and interest and
other payment obligations in respect of such Debt shall be subordinate to the
prior payment in full of the Obligations to at least the following extent: (a)
no payments of principal of (or premium, if any) or interest on or otherwise
due in respect of such Debt may be permitted for so long as any Default in the
payment of principal (or premium, if any) or interest on the Obligations
exists; and (b) such Debt may not (i) provide for payments of principal of such
Debt at the stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance, retirement or
repurchase thereof (including any redemption, retirement or repurchase which is
contingent upon events of circumstances but excluding any retirement required
by virtue of acceleration of such Debt upon any event of default thereunder),
in each case prior to 6 months after the final stated maturity of the Loans or
(ii) permit redemption or other retirement (including pursuant to an offer to
purchase made by the obligor thereon) of such other Debt at the option of the
holder thereof prior to the final stated maturity of the Loans, other than a
redemption or other retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase made by NCI, NCH or any of their
respective Subsidiaries) which is conditioned upon a change of control of NCI
or NCH pursuant to provisions set forth in the instruments evidencing such
Debt.
"Subordinated Debt Documents" means any and all agreements, documents and
instruments now or hereafter evidencing or governing any Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors (or Persons performing similar functions)
of such corporation or entity (irrespective of whether or not at the time, in
the case of a corporation, 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) is at the time directly or indirectly owned or controlled by
such Person or one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries.
"Supplemental Agreement" means the Supplemental Agreement dated as of the
Restatement Effective Date, among NCI, the Loan Parties and the Administrative
Agent.
"Syndication Agent" means as specified in the initial paragraph of this
Agreement.
"TDSI" means as specified in the initial paragraph of this Agreement.
"TD Texas" means as specified in the initial paragraph of this Agreement.
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
"Telecommunications Business" means the business of (a) transmitting, or
providing services relating to the transmission of, voice, data, video and/or
internet systems and services through owned
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or leased transmission facilities, (b) owning, operating, constructing,
creating, developing, marketing or maintaining communications related network
equipment, software and other devices for use in a telecommunications or
information services business or (c) evaluating, participating or pursuing any
other business or activity that is primarily related to those businesses,
services or activities identified in clauses (a) or (b) above, provided that
the determination of what constitutes a Telecommunications Business shall be
made in good faith by the Board of Directors.
"Term Loan" means as defined in Section 2.1(a).
"Term Loan Commitment" means the Commitment of a Lender to make or
otherwise fund a Term Loan to the Borrower and "Term Loan Commitments" means
such commitments of all Lenders in the aggregate. The amount of each Lender's
Term Loan Commitment, if any, is set forth on Appendix A-1 or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Term Loan Commitments
as of the Restatement Effective Date is $100,000,000.
"Term Loan Commitment Termination Date" means December __, 2000.
"Term Loan Commitment Period" means the period from the Restatement
Effective Date to but excluding the Term Loan Commitment Termination Date.
"Term Loan Exposure" means, with respect to any Lender, as of any date of
determination, (i) prior to the Term Loan Commitment Termination Date, such
Lender's Term Loan Commitment; and (ii) after the Term Loan Commitment
Termination Date, the outstanding principal amount of the Term Loans of such
Lender.
"Term Loan Maturity Date" means the date that all Term Loans shall become
due and payable in full hereunder, whether by acceleration or otherwise.
"Term Loan Note" means a promissory note substantially in the form of
Exhibit B-1 hereto and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof and all substitutions therefor
(including Term Loan promissory notes issued by the Borrower pursuant to
Section 12.8).
"Total Capitalization" means, as to any Person and its Consolidated
Subsidiaries and as of any date, the sum of (without duplication) (a) the Total
Debt of such Person and its Consolidated Subsidiaries as of such date plus (b)
the Contributed Capital of such Person and its Consolidated Subsidiaries as of
such date, determined on a consolidated basis in accordance with GAAP.
"Total Debt" means, as to any Person and its Consolidated Subsidiaries
and as of any date, the aggregate principal amount of all Debt of such Person
and its Consolidated Subsidiaries outstanding.
"Total Debt to Annualized EBITDA Ratio" means, as at any date of
determination, the ratio of Total Debt to Annualized EBITDA calculated pursuant
to Section 9.16(b)(i).
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"Total Utilization of Revolving Credit Commitments" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
reimbursing the Issuing Bank for any amount drawn under any Letter of Credit,
but not yet so applied) and (ii) the Letter of Credit Usage.
"Type" means any type of Loan (i.e., a Prime Rate Loan or Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of New
York and/or any other jurisdiction, the laws of which may be applicable to or
in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"U.S." means the United States of America.
"U.S. Person" means a citizen or resident of the U.S., a corporation,
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. Taxes" means any present or future tax, assessment or other charge
or levy imposed by or on behalf of the U.S. or any taxing authority thereof.
"Virtual Co-location" means as defined in 47 C.F.R. Section 64.1401(e).
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only for
so long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, a Restricted
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein" and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. The term "continuing",
"continuation" or "continuance" means, in reference to any Default or Event of
Default that has occurred, that such Default or Event of Default has not been
either cured to the reasonable satisfaction of the Administrative Agent within
the applicable grace period (if any) specified in this Agreement or the other
Loan Documents (as applicable) or waived in writing by the requisite Lenders in
accordance with Section 12.11. Unless otherwise specified, all Article and
Section references pertain to this Agreement. Terms used herein that are
defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC. All references in this Agreement to any agreement shall
be deemed to mean and refer to such agreement as it may be amended, modified or
supplemented from time to time if (but only if) such amendment, modification or
supplement has been approved by the Administrative Agent and the Required
Lenders, is expressly referred to in such reference or is otherwise expressly
permitted by the terms of this Agreement.
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Section 1.3 Accounting Terms and Determinations.
(1) Except as may be expressly provided herein to the contrary, (i) all
accounting terms (whether or not specifically defined herein) shall be
construed in accordance with GAAP (subject to year end adjustments, if
applicable) consistent with such accounting principles applied in the
preparation of the audited financial statements referred to in Section 7.2(a),
(ii) all financial statements and reports required to be delivered pursuant to
this Agreement and the other Loan Documents and all financial information
delivered to the Administrative Agent pursuant to Section 8.1 shall be prepared
in accordance with GAAP (subject to year end adjustments, if applicable)
applied on a basis consistent with such accounting principles applied in the
preparation of the audited financial statements of the applicable Person
referred to in Section 7.2 or in accordance with Section 8.7, (iii) all
financial covenants contained in this Agreement shall be determined in
accordance with GAAP (except as may be expressly provided to the contrary
herein), and (iv) with respect to accounting terms or financial information
defined or described in reference to a Person and its Consolidated
Subsidiaries, all such terms and information shall be construed as applying to
such Person and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP. If and to the extent that financial statements, reports
or covenants are to be prepared or determined on a consolidated basis, they
shall be prepared or determined on a consolidated basis for NCI and its
Restricted Subsidiaries (including, without limitation, NCH and the Borrower),
NCH and its Restricted Subsidiaries (including, without limitation, the
Borrower) and the Borrower and its Restricted Subsidiaries, as the case may be
(except as may be expressly provided to the contrary herein).
(2) The Borrower shall deliver to the Administrative Agent and the
Lenders, at the same time as the delivery of any annual or quarterly financial
statement under Section 8.1, (i) a description, in reasonable detail, of any
material variation between the application of GAAP employed in the preparation
of the next preceding annual or quarterly financial statements prepared in
accordance with the last sentence of Section 1.3(a) preceding as to which no
objection has been made by the Administrative Agent and (ii) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
(3) To enable the ready and consistent determination of compliance with
the covenants set forth in this Agreement, the Borrower will not change the
last day of its fiscal year from December 31 or the last days of the first
three fiscal quarters of the Borrower in each of its fiscal years from March
31, June 30 and September 30, respectively.
(4) Unless otherwise expressly provided herein to the contrary, all
references herein to the Restatement Effective Date shall be deemed to mean and
refer to the Restatement Effective Date after giving effect to all transactions
which occur on or before such date.
ARTICLE 2
Loans
Section 1.4 Commitments.
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(1) Term Loans. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 2.14(a)), each Lender severally agrees
to make one or more loans in Dollars to the Borrower from time to time from and
including the Restatement Effective Date to but excluding the Term Loan
Commitment Termination Date up to but not exceeding the amount of such Lender's
Term Loan Commitment as then in effect; provided, that after giving effect to
the making of any Term Loans in no event shall the aggregate principal amount
of Term Loans made through such date exceed the Term Loan Commitments then in
effect. (Such loans referred to in this Section 2.1(a) now or hereafter made by
the Lenders to the Borrower, including, without limitation, such loans which
remain outstanding after the Term Loan Commitment Termination Date, are
hereinafter collectively called the "Term Loans".) Notwithstanding the
foregoing, the Borrower shall request to borrow at least $50,000,000 of Term
Loans on the Restatement Effective Date. The Borrower may not reborrow the Term
Loans which have been repaid. The unused portion of each Lender's Term Loan
Commitment shall expire and such Lender's Term Loan Commitment shall
automatically be permanently reduced by such amount on the Term Loan Commitment
Termination Date.
(2) Revolving Loans. During the Revolving Credit Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to
make Revolving Loans in Dollars to the Borrower in the aggregate amount up to
but not exceeding such Lender's Revolving Credit Commitment; provided, after
giving effect to the making of any Revolving Loans in no event shall the Total
Utilization of Revolving Credit Commitments exceed the Revolving Credit
Commitments then in effect. Amounts borrowed pursuant to this Section 2.1(b)
may be repaid and reborrowed during the Revolving Credit Commitment Period.
Each Lender's Revolving Credit Commitment shall expire on the Revolving Credit
Commitment Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Credit
Commitments shall be paid in full no later than such date.
(3) Prior Loans. Certain of the Lenders made the Existing Loans to the
Borrower pursuant to Section 2.1(a) of the Existing Credit Agreement. As of the
Restatement Effective Date, the aggregate unpaid principal amount of such loans
is $[48,414,549.40], which amount shall (i) be deemed outstanding as Term Loans
made under this Agreement and (ii) be allocated among the Lenders with a Term
Loan Commitment based upon each such Lender's Pro Rata Share of such Existing
Loans.
(4) Continuation and Conversion of Loans. Subject to the terms and
conditions of this Agreement, the Borrower may borrow the Loans as Prime Rate
Loans or Eurodollar Loans and, until the Term Loan Maturity Date, in the case
of Term Loans, and the Revolving Credit Commitment Termination Date, in the
case of Revolving Loans, the Borrower may Continue Eurodollar Loans or Convert
Loans of one Type into Loans of the other Type.
(5) Lending Offices. Loans of each Type made by each Lender shall be
made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 1.5 Issuance of Letters of Credit and Purchase of Participations
Therein.
(1) Letters of Credit. During the Revolving Credit Commitment Period,
subject to the terms and conditions hereof, the Issuing Bank agrees to issue
Letters of Credit for the account of the
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Borrower in the aggregate amount up to but not exceeding the Letter of Credit
Sublimit; provided, (i) each Letter of Credit shall be denominated in Dollars;
(ii) the stated amount of each Letter of Credit shall not be less than $10,000
or such lesser amount as is acceptable to the Issuing Bank; (iii) after giving
effect to such issuance, in no event shall the Total Utilization of Revolving
Credit Commitments exceed the Revolving Credit Commitments then in effect; (iv)
after giving effect to such issuance, in no event shall the Letter of Credit
Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event
shall any standby Letter of Credit have an expiration date later than the
earlier of (1) the date which is five Business Days prior to the Revolving
Credit Commitment Termination Date and (2) the date which is one year from the
date of issuance of such standby letter of credit; and (vi) in no event shall
any commercial Letter of Credit (x) have an expiration date later than the
earlier of (1) the date which is five Business Days prior to the Revolving
Credit Commitment Termination Date and (2) the date which is 180 days from the
date of issuance of such commercial Letter of Credit or (y) be issued if such
commercial Letter of Credit is otherwise unacceptable to the Issuing Bank in
its reasonable discretion. Subject to the foregoing, the Issuing Bank may agree
that a standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each, unless the Issuing Bank elects
not to extend for any such additional period; provided, the Issuing Bank shall
not extend any such Letter of Credit if it has received written notice that an
Event of Default has occurred and is continuing at the time the Issuing Bank
must elect to allow such extension.
(2) Notice of Issuance. Whenever the Borrower desires the issuance of a
Letter of Credit, it shall deliver to the Administrative Agent an Issuance
Notice no later than 12:00 p.m. (New York City time) at least three Business
Days (in the case of standby Letters of Credit) or five Business Days (in the
case of commercial Letters of Credit), or in each case such shorter period as
may be agreed to by the Issuing Bank in any particular instance, in advance of
the proposed date of issuance. Upon satisfaction or waiver of the conditions
set forth in Section 6.2, the Issuing Bank shall issue the requested Letter of
Credit only in accordance with the Issuing Bank's standard operating
procedures. Upon the issuance of any Letter of Credit or amendment or
modification to a Letter of Credit, the Issuing Bank shall promptly notify each
Lender of such issuance, which notice shall be accompanied by a copy of such
Letter of Credit or amendment or modification to a Letter of Credit and the
amount of such Lender's respective participation in such Letter of Credit
pursuant to Section 2.2(e). Within fifteen (15) days after the end of each
month ending after the Restatement Effective Date, so long as any Letter of
Credit shall have been outstanding during such month, the Issuing Bank shall
deliver to each Lender a report setting forth for such month the daily
aggregate amount available to be drawn under the Letters of Credit that were
outstanding during such month.
(3) Responsibility of the Issuing Bank With Respect to Requests for
Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, the Issuing Bank shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit. As
between the Borrower and the Issuing Bank, the Borrower assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit issued by the
Issuing Bank, by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank shall not
be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or
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forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Issuing Bank, including any Governmental
Acts; none of the above shall affect or impair, or prevent the vesting of, any
of the Issuing Bank's rights or powers hereunder. Without limiting the
foregoing and in furtherance thereof, any action taken or omitted by the
Issuing Bank under or in connection with the Letters of Credit or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put the Issuing Bank under any resulting liability to the Borrower.
Notwithstanding anything to the contrary contained in this Section 2.2(c), the
Borrower shall retain any and all rights it may have against the Issuing Bank
for any liability arising solely out of the gross negligence or willful
misconduct of the Issuing Bank.
(4) Reimbursement by the Borrower of Amounts Drawn or Paid Under
Letters of Credit. In the event the Issuing Bank has determined to honor a
drawing under a Letter of Credit, it shall immediately notify the Borrower and
the Administrative Agent. Upon such notification to it, the Borrower shall
reimburse the Issuing Bank on or before the Business Day immediately following
the date on which such drawing is honored (the "Reimbursement Date") in an
amount in Dollars and in same day funds equal to the amount of such honored
drawing; provided, anything contained herein to the contrary notwithstanding,
(i) unless the Borrower shall have notified the Administrative Agent and the
Issuing Bank prior to 10:00 a.m. (New York City time) on the date such drawing
is honored that the Borrower intends to reimburse the Issuing Bank for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, the Borrower shall be deemed to have given a timely Funding Notice to
the Administrative Agent (and the Administrative Agent shall promptly notify
each Lender having a Revolving Credit Commitment of such deemed notice)
requesting Lenders to make Revolving Loans that are Prime Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such drawing,
and (ii) subject to satisfaction or waiver of the conditions specified in
Section 6.2, Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Prime Rate Loans in the amount of such honored drawing, the proceeds
of which shall be applied directly by the Administrative Agent to reimburse the
Issuing Bank for the amount of such honored drawing; and provided further, if
for any reason proceeds of Revolving Loans are not received by the Issuing Bank
on the Reimbursement Date in an amount equal to the amount of such honored
drawing, the Borrower shall reimburse the Issuing Bank, on demand, in an amount
in same day funds equal to the excess of the amount of such honored drawing
over the aggregate amount of such Revolving Loans, if any, which are so
received. Nothing in this Section 2.2(d) shall be deemed to relieve the
Borrower of its obligation to reimburse any drawing under any Letter of Credit,
or any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth herein, and the Borrower shall retain any and all rights
it may have against any Lender resulting from the failure of such Lender to
make such Revolving Loans under this Section 2.2(d).
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(5) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Credit Commitment shall be deemed to have purchased, and hereby
agrees to irrevocably purchase, from the Issuing Bank a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Lender's Pro Rata Share (with respect to the Revolving Credit Commitments) of
the maximum amount which is or at any time may become available to be drawn
thereunder. In the event that the Borrower shall fail for any reason to
reimburse the Issuing Bank as provided in Section 2.2(d) and any Revolving
Loans required thereunder shall have not been advanced, the Issuing Bank shall
promptly notify each Lender of the unreimbursed amount of such honored drawing
and of such Lender's respective participation therein based on such Lender's
Pro Rata Share of the Revolving Credit Commitments. Each Lender shall make
available to the Issuing Bank an amount equal to its respective participation,
in Dollars and in same day funds, at the office of the Issuing Bank specified
in such notice, not later than 12:00 p.m. (New York City time) on the first
Business Day after the date notified by the Issuing Bank. In the event that any
Lender fails to make available to the Issuing Bank on such Business Day the
amount of such Lender's participation in such Letter of Credit as provided in
this Section 2.2(e), the Issuing Bank shall be entitled to recover such amount
on demand from such Lender together with interest thereon which shall accrue
for the first three Business Days following such failure at the rate
customarily used by the Issuing Bank for the correction of errors among banks
and thereafter at the Prime Rate. Nothing in this Section 2.2(e) shall be
deemed to prejudice the right of any Lender to recover from the Issuing Bank
any amounts made available by such Lender to the Issuing Bank pursuant to this
Section in the event that it is determined that the payment with respect to a
Letter of Credit in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of the Issuing
Bank. In the event the Issuing Bank shall have been reimbursed by other Lenders
pursuant to this Section 2.2(e) for all or any portion of any drawing honored
by the Issuing Bank under a Letter of Credit, such the Issuing Bank shall
distribute to each Lender which has paid all amounts payable by it under this
Section 2.2(e) with respect to such honored drawing such Lender's Pro Rata
Share of all payments subsequently received by the Issuing Bank from the
Borrower in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its Applicable
Lending Office or at such other address as such Lender may request.
(6) Obligations Absolute. The obligation of the Borrower to reimburse
the Issuing Bank for drawings honored under the Letters of Credit issued by it
and to repay any Revolving Loans made by Lenders pursuant to Section 2.2(d) and
the obligations of Lenders under Section 2.2(e) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms hereof
under all circumstances including any of the following circumstances: (i) any
lack of validity or enforceability of any Letter of Credit; (ii) the existence
of any claim, set-off, defense or other right which the Borrower or any Lender
may have at any time against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be acting), the Issuing
Bank, Lender or any other Person or, in the case of a Lender, against the
Borrower, whether in connection herewith, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between the
Borrower or one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured); (iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or other document which does not substantially comply
with the terms of such Letter of Credit; (v) any adverse change in the
business, operations, properties,
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assets, condition (financial or otherwise) or prospects of NCH or any of its
Subsidiaries; (vi) any breach hereof or any other Loan Document by any party
thereto; (vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or (viii) the fact that an Event of Default or
a Default shall have occurred and be continuing; provided, in each case, that
payment by the Issuing Bank under the applicable Letter of Credit shall not
have constituted gross negligence or willful misconduct of the Issuing Bank
under the circumstances in question.
(7) Indemnification. Without duplication of any obligation of the
Borrower under Section 11.4 or 12.2, in addition to amounts payable as provided
herein, the Borrower hereby agrees to protect, indemnify, pay and save harmless
the Issuing Bank from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which the Issuing Bank may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit by the Issuing Bank,
other than as a result of (1) the gross negligence or willful misconduct of the
Issuing Bank or (2) the wrongful dishonor by the Issuing Bank of a proper
demand for payment made under any Letter of Credit issued by it, or (ii) the
failure of the Issuing Bank to honor a drawing under any such Letter of Credit
as a result of any Governmental Act.
Section 1.6 Notes.
(1) Notes. If so requested by any Lender by written notice to the
Administrative Agent at least two Business Days prior to the Restatement
Effective, or at any time thereafter, the Loans made (and deemed made) by each
Lender shall be evidenced by a single promissory note of the Borrower, in
substantially the form of Exhibit B-1 with respect to Term Loan Notes and
Exhibit B-2 with respect to Revolving Loan Notes, dated the Restatement
Effective Date (or such later date on which such Lender requests such Notes or
becomes a party to this Agreement), payable to the order of such Lender in a
principal amount equal to the sum of (i) the aggregate principal amount of
Loans of such Lender plus (ii) the aggregate principal amount of the unfunded
Commitment of such Lender as originally in effect and otherwise duly completed.
Each Lender is hereby authorized by the Borrower to endorse on the schedule (or
a continuation thereof) attached to the Note of such Lender, to the extent
applicable, the date, amount and Type of and the Interest Period for each
applicable Loan made by such Lender to the Borrower and the amount of each
payment or prepayment of principal of such Loan received by such Lender,
provided that any failure by such Lender to make any such endorsement shall not
affect the obligations of the Borrower under any such Note or this Agreement in
respect of any such Loan.
(2) Registered Notes. Any Lender that is not a U.S. Person and that
could become completely exempt from withholding of U.S. Taxes in respect of
payment of any Obligations due to such Lender hereunder relating to any of its
Loans if such Loans were in registered form for U.S. Federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees thereupon, to exchange such Lender's Note evidencing its Loans
for a promissory note registered as provided in Section 12.8(h) hereof (a
"Registered Note"). Registered Notes may not be exchanged for Notes that are
not in registered form.
Section 1.7 Scheduled Repayment of Loans/Commitment Reductions.
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(1) Scheduled Repayment of Loans. The Borrower shall pay to the
Administrative Agent for the account of each Lender the principal of each of
the Term Loans outstanding as of the Term Loan Commitment Termination Date (and
the principal of each of the Loans outstanding as of the Term Loan Commitment
Termination Date shall be due and payable) in 16 quarterly installments,
commencing on December 31, 2003 and continuing on each Quarterly Date
thereafter through and including the Term Loan Maturity Date, each of which
installments shall be in an amount equal to the percentage of the principal
amount of the Term Loans outstanding as of the Term Loan Commitment Termination
Date specified opposite such installment in the following table:
===================================================================
Percentage of the Aggregate
Principal Amount of each of the
Quarterly Date Term Loans Due and Payable
December 31, 2003 3.75%
-------------------------------------------------------------------
March 31, 2004 3.75%
-------------------------------------------------------------------
June 30, 2004 3.75%
-------------------------------------------------------------------
September 30, 2004 3.75%
-------------------------------------------------------------------
December 31, 2004 5.00%
-------------------------------------------------------------------
March 31, 2005 5.00%
-------------------------------------------------------------------
June 30, 2005 5.00%
-------------------------------------------------------------------
September 30, 2005 5.00%
-------------------------------------------------------------------
December 31, 2005 10.00%
-------------------------------------------------------------------
March 31, 2006 10.00%
-------------------------------------------------------------------
June 30, 2006 10.00%
-------------------------------------------------------------------
September 30, 2006 10.00%
-------------------------------------------------------------------
December 31, 2006 6.25%
-------------------------------------------------------------------
March 31, 2007 6.25%
-------------------------------------------------------------------
June 30, 2007 6.25%
-------------------------------------------------------------------
September 30, 2007 6.25%
===================================================================
In addition, the Borrower shall pay to the Administrative Agent for the account
of each Lender all outstanding principal of the Term Loans (and all outstanding
principal of the Term Loans shall be due and payable) on the Term Loan Maturity
Date.
(2) Scheduled Commitment Reductions. The Revolving Credit Commitments
shall be permanently reduced in 16 quarterly installments, commencing on
December 31, 2003 and continuing on each Quarterly Date thereafter through and
including the Revolving Credit Commitment Termination Date, each of which
installments shall be in an amount equal to the percentage of the Revolving
Credit Commitment (as in effect on December 30, 2003) specified opposite such
installment in the following table:
===================================================================
Percentage of the Revolving
Quarterly Date Credit Commitment Reduction
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===================================================================
Percentage of the Revolving
Quarterly Date Credit Commitment Reduction
December 31, 2003 3.75%
-------------------------------------------------------------------
March 31, 2004 3.75%
-------------------------------------------------------------------
June 30, 2004 3.75%
-------------------------------------------------------------------
September 30, 2004 3.75%
-------------------------------------------------------------------
December 31, 2004 5.00%
-------------------------------------------------------------------
March 31, 2005 5.00%
-------------------------------------------------------------------
June 30, 2005 5.00%
-------------------------------------------------------------------
September 30, 2005 5.00%
-------------------------------------------------------------------
December 31, 2005 10.00%
-------------------------------------------------------------------
March 31, 2006 10.00%
-------------------------------------------------------------------
June 30, 2006 10.00%
-------------------------------------------------------------------
September 30, 2006 10.00%
-------------------------------------------------------------------
December 31, 2006 6.25%
-------------------------------------------------------------------
March 31, 2007 6.25%
-------------------------------------------------------------------
June 30, 2007 6.25%
-------------------------------------------------------------------
September 30, 2007 6.25%
===================================================================
In addition, the Revolving Credit Commitments shall be permanently reduced to
zero on the Revolving Credit Commitment Termination Date.
Section 1.8 Interest.
(1) Interest Rate. The Borrower shall pay to the Administrative Agent
for the account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender (or deemed made by such Lender with respect to a Loan
assigned to such Lender after the making of such Loan) to the Borrower for the
period commencing on the date of such Loan to but excluding the date such Loan
shall be paid in full, at the following rates per annum:
(1) during the periods such Loan is a Prime Rate Loan, the lesser
of (A) the Prime Rate plus the Applicable Margin or (B) the Maximum Rate;
and
(2) during the periods such Loan is a Eurodollar Loan, the lesser
of (A) the Adjusted Eurodollar Rate plus the Applicable Margin or (B) the
Maximum Rate.
(2) Payment Dates. Accrued interest on the Loans shall be due and
payable as follows:
(1) in the case of Prime Rate Loans, on each Quarterly Date in
arrears;
(2) in the case of each Eurodollar Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the
first day of such Interest Period in arrears;
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(3) upon the payment or prepayment (whether mandatory or
optional) of any Loan or the Conversion of any Loan to a Loan of the
other Type (but only on the principal amount so paid, prepaid or
Converted); and
(4) with respect to all Term Loans, on the Term Loan Maturity
Date and with respect to Revolving Loans, on the Revolving Credit
Commitment Termination Date, in each case in arrears.
In addition, accrued interest on the Existing Loans which was not paid in full
on or before the Restatement Effective Date shall be due and payable on the
last day of the "Interest Period" (as such term is defined in the Existing
Credit Agreement) with respect thereto.
(3) Interest on Letter of Credit Drawings. (i) The Borrower agrees to
pay to the Issuing Bank, with respect to drawings honored under any Letter of
Credit, interest on the amount paid by the Issuing Bank in respect of each such
honored drawing from the date such drawing is honored to but excluding the date
such amount is reimbursed by or on behalf of the Borrower at a rate equal to
(i) for the period from the date such drawing is honored to but excluding the
applicable Reimbursement Date, the rate of interest otherwise payable hereunder
with respect to Revolving Loans that are Prime Rate Loans, and (ii) thereafter,
a rate which is 2% per annum in excess of the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Prime Rate Loans.
Revolving Loans made pursuant to Section 2.2(d) shall be applied immediately to
repay outstanding draws under the Letters of Credit.
(1) Interest payable pursuant to Section 2.5(c)(i) shall be
computed on the basis of a 365-day or 366-day year, as the case may be,
for the actual number of days elapsed in the period during which it
accrues, and shall be payable on demand or, if no demand is made, on the
date on which the related drawing under a Letter of Credit is reimbursed
in full. Promptly upon receipt by the Issuing Bank of any payment of
interest pursuant to Section 2.5(c)(i), the Issuing Bank shall distribute
to each Lender, out of the interest received by the Issuing Bank in
respect of the period from the date such drawing is honored to but
excluding the date on which the Issuing Bank is reimbursed for the amount
of such drawing (including any such reimbursement out of the proceeds of
any Revolving Loans), the amount that such Lender would have been
entitled to receive in respect of the Letter of Credit fee that would
have been payable in respect of such Letter of Credit for such period if
no drawing had been honored under such Letter of Credit. In the event the
Issuing Bank shall have been reimbursed by Lenders for all or any portion
of such honored drawing, the Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under Section 2.2(e) with
respect to such honored drawing such Lender's Pro Rata Share of any
interest received by the Issuing Bank in respect of that portion of such
honored drawing so reimbursed by Lenders for the period from the date on
which the Issuing Bank was so reimbursed by Lenders to but excluding the
date on which such portion of such honored drawing is reimbursed by the
Borrower.
(4) Default Interest. Notwithstanding the foregoing, the Borrower shall
pay to the Administrative Agent for the account of each Lender interest at the
applicable Default Rate (i) at all times during which any Event of Default has
occurred and is continuing, on any principal of any
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Loan outstanding, and (ii) to the fullest extent permitted by law, any other
amount payable by the Borrower under this Agreement or any other Loan Document
to or for the account of such Lender which is not paid in full when due
(whether at stated maturity, by acceleration or otherwise) for the period from
and including the due date thereof to but excluding the date the same is paid
in full. Interest payable at the Default Rate shall be payable from time to
time on demand by the Administrative Agent.
Section 1.9 Borrowing Procedure. (A) The Borrower shall give the
Administrative Agent notice of each borrowing hereunder in accordance with
Section 2.10 and the Administrative Agent shall promptly notify each Lender
thereof. Not later than 1:00 p.m. (New York, New York time) on the date
specified for each borrowing hereunder, each Lender will make available the
amount of the Loan to be made by it on such date to the Administrative Agent,
at the Principal Office, in immediately available funds, for the account of the
Borrower. The amount of each borrowing hereunder so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available, for and on behalf of the Borrower, in immediately
available funds by no later than 1:00 p.m. (New York, New York time).
(B) Except pursuant to 2.2(d), Revolving Loans that are Prime
Rate Loans shall be made in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount, and Revolving Loans
that are Eurodollar Rate Loans shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount.
(C) Term Loans that are Prime Rate Loans shall be made in an
aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in
excess of that amount, and Term Loans that are Eurodollar Rate Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000
in excess of that amount.
Section 1.10 Optional Prepayments, Conversions and Continuations of
Loans. Subject to Section 2.9, the Borrower shall have the right from time to
time to prepay the Loans in whole or in part, to Convert all or part of a Loan
of one Type into a Loan of another Type or to Continue Eurodollar Loans;
provided that: (a) the Borrower shall give the Administrative Agent notice of
each such prepayment, Conversion or Continuation as provided in Section 2.10,
(b) Eurodollar Loans may only be Converted on the last day of the Interest
Period and any prepayment of Eurodollar Loans on any day other than the last
day of the Interest Period shall be subject to payment of the additional
compensation specified in Section 4.5, (c) except for Conversions of Eurodollar
Loans into Prime Rate Loans, no Conversions or Continuations shall be made
while a Default has occurred and is continuing, and (d) optional prepayments of
the Loans shall be applied to the principal of the Loans pro rata to the then
remaining installments of such principal. No amounts prepaid pursuant to this
Section 2.7 may be reborrowed.
Section 1.11 Mandatory Prepayments.
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(1) Asset Dispositions, etc. The Borrower shall, within two Business
Days after NCH or any of its Restricted Subsidiaries receives any Net Proceeds
of any Asset Disposition, in excess of $5,000,000 in the aggregate from the
Restatement Effective Date through the applicable date of determination (the
amount of such Net Proceeds or proceeds exceeding $5,000,000 received during
any such period are herein called the "Excess Proceeds Amount"), pay to the
Administrative Agent as a prepayment of the Term Loans and/or the Revolving
Credit Commitments shall be permanently reduced as set forth in Section 2.8(f),
an aggregate amount equal to all of the Excess Proceeds Amount; provided, that,
so long as no Default or Event of Default shall have occurred and be
continuing, no such prepayment will be required if and to the extent that the
Excess Proceeds Amount is fully re-invested within eighteen (18) months after
receipt of such proceeds in (x) acquisitions permitted under Section 9.5(i)
provided that the Borrower has given the Administrative Agent notice of the
specific acquisition within 365 days after receipt of such proceeds and such
acquisition is consummated within 180 days after such notice or (y) Capital
Expenditures permitted under Section 9.16(c) for long term productive assets of
the general type used in the business of the Borrower and its Restricted
Subsidiaries. Notwithstanding the foregoing, Net Proceeds received from the
sale of Resale Access Lines in an aggregate amount from the Restatement
Effective Date not to exceed $10,000,000 will not be required to be applied to
prepay Loans and/or reduce Commitments; provided, however, that any Net
Proceeds received from the sale of Resale Access Lines in excess of such amount
shall be subject to the first sentence of this Section 2.8(a).
(2) Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by NCH or any of its Restricted Subsidiaries,
or the Administrative Agent as loss payee, of the proceeds of any Insurance
Recovery or the proceeds of any condemnation awards, the Borrower shall pay to
the Administrative Agent as a prepayment of the Term Loans and/or the Revolving
Credit Commitments shall be permanently reduced as set forth in Section 2.8(f),
an aggregate amount equal to such Insurance Recovery and condemnation proceeds;
provided, (i) so long as no Default or Event of Default shall have occurred and
be continuing, and (ii) to the extent that the aggregate of any such Insurance
Recoveries and condemnation proceeds in any period of 12 consecutive months do
not exceed $1,000,000, the Borrower shall have the option, directly or through
one or more of its Restricted Subsidiaries to invest such Insurance Recoveries
and condemnation proceeds within 365 days of receipt thereof in long term
productive assets of the general type used in the business of the Borrower and
its Restricted Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets thereof.
(3) Issuance of Subordinated Debt. On the date of receipt by NCH or any
of its Restricted Subsidiaries of any cash proceeds (net of any underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from incurrence of any
Subordinated Debt of NCI or NCH, in excess of $300,000,000 in the aggregate
from the Restatement Effective Date through the applicable date of
determination (the amount of such net proceeds exceeding $300,000,000 received
during any such period are herein called the "Excess Debt Proceeds Amount"),
pay to the Administrative Agent as a prepayment of the Term Loans and/or the
Revolving Credit Commitments shall be permanently reduced as set forth in
Section 2.8(f), an aggregate amount equal to all of the Excess Debt Proceeds
Amount.
(4) Excess Cash Flow. The Borrower shall, commencing on March 31, 2003
and on each March 31st thereafter, pay (or cause to be paid) to the
Administrative Agent, as a prepayment of the Term Loans and/or the Revolving
Credit Commitments shall be permanently reduced as set forth
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in Section 2.8(f), an aggregate amount equal to 50% of Excess Cash Flow for the
Borrower and its Consolidated Subsidiaries for the fiscal year then most
recently ended.
(5) Revolving Loans. The Borrower shall from time to time prepay the
Revolving Loans to the extent necessary so that the Total Utilization of
Revolving Credit Commitments shall not at any time exceed the Revolving Credit
Commitments then in effect.
(6) Application of Mandatory Prepayments. All prepayments pursuant to
Sections 2.8(a) through (d) shall be applied:
first, to prepay the Term Loans and shall be further applied
on a pro rata basis to each scheduled installment of principal of the Term
Loans;
second, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Credit
Commitments by the amount of such prepayment;
third, to prepay outstanding reimbursement obligations with
respect to Letters of Credit and to further permanently reduce the
Revolving Loan Commitments by the amount of such prepayment;
fourth, to cash collateralize Letters of Credit and to
further permanently reduce the Revolving Loan Commitments by the amount
of such cash collateralization; and
fifth, to further permanently reduce the Revolving Credit
Commitments to the full extent thereof.
No prepayment shall be required to be made by the Borrower pursuant to Section
2.8 until such date as the Borrower may make such prepayment without incurring
an additional cost or expense under Section 4.5(a) as a result of such
prepayment.
(7) No Reborrowing. No amounts of the Loans prepaid pursuant to this
Section 2.8 (other than pursuant to Section 2.8(e)) may be reborrowed.
Section 1.12 Minimum Amounts. Except for Conversions and prepayments
pursuant to Section 2.8 and Article 4, each borrowing, each Conversion and each
optional prepayment of principal of the Loans shall be in an amount at least
equal to $1,000,000 or an integral multiple of $500,000 in excess thereof
(borrowings, prepayments or Conversions of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder shall be deemed separate borrowings, prepayments and Conversions
for purposes of the foregoing, one for each Type or Interest Period).
Section 1.13 Certain Notices. Notices by the Borrower to the
Administrative Agent of terminations or reductions of Commitments, of
borrowings, Conversions, Continuations and prepayments of Loans and of the
duration of Interest Periods shall be irrevocable and shall be effective only
if received by the Administrative Agent not later than 1:00 p.m. (New York, New
York, time) on the applicable Business Day prior to the date of the relevant
termination, reduction,
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borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
===============================================================================
Notice Number of Business Days Prior
===============================================================================
Terminations or Reductions of Commitments 3
-------------------------------------------------------------------------------
Borrowings of Loans which are Prime Rate
Loans 1
-------------------------------------------------------------------------------
Borrowings of Loans which are Eurodollar
Loans 3
-------------------------------------------------------------------------------
Prepayments of Loans which are Prime Rate
Loans 1
-------------------------------------------------------------------------------
Prepayments of Loans which are Eurodollar
Loans 3
===============================================================================
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.9 hereof)
and Type of the Loans to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day). Each such notice of termination, reduction, borrowing,
Conversion, Continuation or prepayment shall be in the form of Exhibit C-1
hereto, appropriately completed as applicable. Each notice of borrowing (a
"Notice of Borrowing") shall certify that all proceeds of the requested Loans
are, concurrently with the making of such Loans, being used by the Borrower for
the purpose specified in Section 2.11. Each notice which includes reference to
the duration of an Interest Period shall specify the Loans to which such
Interest Period is to relate. The Administrative Agent shall promptly notify
the Lenders of the contents of each such notice. In the event the Borrower
fails to select the Type of Loan, or the duration of any Interest Period for
any Eurodollar Loan, within the time period and otherwise as provided in this
Section 2.10, such Loan (if outstanding as Eurodollar Loan) will be
automatically Converted into a Prime Rate Loan on the last day of preceding
Interest Period for such Loan or (if outstanding as a Prime Rate Loan) will
remain as, or (if not then outstanding) will be made as, a Prime Rate Loan. The
Borrower may not borrow any Eurodollar Loans, Convert any Loans into Eurodollar
Loans or Continue any Loans as Eurodollar Loans if the interest rate for such
Eurodollar Loans would exceed the Maximum Rate.
Section 1.14 Use of Proceeds.
(1) Loans. The proceeds of the Term Loans, the Revolving Loans and the
Letters of Credit shall be applied by the Borrower for working capital and
general corporate purposes of the Borrower and its Restricted Subsidiaries,
including acquisitions, Capital Expenditures, distributions and Investments
permitted under this Agreement.
(2) Margin Stock. None of the proceeds of any Loan may be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Exchange Act or to purchase or carry any
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margin stock (within the meaning of Regulations T, U or X of the Board of
Governors of the Federal Reserve System).
Section 1.15 Fees.
(1) The Borrower agrees to pay to Lenders having Revolving Credit
Exposure
(1) commitment fees equal to (1) the average of the daily
difference between (a) the Revolving Credit Commitments, and (b) the sum
of (x) the aggregate principal amount of outstanding Revolving Loans plus
(y) the Letter of Credit Usage, times (2) the Applicable Commitment Fee
Percentage; and
(2) Letter of Credit fees equal to (1) the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans, times (2) the average
daily maximum amount available to be drawn under all such Letters of
Credit (regardless of whether any conditions for drawing could then be
met and determined as of the close of business on any date of
determination).
All fees referred to in this Section 2.12(a) shall be paid to the
Administrative Agent at its Principal Office and upon receipt, the
Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share thereof.
(2) The Borrower agrees to pay to Lenders having Term Loan Commitments
commitment fees equal to (1) the average of the daily difference between (a)
the Term Loan Commitments, and (b) the aggregate principal amount of
outstanding Term Loans, times (2) the Applicable Commitment Fee Percentage.
All fees referred to in this Section 2.12(b) shall be paid to the
Administrative Agent at its Principal Office and upon receipt, the
Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share thereof.
(3) The Borrower agrees to pay directly to the Issuing Bank, for its
own account, the following fees:
(1) a fronting fee equal to 0.125% per annum times the aggregate
daily amount available to be drawn under all Letters of Credit
(determined as of the close of business on any date of determination);
and
(2) such documentary and processing charges for any issuance,
amendment, transfer or payment of a Letter of Credit as are in accordance
with the Issuing Bank's standard schedule for such charges and as in
effect at the time of such issuance, amendment, transfer or payment, as
the case may be.
(4) All fees referred to in Section 2.12(a), 2.12(b) and 2.12(c)(i)
shall be calculated on the basis of a 360-day year and the actual number of
days elapsed and shall be payable quarterly in arrears on each Quarterly Date
of each year during the Revolving Credit Commitment Period and Term Loan
Commitment Period, as applicable, commencing on the first such date to occur
after the
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Restatement Effective Date, and ending on the Revolving Credit Commitment
Termination Date or the Term Loan Commitment Termination Date, as applicable.
(5) Subject to Section 12.12, the Borrower agrees to pay to the
Administrative Agent such additional fees as are specified in the
Administrative Agent's Letter, which fees shall be payable in such amounts and
on such dates as are specified therein.
Section 1.16 Computations. Interest payable under Sections 2.5(a) and (d)
and fees payable under Section 2.12 shall be computed (i) in the case of Prime
Rate Loans and in respect of any other amount payable by the Borrower under
this Agreement or any other Loan Document which is not paid when due (whether
at stated maturity, by acceleration or otherwise), on the basis of a 365-day or
366-day year, as the case may be, and (ii) in the case of Eurodollar Loans and
such fees, on the basis of a 360-day year, in each case for the actual number
of days elapsed (including the first day but excluding the last day) occurring
in the period for which payable.
Section 1.17 Termination or Reduction of Commitments.
(1) Notwithstanding anything to the contrary contained in this
Agreement, the Commitments shall automatically terminate upon the occurrence of
any Change in Control.
(2) The Borrower shall have the right to terminate or reduce in part at
any time and from time to time, without premium or penalty, the Revolving
Credit Commitments in an amount up to the amount by which the Revolving Credit
Commitments exceed the Total Utilization of Revolving Credit Commitments at the
time of such proposed termination or reduction; provided, however, that no such
termination or reduction shall be effective unless the Borrower shall have
given notice of each such termination or reduction as provided in Section 2.10
and each partial reduction of the Revolving Credit Commitments shall be in an
aggregate amount at least equal to $5,000,000.
(3) The Commitments may not be reinstated after they have been
terminated or increased after they have been reduced.
Section 1.18 Incremental Facility Commitments and Loans.
(1) Incremental Facility Commitments. The Borrower may elect, subject
to approval of Required Lenders and the consent of the Administrative Agent, to
increase the Commitments (the "Incremental Facility Commitments") by an
aggregate amount not in excess of the Incremental Facility Maximum Amount. The
Incremental Facility Commitment may be allocated to any Lender or other Person
which meets the requirements of an Eligible Assignee and which elects, in its
sole discretion, to provide such Incremental Facility Commitment (each, an
"Incremental Facility Lender"); provided that any Lender given the option to
participate in any Incremental Facility Commitment may elect or decline, in its
sole discretion, to provide such Incremental Facility Commitment.
(2) Conditions to Incremental Facility Amounts. Any Incremental
Facility Commitments shall become effective and, if applicable, any Incremental
Facility Loans shall be made, as of the date (such date, the "Incremental
Facility Effective Date") on which each of the following conditions precedent
are satisfied to the satisfaction of the Administrative Agent:
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(1) no Default or Event of Default shall exist as of such date
before or after giving effect to such Incremental Facility Commitments;
(2) NCI and its Subsidiaries shall be in pro forma compliance
with each of the covenants set forth in Section 9.16 as of the last day
of the most recently ended fiscal quarter after giving effect to such
Incremental Facility Loans;
(3) both before and after giving effect to the making of any
Incremental Facility Loans, each of the conditions set forth in Section
6.2 shall be satisfied;
(4) each increase in the Commitments shall be effected pursuant
to one or more joinder agreements to this Agreement, in each case in form
and substance reasonably satisfactory to the Administrative Agent, and
executed by each Loan Party and each Incremental Facility Lender and
delivered to the Administrative Agent and recorded in the Register;
(5) the Borrower shall make any payments required pursuant to
Section 4.5;
(6) the Borrower shall have obtained the approval of the Required
Lenders;
(7) the Borrower shall have delivered to the Administrative Agent
and each Lender a revised set of consolidated financial projections
(including balance sheets, income statements and cash flow statements)
for NCI and its Consolidated Subsidiaries for a period of not less than
eight years from the Restatement Effective Date, such projections giving
effect to the Debt to be incurred under the Incremental Facility
Commitments;
(8) the Incremental Facility Loans (a) shall have a combined
weighted average scheduled maturity date which is not less than the
combined remaining weighted average scheduled maturity date for the Term
Loans and the Revolving Credit Commitments, (b) shall be deemed for all
purposes to be Loans hereunder secured by, and shall share equally and
ratably with and to the same extent as, the Liens on the Collateral
securing the Obligations pursuant to the Security Documents, and (c)
shall be entitled to receive prepayments made pursuant to Section 2.8 in
accordance with the terms of the Incremental Facility Loans approved by
the Required Lenders; and
(9) the Borrower shall deliver or cause to be delivered any legal
opinions or other documents reasonably requested by the Administrative
Agent in connection with any such transaction.
(3) Effect of Incremental Facility Amounts. The Administrative Agent
shall notify the Lenders promptly of the occurrence of each Incremental
Facility Effective Date and in respect thereof the Incremental Facility
Commitments, the Incremental Facility Loans, and the Incremental Facility
Lenders, and, in the case of each notice to any Revolving Lender, the
respective interests in such Revolving Lender's Revolving Loans subject to
assignments, if any, which may be required if the Revolving Credit Commitments
are increased as a result of the Incremental Facility Commitments contemplated
by this section.
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ARTICLE 3
Payments
Section 1.19 Method of Payment. All payments of principal, interest, fees
and other amounts to be made by the Borrower under this Agreement and the other
Loan Documents shall be made to the Administrative Agent at the Principal
Office for the account of each Lender's Applicable Lending Office in Dollars
and in immediately available funds, without setoff, deduction or counterclaim,
not later than 1:00 p.m. (New York, New York time) on the date on which such
payment shall be due (each such payment made after such time on such due date
to be deemed to have been made on the next succeeding Business Day). The
Borrower shall, at the time of making each such payment, specify to the
Administrative Agent the sums payable by the Borrower under this Agreement and
the other Loan Documents to which such payment is to be applied (and in the
event that the Borrower fails to so specify, or if an Event of Default has
occurred and is continuing, the Administrative Agent may apply such payment to
the Obligations in such order and manner as the Administrative Agent may elect,
subject to Section 3.2). Upon the occurrence and during the continuation of an
Event of Default, all proceeds of any Collateral, and all other funds of the
Borrower in the possession of the Administrative Agent or any Lender, may be
applied by the Administrative Agent to the Obligations in such order and manner
as the Administrative Agent may elect, subject to Section 3.2. Each payment
received by the Administrative Agent under this Agreement or any other Loan
Document for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds, for the account of such Lender's Applicable
Lending Office. Whenever any payment under this Agreement or any other Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 1.20 Pro Rata Treatment. Except to the extent otherwise provided
in this Agreement: (a) each Loan shall be made by the Lenders under Section
2.1, each payment of commitment fees under Section 2.12 shall be made for the
account of the Lenders, and each termination or reduction of the Commitments
under Section 2.14 shall be applied to the Commitments of the Lenders, pro rata
according to the respective unused Commitments; (b) the making, Conversion and
Continuation of Loans of a particular Type (other than Conversions provided for
by Section 4.4) shall be made pro rata among the Lenders holding Loans of such
Type according to the amounts of their respective Commitments; (c) each payment
and prepayment by the Borrower of principal of or interest on Loans of a
particular Type shall be made to the Administrative Agent for the account of
the Lenders holding Loans of such Type pro rata in accordance with the
respective unpaid principal amounts of such Loans held by such Lenders; and (d)
Interest Periods for Loans of a particular Type shall be allocated among the
Lenders holding Loans of such Type pro rata according to the respective
principal amounts held by such Lenders.
Section 1.21 Sharing of Payments, Etc. If a Lender shall obtain payment of
any principal of or interest on any of the Obligations due to such Lender
hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders participations in the Obligations held by the other Lenders in
such amounts,
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and make such adjustments from time to time, as shall be equitable to the end
that all the Lenders shall share pro rata in accordance with the unpaid
principal and interest on the Obligations then due to each of them. To such
end, all of the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if all or any portion of such
excess payment is thereafter rescinded or must otherwise be restored. The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the
Obligations by the other Lenders may exercise all rights of setoff, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Obligations in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness, liability or obligation of the Borrower.
Section 1.22 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Borrower (the
"Payor") prior to the date (or, in the case of Prime Rate Loans, prior to 1:00
p.m. (New York New York time) on such date) on which such Lender is to make
payment to the Administrative Agent of the proceeds of a Loan to be made by it
hereunder or the Borrower is to make a payment to the Administrative Agent for
the account of one or more of the Lenders, as the case may be (such payment
being herein called the "Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to
the Administrative Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient of such payment shall, on demand, pay to
the Administrative Agent the amount made available to it together with interest
thereon in respect of the period commencing on the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such period.
Section 1.23 Taxes.
(1) All payments by the Borrower of principal of and interest on the
Loans and of all fees and other amounts payable under the Loan Documents shall
be made free and clear of, and without withholding or deduction by reason of,
any present or future taxes, levies, duties, imposts, assessments or other
charges levied or imposed by any Governmental Authority (other than franchise
taxes and taxes on the overall net income of any Lender). If any such taxes,
levies, duties, imposts, assessments or other charges are so levied or imposed,
the Borrower will (i) make additional payments in such amounts so that every
net payment of principal of and interest on the Loans and of all other amounts
payable by it under the Loan Documents, after withholding or deduction for or
on account of any such present or future taxes, levies, duties, imposts,
assessments or other charges (including any tax imposed on or measured by net
income of a Lender attributable to payments made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest attributable to such
payments), will not be less than the amount provided for herein or therein
absent such withholding or deduction (provided that the Borrower shall not have
any obligation to pay such additional amounts to any Lender to the extent that
such taxes, levies, duties, imposts, assessments or other charges are levied or
imposed by reason of the failure of such Lender to comply with the provisions
of Section 3.6), (ii) make such withholding or deduction and (iii) remit the
full amount
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deducted or withheld to the relevant Governmental Authority in accordance with
applicable law. Without limiting the generality of the foregoing, the Borrower
will, upon written request of any Lender, reimburse each such Lender for the
amount of (A) such taxes, levies, duties, imports, assessments or other charges
so levied or imposed by any Governmental Authority and paid by such Lender as a
result of payments made by the Borrower under or with respect to the Loans
other than such taxes, levies, duties, imports, assessments and other charges
previously withheld or deducted by the Borrower which have previously resulted
in the payment of the required additional amount to such Lender, and (B) such
taxes, levies, duties, assessments and other charges so levied or imposed with
respect to any Lender reimbursement under the foregoing clause (A), so that the
net amount received by such Lender (net of payments made under or with respect
to the Loans) after such reimbursement will not be less than the net amount
such Lender would have received if such taxes, levies, duties, assessments and
other charges on such reimbursement had not been levied or imposed. The
Borrower shall furnish promptly to the Administrative Agent for distribution to
each affected Lender, as the case may be, upon request of such Lender, official
receipts evidencing any such payment, withholding or reduction.
(2) The Borrower will indemnify the Administrative Agent and each
Lender (without duplication) against, and reimburse the Administrative Agent
and each Lender for, all present and future taxes, levies, duties, imposts,
assessments or other charges (including interest and penalties) levied or
collected (whether or not legally or correctly imposed, assessed, levied or
collected), excluding, however, any taxes imposed on the overall net income of
the Administrative Agent or such Lender or any lending office of the
Administrative Agent or such Lender by any jurisdiction in which the
Administrative Agent or such Lender or any such lending office is located, on
or in respect of this Agreement, any of the Loan Documents or the Obligations
or any portion thereof (the "reimbursable taxes"). Any such indemnification
shall be on an after-tax basis, taking into account any such reimbursable taxes
imposed on the amounts paid as indemnity.
(3) Without prejudice to the survival of any other term or provision of
this Agreement, the obligations of the Borrower under this Section 3.5 shall
survive the payment of the Loans and the other Obligations and termination of
the Commitments.
Section 1.24 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Restatement Effective Date or
the date upon which it initially becomes a party to this Agreement and if it is
legally able to do so, deliver to the Borrower and the Administrative Agent two
duly completed copies of U.S. Internal Revenue Service Form W-8BEN, W-8EIC or
W-8 or other equivalent documents, as appropriate, certifying in any case that
such Lender is entitled to receive payments from the Borrower under any Loan
Document without deduction or withholding of any U.S. federal income taxes.
Each Lender which so delivers a Form W-8BEN, W-8EIC or W-8 or other equivalent
documents, as appropriate, further undertakes to deliver to the Borrower and
the Administrative Agent, to the extent it may legally do so, two additional
copies of such form (or a successor form) on or before the date such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Administrative Agent, in each case certifying that such Lender
is entitled to receive payments from the Borrower under any Loan Document
without deduction or withholding of any U.S. federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation)
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has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving such payments without any deduction or withholding of U.S.
federal income tax.
Section 1.25 Reinstatement of Obligations. Notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, if the
payment of any amount of principal of or interest with respect to the Loans or
any other amount of the Obligations, or any portion thereof, is rescinded,
voided or must otherwise be refunded by the Administrative Agent or any Lender
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise
for any reason whatsoever, then each of (a) the Obligations, (b) the Loan
Documents (including, without limitation, this Agreement, the Notes and the
Security Documents), (c) the indebtedness, liabilities and obligations of the
Borrower and any other Loan Parties and (d) all Liens for the benefit of the
Agents, the Lenders and the Lender Counterparties created under or evidenced by
the Loan Documents, will be automatically reinstated and become automatically
effective and in full force and effect, all to the extent that and as though
such payment so rescinded, voided or otherwise refunded had never been made.
Section 1.26 No Force Majeure, Disputes. The Borrower's obligation to pay
all amounts due under the Loans and the other Obligations shall not be affected
by (a) any set-off, counterclaim, recoupment, deduction, abatement, suspension,
diminution, reduction, defense or other right which the Borrower may have
against any Agent or any Lender for any reason whatsoever (b) any insolvency,
bankruptcy, reorganization or similar proceedings by or against the Borrower or
affecting any of its Properties, (c) any action of any Governmental Authority
or any damage to or destruction of or any taking of the Borrower's Property or
any part thereof, (d) any change, waiver, extension, indulgence or failure to
perform or comply with, or other action or omission herein or in the other Loan
Documents (except for express written modifications to this Agreement or other
Loan Documents as and in the manner permitted under this Agreement or the other
Loan Documents), (e) any dissolution of the Borrower or Change of Control, (f)
any inability or illegality with respect to the use or ownership of the
Borrower's Property, (g) any failure to obtain, or expiration, suspension or
other termination of, or interruption to, any required licenses, permits,
consents, authorizations, approvals or other legal requirements, (h) the
invalidity or unenforceability of any of the Loan Documents or any other
infirmity therein or any lack of power or authority of the Administrative Agent
or any Lender or the Borrower, or (i) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing and whether or not
the Borrower shall have notice or knowledge of any of the foregoing, it being
the intention of the Administrative Agent and the Lenders and the Borrower that
the Obligations of the Borrower shall be absolute and unconditional and shall
be separate and independent covenants and agreements and shall continue
unaffected unless the requirements to pay or perform the same shall have been
terminated pursuant to an express provision thereof or of any of the other Loan
Documents.
ARTICLE 4
Yield Protection and Illegality
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Section 1.27 Additional Costs.
(1) The Borrower shall pay directly to each Lender from time to time,
promptly upon the request of such Lender, the costs incurred by such Lender
which such Lender determines are attributable to its making or maintaining of
any Eurodollar Loans or its obligation to make any of such Loans, or any
reduction in any amount receivable by such Lender hereunder in respect of any
such Loans or obligations (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which:
(1) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Notes in respect of any of such Loans
(other than taxes imposed on the overall net income of such Lender or its
Applicable Lending Office for any of such Loans by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(2) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any extensions
of credit or other assets of, or any deposits with or other liabilities
or commitments of, such Lender (including any of such Loans or any
deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof, but excluding the Reserve Requirement to the extent it is
included in the calculation of the Adjusted Eurodollar Rate); or
(3) imposes any other condition affecting this Agreement or the
Notes or any extensions of credit or liabilities or commitments
contemplated hereunder or thereunder.
Each Lender will notify the Borrower (with a copy to the Administrative Agent)
of any event occurring after the Restatement Effective Date which will entitle
such Lender to compensation pursuant to this Section 4.1(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the Borrower) will designate a different
Applicable Lending Office for the Eurodollar Loans of such Lender if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule or
regulation or be in any way disadvantageous to such Lender, provided that such
Lender shall have no obligation to so designate an Applicable Lending Office
located in the U.S. Each Lender will furnish the Borrower with a certificate
setting forth the basis and the amount of each request of such Lender for
compensation under this Section 4.1(a). If any Lender requests compensation
from the Borrower under this Section 4.1(a), the Borrower may, by notice to
such Lender (with a copy to the Administrative Agent), suspend the obligation
of such Lender to make or Continue making, or Convert Prime Rate Loans into,
Eurodollar Loans until the Regulatory Change giving rise to such request ceases
to be in effect (in which case the provisions of Section 4.4 hereof shall be
applicable).
(2) Without limiting the effect of the foregoing provisions of this
Section 4.1, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject to restrictions
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on the amount of such a category of liabilities or assets which it may hold,
then, if such Lender so elects by notice to the Borrower (with a copy to the
Administrative Agent), the obligation of such Lender to make or Continue
making, or Convert Prime Rate Loans into, Eurodollar Loans hereunder shall be
suspended until such Regulatory Change ceases to be in effect (in which case
the provisions of Section 4.4 hereof shall be applicable).
(3) Determinations and allocations by any Lender for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs of maintaining
its obligation to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be conclusive
in the absence of manifest error, provided that such determinations and
allocations are made on a reasonable basis. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be required to make any
payment of Additional Costs to any Lender pursuant to this Section 4.1 with
respect to Additional Costs relating to any period of time which is more than
120 days prior to such Lender's request for such Additional Costs, provided
that the foregoing provisions of this sentence shall not apply to Additional
Costs attributable to any Regulatory Change which takes effect retroactively.
Section 1.28 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(1) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being provided in the relative amounts or for the relative
maturities for purposes of determining the rate of interest for such Loans as
provided in this Agreement; or
(2) the Required Lenders determine (which determination shall be
conclusive absent manifest error) and notify the Administrative Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate"
or "Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis of which the
rate of interest for such Loans for such Interest Period is to be determined do
not accurately reflect the cost to the Lenders of making or maintaining such
Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under no
obligation to make Eurodollar Loans or to Convert Prime Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or Convert such Loans into Prime Rate Loans in accordance with the terms
of this Agreement.
Section 1.29 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
or (b) maintain Eurodollar Loans, then such Lender shall promptly notify the
Borrower (with a copy to the Administrative Agent) thereof and such Lender's
obligation to make or maintain Eurodollar Loans and to Convert Prime Rate Loans
into Eurodollar Loans hereunder shall be suspended until such time as such
Lender may again make and maintain Eurodollar Loans (in which case the
provisions of Section 4.4 hereof shall be applicable).
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Section 1.30 Treatment of Affected Loans. If the obligation of any Lender
to make or Continue, or to Convert Prime Rate Loans into, Eurodollar Loans is
suspended pursuant to Sections 4.1 or 4.3 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Prime Rate Loans on the last day(s)
of the then current Interest Period(s) for the Eurodollar Loans (or, in the
case of a Conversion required by Sections 4.1(b) or 4.3 hereof, on such earlier
date as such Lender may specify to the Borrower with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Sections 4.1 or 4.3 hereof
which gave rise to such Conversion no longer exist:
(1) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Prime
Rate Loans; and
(2) all Loans which would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made as or Converted into Prime Rate Loans and all
Loans of such Lender which would otherwise be Converted into Eurodollar Loans
shall be Converted instead into (or shall remain as) Prime Rate Loans.
If such Lender gives notice to the Borrower that the circumstances specified in
Sections 4.1 or 4.3 hereof which gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 4.4 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurodollar Loans are outstanding, such Lender's Prime Rate Loans
shall be automatically Converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Eurodollar Loans and by such Lender are held pro rata (as to principal
amounts, Types and Interest Periods) in accordance with their respective
Commitments.
Section 1.31 Compensation. The Borrower shall pay to the Administrative
Agent for the account of each Lender, promptly upon the request of such Lender
through the Administrative Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss, cost
or expense incurred by it as a result of:
(1) Any payment, prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the outstanding
Loans pursuant to Section 10.2) on a date other than the last day of an
Interest Period for such Loan; or
(2) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 6 to
be satisfied) to borrow, Convert or prepay a Eurodollar Loan on the date for
such borrowing, Conversion or prepayment specified in the relevant notice of
borrowing, prepayment or Conversion under this Agreement.
Section 1.32 Capital Adequacy. If, after the Restatement Effective Date,
any Lender shall have determined that the adoption or implementation of any
applicable law, rule or regulation regarding capital adequacy (including,
without limitation, any law, rule or regulation implementing the Basle Accord),
or any change therein, or any change in the interpretation or
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administration thereof by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or compliance by
such Lender (or its parent) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any central bank
or other Governmental Authority (including, without limitation, any guideline
or other requirement implementing the Basle Accord), has or would have the
effect of reducing the rate of return on such Lender's (or its parent's)
capital as a consequence of its obligations hereunder or the transactions
contemplated hereby to a level below that which such Lender (or its parent)
could have achieved but for such adoption, implementation, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time, within ten Business Days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its parent) for such
reduction. A certificate of such Lender claiming compensation under this
Section 4.6 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such amount
or amounts, such Lender may use any reasonable averaging and attribution
methods. Notwithstanding anything to the contrary contained herein, the
Borrower shall not be required to make any payment of additional amounts to any
Lender pursuant to this Section 4.6 with respect to additional amounts relating
to any period of time which is more than 120 days prior to such Lender's
request for such additional amounts, provided that the foregoing provisions of
this sentence shall not apply to additional amounts attributable to any such
change as is described in the first sentence of this Section 4.6 which takes
effect retroactively.
Section 1.33 Additional Interest on Eurodollar Loans. Without duplication
of Section 2.5 or amounts directly included in the definition of the term
"Adjusted Eurodollar Rate", the Borrower shall pay, directly to each Lender
from time to time, additional interest on the unpaid principal amount of each
Eurodollar Loan held by such Lender, from the date of the making of such
Eurodollar Loan until such principal amount is paid in full, at an interest
rate per annum determined by such Lender in good faith equal to the positive
remainder (if any) of (a) the Adjusted Eurodollar Rate applicable to such
Eurodollar Loan minus (b) the Eurodollar Rate applicable to such Eurodollar
Loan. Each payment of additional interest pursuant to this Section 4.7 shall be
payable by the Borrower on each date upon which interest is payable on such
Eurodollar Loan pursuant to Section 2.5(b); provided, however, that the
Borrower shall not be obligated to make any such payment of additional interest
until the first Business Day after the date when the Borrower has been informed
(i) that such Lender is subject to a Reserve Requirement and (ii) of the amount
of such Reserve Requirement (after which time the Borrower shall be obligated
to make all such payments of additional interest, including, without
limitation, such payment of additional interest that otherwise would have been
payable by the Borrower on or prior to such time had the Borrower been earlier
informed).
Section 1.34 Replacement of Lenders. If at any time a Lender becomes a
(i) Gross Up Lender (as defined in this Section 4.8) the Borrower shall have
the right to replace such Gross Up Lender with another Person; provided that
(a) such other Person shall be an Eligible Assignee and such other Person shall
execute an Assignment and Acceptance, (b) neither the Administrative Agent nor
any Lender shall have any obligation to the Borrower to find such other Person,
(c) in the event of a replacement of a Gross Up Lender, in order for the
Borrower to be entitled to replace such Lender, such replacement must take
place no later than 90 days after the date the Gross Up Lender shall notify the
Borrower and the Administrative Agent of its desire to be paid any amounts
pursuant
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to Sections 3.5, 4.1 or 4.6, and (d) if the Borrower replaces one Gross Up
Lender, it must replace all Gross Up Lenders or, if less than all, reallocate
the affected Loans of all Gross Up Lenders on a pro rata basis to such other
Person. Each Lender agrees to its replacement at the option of the Borrower
pursuant to this Section 4.8 and in accordance with Section 12.8; provided that
the successor Lender shall purchase without recourse such Lender's interest in
the Obligations of the Borrower to such Lender for cash in an aggregate amount
equal to the aggregate unpaid principal thereof, all unpaid interest accrued
thereon, all unpaid commitment fees accrued for the account of such Lender, any
breakage costs incurred by the selling Lender because of the prepayment of any
Eurodollar Loans, all other fees (if any) applicable thereto and all other
amounts (including any amounts under this Article 4) then owing to such Lender
hereunder or under any other Loan Document and the Loan Parties shall execute a
release addressed to such Lender releasing such Lender from all claims arising
in connection with the Loan Documents. Any Lender who requests a payment
pursuant to Sections 3.5, 4.1 or 4.6 shall be deemed a "Gross Up Lender".
ARTICLE 5
Security
Section 1.35 Collateral. To secure the full and complete payment and
performance of the Obligations, the Borrower will, and will cause NCH, NII, NCO
and each of the other Restricted Subsidiaries of the Borrower to, grant to the
Administrative Agent for the benefit of the Agents, the Lenders and the Lender
Counterparties a perfected, first priority Lien on all of its right, title and
interest in and to the Collateral, whether now owned or hereafter acquired,
pursuant to the Security Documents, including, without limitation, the
following:
(1) all Capital Stock of the Borrower and its Subsidiaries owned by
NCH, the Borrower or any Restricted Subsidiary of the Borrower;
(2) all of the Property (as such Property is more specifically
described in the Security Documents) of the Borrower, NCH, and each of the
Restricted Subsidiaries of the Borrower, including, without limitation, the
following: Investments (including certificates of deposit); accounts; inventory
(including, without limitation, work in process); equipment; deposit accounts
(including cash collateral accounts), contract rights (including, without
limitation, all contracts relating to the construction or operation of the
Network, including rights of way, easements, leases and all related contracts);
customer deposits in connection with purchase orders; general intangibles;
Mortgaged Properties; instruments; chattel paper; Permits; Intellectual
Property; and intercompany Debt;
(3) all cash and non-cash proceeds and products of any of the
foregoing;
(4) all intercompany Debt of the Borrower and its Subsidiaries; and
(5) all real Properties and interests therein (if any) in which the
Administrative Agent is required to have been or to be granted a Lien in
accordance with Section 5.4 of the Existing Credit Agreement or Section 5.4
hereof.
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Section 1.36 Guaranties. The Borrower shall cause NCH and each of their
respective Restricted Subsidiaries (whether owned as of the Restatement
Effective Date or thereafter organized or created) to Guarantee the payment and
performance of the Obligations pursuant to the Guaranties.
Section 1.37 New Subsidiaries; Additional Capital Stock. Contemporaneously
with the creation or acquisition of any Subsidiary of the Borrower after the
Restatement Effective Date, the Borrower shall:
(1) grant or cause to be granted to the Administrative Agent, for the
benefit of the Agents, the Lenders and the Lender Counterparties, a perfected,
first priority security interest in all Capital Stock of such Subsidiary owned
by the Borrower or any Subsidiary of the Borrower;
(2) cause each such Subsidiary to Guarantee the payment and performance
of the Obligations by executing and delivering to the Administrative Agent a
Guaranty or a joinder therein acceptable to the Administrative Agent; and
(3) cause each such Subsidiary to execute and deliver to the
Administrative Agent a Security Agreement and such other Security Documents, in
form and substance acceptable to the Administrative Agent, as the
Administrative Agent may request to grant the Administrative Agent, for the
benefit of the Agents, the Lenders and the Lender Counterparties, a perfected,
first priority Lien on all Property of such Subsidiary.
Contemporaneously with the issuance of any additional Capital Stock of the
Borrower or any of the Subsidiaries of NCH or the Borrower after the
Restatement Effective Date, the Borrower shall, and shall cause NCH and each of
the Restricted Subsidiaries of the Borrower to, grant or cause to be granted to
the Administrative Agent, for the benefit of the Agents, the Lenders and the
Lender Counterparties, a perfected, first priority security interest in all
Capital Stock or other ownership interests in the Borrower or such Subsidiary
owned by NCH, the Borrower or any Restricted Subsidiary of NCH or the Borrower.
The Borrower covenants that none of the Capital Stock to be pledged in
accordance with this Section 5.3 shall be subject to any transfer restriction,
shareholders' agreement or other restriction except for such restrictions under
applicable securities laws, such restrictions existing as of the Restatement
Effective Date which have been disclosed to the Administrative Agent in the
Security Documents and such restrictions, if any, as may be reasonably
acceptable to the Administrative Agent. In connection with and in addition to
the foregoing, the Borrower shall, and shall cause NCH and each of the
Restricted Subsidiaries of the Borrower and other appropriate Persons (as
applicable) to, execute and/or deliver such further agreements, documents and
instruments (including, without limitation, stock certificates, stock powers
and financing statements) as the Administrative Agent may reasonably request in
order for it to obtain and maintain the perfected, first priority Liens to be
granted in accordance with this Section 5.3.
Section 1.38 New Mortgaged Properties; Landlord Waivers. The Borrower
shall, and shall cause each of the other Loan Parties to, contemporaneously
with the acquisition of any fee real Property, execute, acknowledge and deliver
to the Administrative Agent a Mortgage or an amendment or modification to an
existing Mortgage covering all fee real Property acquired by any such Loan
Party subsequent to the Restatement Effective Date, together with evidence
satisfactory to the Administrative Agent and its counsel that the Mortgage
creates a valid, first priority Lien on the fee estate, in favor of the
Administrative Agent for the benefit of the Agents, the Lenders and the
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Lender Counterparties. Following the date of each such acquisition of Property,
if reasonably requested by the Administrative Agent, the Borrower shall, and
shall cause each of such Loan Parties with an interest in such Property to,
provide the Administrative Agent with a current environmental assessment of
such Property in form and substance reasonably satisfactory to the
Administrative Agent. In addition, with respect to each lease of real Property
executed by any Loan Party relating to a real Property location where inventory
or equipment of a Loan Party having an aggregate fair market value in excess of
$1,000,000 is or will be located, the Borrower will, and will cause each Loan
Party to, obtain waivers of landlord's Liens from each lessor and other
agreements from such lessor and its lenders necessary or appropriate to ensure
the Administrative Agent's perfected, first priority Lien on the Collateral or
Property affected thereby, the Administrative Agent's access to such Collateral
or Property and the right of the Administrative Agent, the Lenders or their
designee to succeed to the rights of the Loan Party that is the lessee under
the lease, in each case in form and substance reasonably satisfactory to the
Administrative Agent.
Section 1.39 Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived
by the Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final excluding any trust accounts) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement,
such Lender's Note or any other Loan Document, irrespective of whether or not
the Administrative Agent or such Lender shall have made any demand under this
Agreement, such Lender's Note or any such other Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower (with a copy to the Administrative Agent) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of each Lender
hereunder are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Lender may have.
ARTICLE 6
Conditions Precedent
Section 1.40 Restatement Effective Date. The occurrence of the
Restatement Effective Date pursuant to Section 12.24, and the obligation of
each Lender to make its initial Credit Extension under this Agreement (other
than the loans made pursuant to the Existing Credit Agreement which are deemed
outstanding hereunder as provided in Section 2.1(c)) and the obligation of the
Issuing Bank to issue Letters of Credit, in each case on the Restatement
Effective Date, are, in addition to the conditions precedent specified in
Sections 6.2 and 6.3, subject to the receipt by the Administrative Agent, on or
before the Restatement Effective Date, of all of the following in form and
substance satisfactory to the Administrative Agent and, in the case of actions
to be taken, the taking of the following required actions and evidence that
such actions have been taken to the satisfaction of the Administrative Agent:
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(1) Resolutions. Resolutions of the Board of Directors, certified by
the Secretary or an Assistant Secretary, of each Loan Party which authorize the
execution, delivery and performance by such Loan Party of the Loan Documents to
which it is or is to be a party;
(2) Incumbency Certificate. A certificate of incumbency certified by
the Secretary or an Assistant Secretary (or other analogous officer) of each
Loan Party certifying as to the name of each officer or other representative of
such Loan Party (i) who is authorized to sign the Loan Documents to which it is
or is to be a party (including any certificates contemplated therein), together
with specimen signatures of each such officer or other representative, and (ii)
who will, until replaced by other officers or representatives duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with the
Loan Documents and the transactions contemplated thereby;
(3) Articles or Certificates of Incorporation. The articles or
certificate of incorporation or other analogous constitutional documents of
each Loan Party certified by the Secretary of State or other applicable
Governmental Authority of the state of incorporation of such corporation and
dated as of a recent date;
(4) Bylaws. The bylaws or other analogous constitutional documents of
each Loan Party certified by its Secretary or an Assistant Secretary (or other
analogous officer);
(5) Governmental Certificates. Certificates of appropriate officials as
to the existence and good standing of each of the Loan Parties in its
jurisdiction of incorporation or organization and in all jurisdictions in which
such Loan Party is qualified or is required to qualify to do business as a
foreign entity, each such certificate to be dated as of a Current Date;
(6) Notes. The Notes, to the extent requested by a Lender pursuant to
Section 2.3(a), duly completed and executed by the Borrower (one payable to the
order of each requesting Lender with respect to its Commitment);
(7) Mortgages. NCH, NII, NCO the Borrower and its other Restricted
Subsidiaries shall execute Mortgages in favor of the Administrative Agent for
the benefit of the Agents, the Lenders and the Lender Counterparties covering
all real property owned, if any, by NCH, NII, NCO, the Borrower and its other
Restricted Subsidiaries, and with respect to each tract of real property owned,
if any, by NCH, NII, NCO, the Borrower and its other Restricted Subsidiaries
shall provide to the Administrative Agent a mortgagee policy of title insurance
insuring the first Lien status of each such Mortgage, a current survey
certified to the Administrative Agent and the Lenders, an appraisal complying
with all applicable regulatory requirements, and an environmental survey
acceptable to the Administrative Agent.
(8) Other Security Documents. Security Documents executed by each of
the Loan Parties pertaining to the Collateral (including, without limitation,
Security Agreements executed by each such Loan Party (other than the Loan
Parties party to the Existing Security Agreements) and the Acknowledgment
Agreement executed by each Loan Party party thereto) together with all related
financing statements and other filings, consents to collateral assignments from
all parties to all Material Contracts included as part of the Collateral in
form and substance acceptable to the Administrative Agent, delivery of all
pledged Capital Stock and instruments together with
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appropriate stock powers and endorsements and, with respect to each existing
lease of real Property by any Loan Party relating to a real Property location
where inventory or equipment of a Loan Party having an aggregate fair market
value in excess of $1,000,000 is or will be located, waivers of landlord's
Liens from each lessor and other agreements from such lessor and its lenders
necessary or appropriate to ensure the Administrative Agent's perfected, first
priority Lien on the Collateral or Property affected thereby, the
Administrative Agent's access to such Collateral or Property and the right of
the Administrative Agent, the Lenders or their designee to succeed to the
rights of the Loan Party that is the lessee under the lease, in each case in
form and substance reasonably satisfactory to the Administrative Agent;
(9) Other Guaranties. Guaranties executed by each of the Loan Parties
(other than the Loan Parties party to the Existing Guaranties), in each case in
form and substance reasonably satisfactory to the Administrative Agent;
(10) Insurance Certificates and Policies. Certificates evidencing all
insurance policies required by this Agreement and the other Loan Documents and,
if requested by the Administrative Agent, copies of all such insurance
policies;
(11) Lien Searches. Lien searches in the name of each of the Loan
Parties (and in all names under which any of them has done business within the
last five years) in each jurisdiction where such Loan Party maintains an office
or has Property, showing no financing statements or other Lien instruments of
record affecting the Collateral except for Permitted Liens;
(12) Master Purchase Agreement. The Master Purchase Agreement shall have
been executed and delivered by all parties thereto, and the Administrative
Agent shall have received a photocopy of the Master Purchase Agreement as so
executed and delivered, certified by a Responsible Officer of the Borrower as
being a true and correct copy of such document as of the Restatement Effective
Date;
(13) Capital Contribution. Evidence, satisfactory to the Administrative
Agent, that prior to the Restatement Effective Date NCI shall have contributed
a minimum of $260,000,000 aggregate cash equity contributions to the Borrower
for constructing the Network and working capital purposes;
(14) Payment of Fees and Expenses. The Borrower shall have paid all fees
due on or before the Restatement Effective Date as specified in this Agreement
or in the Administrative Agent's Letter and all fees, costs and expenses of or
incurred by the Administrative Agent and its counsel to the extent billed on or
before the Restatement Effective Date and payable pursuant to this Agreement;
(15) Compliance with Laws. As of the Restatement Effective Date, the
Borrower and the other Loan Parties shall have complied in all material
respects with all Governmental Requirements necessary to consummate the
transactions contemplated by this Agreement and the other Loan Documents;
(16) No Prohibitions. No Governmental Requirement shall prohibit the
consummation of the transactions contemplated by this Agreement or any other
Loan Document, and no order,
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judgment or decree of any Governmental Authority or arbitrator shall, and no
litigation or other proceeding shall be pending or to the Borrower's knowledge,
threatened which would, enjoin, prohibit, restrain or otherwise adversely
affect in any material manner the consummation of the transactions contemplated
by this Agreement and the other Loan Documents or otherwise have a Material
Adverse Effect;
(17) Financial Statements. (i) Copies of each of the financial
statements referred to in Section 7.2 and (ii) copies of Projections;
(18) Opinions of Counsel. A favorable legal opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Loan Parties, in form and substance
satisfactory to the Administrative Agent, with respect to the Loan Parties and
with respect to the Loan Documents and a favorable legal opinion of regulatory
counsel to the Borrower and its Subsidiaries in form and substance satisfactory
to the Administrative Agent;
(19) Legal Matters and Loan Documents. All matters of a legal nature
relating to the Borrower and the Loan Documents shall be reasonably
satisfactory to the Administrative Agent and its counsel, and the
Administrative Agent shall have received all such other agreements, documents
and instruments, each in form and substance and executed and delivered by all
parties, as the Administrative Agent may have reasonably requested to receive;
(20) Business Plan. A copy of the Business Plan in form and substance
satisfactory to the Administrative Agent;
(21) Consents. To the extent not referred to in clause (h) preceding,
copies of all material consents necessary for the execution, delivery and
performance by the Loan Parties of the Loan Documents to which it is a party,
including, without limitation, any consents or waivers in connection with the
Master Purchase Agreement as the Administrative Agent may require and the grant
of a security interest in each Material Contract of each Loan Party (other than
agreements relating to other Debt of the Loan Parties), which consents shall be
certified by a Responsible Officer of the Borrower as true and correct copies
of such consents as of the Restatement Effective Date;
(22) Permits. Copies of all material Permits affecting the Borrower or
any of its Subsidiaries in connection with its businesses or any of the
Properties owned or leased by it and in connection with its businesses to be
conducted and Properties to be owned or leased as contemplated by the Business
Plan and evidence satisfactory to the Administrative Agent that the Borrower
and its Subsidiaries are able to conduct their businesses conducted and to be
conducted as contemplated by the Business Plan with the use of such Permits in
full force and effect; and the Administrative Agent shall be satisfied that (i)
the Borrower has the exclusive, unrestricted right to use each of such Permits
pursuant to license agreements or other agreements, documents or instruments in
form and substance reasonably satisfactory to the Administrative Agent and (ii)
the Borrower has complied with all initial and on-going conditions of the
issuance and use of all such Permits;
(23) Regulatory Approvals. Evidence satisfactory to the Administrative
Agent that (i) all filings, consents or approvals with or of Governmental
Authorities necessary to consummate the transactions contemplated by the Loan
Documents have been made and obtained, as applicable, and (ii) all filings and
registrations with, and notices to, the appropriate Governmental Authorities
which
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are required in order for the aggregate principal amount of all Credit
Extensions made under this Agreement to exceed $125 million and which are
identified on Schedule 6.1(w) (such approvals from such Governmental
Authorities, the "Required Additional Approvals") in the states listed on such
Schedule (such states, the "Affected States") have been made on or prior to the
Restatement Effective Date;
(24) No Material Adverse Change. As of the Restatement Effective Date,
(i) no material adverse change shall have occurred with respect to the
financial condition, results of operations, businesses, operations,
capitalization, indebtedness, liabilities, obligations, profitability or
prospects or Properties or of the general affairs or management of the Borrower
and its Restricted Subsidiaries, taken as a whole, or of the Borrower, in each
case since December 31, 1999, and (ii) the Administrative Agent shall be
satisfied that the financial performance of the Borrower and its Restricted
Subsidiaries and of the Borrower to the Restatement Effective Date is not
materially different from the financial projections for such Person(s) through
the Restatement Effective Date that were previously submitted to the
Administrative Agent;
(25) Solvency Certificate. A certificate as to the solvency of each of
NCH, NII, NCO, the Borrower and its other Restricted Subsidiaries, together
with contribution agreements between and among NCH, NII, NCO, the Borrower and
its other Restricted Subsidiaries;
(26) Payments under the Existing Credit Agreement. The Borrower shall
have paid in full all interest and fees accrued to the Restatement Effective
Date and not previously paid with respect to any loans or commitments under the
Existing Credit Agreement, other than accrued interest with respect to the
Existing Loans which constitute "Eurodollar Loans" as such term is defined in
the Existing Credit Agreement and as to which interest is, in accordance with
the Existing Credit Agreement and the last sentence of Section 2.5(b), due and
payable after the Restatement Effective Date;
(27) Closing Date Certificate. A certificate evidencing pro forma
compliance with the covenants in Section 9.16 after giving effect to the Credit
Extensions made on the Restatement Effective Date and certifying that as of the
Restatement Effective Date, after giving effect to the Credit Extensions made
on such date, and the application of the proceeds therefrom, no Default or
Event of Default would exist or result therefrom;
(28) Supplemental Agreement. The Supplemental Agreement executed by
each of the Loan Parties;
(29) Nortel Consent. Evidence satisfactory to the Administrative Agent
that any consent of Nortel Networks required in connection with this Agreement
and the other Loan Documents shall have been obtained and that the consent of
Nortel Networks shall not be required in connection with any future amendment,
modification, supplement, renewal, extension or restatement of this Agreement
or any other Loan Document; and
(30) Capital Stock of NII. Evidence satisfactory to the Administrative
Agent that all of the Capital Stock of NII is owned by the Borrower.
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The Borrower shall deliver, or cause to be delivered, to the Administrative
Agent sufficient counterparts of each agreement, document or instrument to be
received by the Administrative Agent under this Section 6.1 to permit the
Administrative Agent to distribute a copy of the same to each of the Lenders.
After the request of the Borrower, the Administrative Agent shall inform the
Borrower in writing as to the status of satisfaction of the conditions
precedent set forth in this Section 6.1.
Section 1.41 All Extensions of Credit. The obligation of each Lender to
make any Credit Extensions and the occurrence of the Restatement Effective Date
under this Agreement is subject to the satisfaction of each of the conditions
precedent set forth in Section 6.1 and each of the following additional
conditions precedent:
(1) No Default or Material Adverse Effect. No Default or Material
Adverse Effect shall have occurred and be continuing, or would result from such
Credit Extension and no event, development or circumstance shall have occurred
which could reasonably be expected to have a Material Adverse Effect;
(2) Representations and Warranties. All of the representations and
warranties of the Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct on and as of the date of such Credit
Extension, both before and after giving effect to such Credit Extension and the
application of the proceeds therefrom, with the same force and effect as if
such representations and warranties had been made on and as of such date unless
they relate solely to an earlier date;
(3) Use of Proceeds. The Borrower shall have certified to the
Administrative Agent that all proceeds of the Loans then being made by the
Lenders are, concurrently with the making of such Loans, being used by the
Borrower for the purposes specified in Section 2.11;
(4) Credit Extensions. After making the Credit Extensions requested on
the date of such Credit Extension, (i) with respect to any Revolving Loans or
Letters of Credit, the Total Utilization of Revolving Credit Commitments shall
not exceed the Revolving Credit Commitments then in effect, (ii) with respect
to any Term Loans, the aggregate principal amount of Term Loans made through
such date shall not exceed the Term Loan Commitments then in effect and (iii)
unless all Required Additional Approvals have been obtained and are in full
force and effect in the Affected States, the aggregate principal outstanding
amount of all Credit Extensions shall not exceed $125 million;
(5) Letters of Credit. On or before the date of issuance of any Letter
of Credit, the Administrative Agent shall have received all other information
required by the applicable Issuance Notice, and such other documents or
information as the Issuing Bank may reasonably require in connection with the
issuance of such Letter of Credit; and
(6) Additional Documentation. The Administrative Agent shall have
received such additional approvals, agreements, documents and instruments as
the Administrative Agent may reasonably request.
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Each notice of borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower that the conditions precedent set
forth in this Section 6.2 have been satisfied (both as of the date of such
notice and, unless the Borrower otherwise notifies the Administrative Agent
prior to the date of such borrowing, as of the date of such borrowing).
Section 1.42 Closing Certificates. The Borrower shall, concurrently with
the Restatement Effective Date (with respect to the conditions precedent set
forth in Sections 6.1 and 6.2), and concurrently with the date of the making of
each Credit Extension, execute and deliver to the Administrative Agent a
certificate in form and substance satisfactory to the Administrative Agent
certifying as to the satisfaction of each of the conditions precedent set forth
in this Article 6 which are required to be satisfied on or before such date
(without regard to whether such matters are, in fact, satisfactory to the
Administrative Agent to the extent that such satisfaction is required
hereunder).
ARTICLE 7
Representations and Warranties
The Borrower represents and warrants to the Agents and the Lenders that
the following statements are and, after giving effect to the funding of the
initial Credit Extensions on the Restatement Effective Date, will be true,
correct and complete:
Section 1.43 Existence. Each of the Loan Parties (a) is a corporation (or
other entity) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation (or organization), (b) has all
requisite power and authority to own its Properties and carry on its business
as now conducted, and (c) is qualified to do business in all jurisdictions in
which the nature of its business makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect. Each of the Loan
Parties has the power and authority and legal right to execute, deliver and
perform its obligations under the Loan Documents to which it is or may become a
party.
Section 1.44 Financial Statements.
(1) The Borrower has delivered to the Administrative Agent and the
Lenders audited financial statements of NCI and its Consolidated Subsidiaries
as of and for the fiscal year ended December 31, 1999 and financial statements
of NCI and its Consolidated Subsidiaries as of and for the fiscal quarter ended
March 31, 2000. All financial statements required to be delivered to the
Administrative Agent in accordance with this Agreement (including, without
limitation, those referred to in the immediately preceding sentence) are or
will be when delivered (as applicable) true and correct, have been or will be
(as applicable) prepared in accordance with GAAP and fairly and accurately
present or will fairly and accurately present (as applicable), on a
consolidated and consolidating (where applicable) basis, the financial
condition of NCI and the Borrower and their respective Consolidated
Subsidiaries (as applicable) of the respective dates indicated therein and the
results of operations for the respective periods indicated therein. There has
not been, as of the Restatement Effective Date, any material adverse change in
the financial condition, results of
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operations, businesses, operations or Properties of the Borrower and its
Restricted Subsidiaries, taken as a whole, or of the Borrower on an individual
basis, since December 31, 1999.
(2) The Business Plan and the Projections represent, as of the
Restatement Effective Date, the good faith estimate of the Borrower and its
senior management concerning the probable financial condition and performance
of the Borrower and its Consolidated Subsidiaries for the time period covered
thereunder based upon the assumptions believed to be reasonable at the time
made.
Section 1.45 Corporate Action; No Breach. The execution, delivery and
performance by each of the Loan Parties of the Loan Documents to which it is or
may become a party and compliance with the terms and provisions hereof and
thereof have been duly authorized by all requisite corporate action and do not
and will not (a) violate or conflict with, or result in a breach of, or require
any consent under (i) the articles or certificates of incorporation or bylaws
or other constitutional documents of such Loan Party, (ii) any Governmental
Requirement (including, without limitation, the Communications Act, any rule or
regulation of the FCC or any rule or regulation of any federal or state public
utility commission or other Governmental Authority) or any order, writ,
injunction or decree of any Governmental Authority or arbitrator, or (iii) any
material agreement, document or instrument to which any Loan Party is a party
or by which any Loan Party or any of its Property is bound or subject, or (b)
constitute a default under any such material agreement, document or instrument,
or result in the creation or imposition of any Lien (except a Lien in favor of
the Administrative Agent for and on behalf of the Agents, the Lenders and the
Lender Counterparties under the Security Documents as provided in Article 5)
upon any of the revenues or Property of any Loan Party.
Section 1.46 Operation of Business. Each of the Loan Parties (a)
possesses all material Permits (including, without limitation, rights-of-way),
franchises, and authorizations necessary or appropriate to conduct its
businesses substantially as now conducted and as to be conducted as
contemplated by the Business Plan, and (b) has complied with all initial and
on-going conditions to the issuance and use of all such Permits, franchises,
licenses and authorizations, except where failure to comply could not
reasonably be expected to have a Material Adverse Effect. None of such Persons
is in violation of any such material Permits, franchises, licenses or
authorizations which could be expected to result in any termination or
cessation thereof. All of such material Permits, franchises, licenses and
authorizations required by any Governmental Requirement (including, without
limitation, the Communications Act, any rule or regulation of the FCC or any
state public utility commission) or issued by any Governmental Authority as of
the Restatement Effective Date are summarized by category or type, as relevant
to the operation of the Borrower, on Schedule 7.4. As of the Restatement
Effective Date, there is not pending before the FCC or any other Governmental
Authority any action to cancel, revoke or terminate any License of any Loan
Party relating to any Telecommunications Assets or Telecommunications Business.
The Borrower and its Subsidiaries are entitled to elect to obtain
interconnection rights without negotiation or arbitration with any ILEC by
opting to accept the terms of any interconnection agreement which has been
approved and is on file with the telecommunications regulatory commission in
the jurisdiction in which such Loan Party desires to obtain interconnection
rights.
Section 1.47 Intellectual Property. The Intellectual Property owned or
used by each Loan Party in the operation of its business is set forth on
Schedule 7.5. Each of the Loan Parties owns or possesses (or will be licensed
or have the full right to use) all Intellectual Property which is
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necessary or appropriate for the operation of its businesses as presently
conducted and as proposed to be conducted, without any known conflict with the
rights of others. The consummation of the transactions contemplated by this
Agreement and the other Loan Documents will not materially alter or impair,
individually or in the aggregate, any of such rights of such Persons. No
product or service of any of the Loan Parties infringes upon any Intellectual
Property of any other Person, and no claim or litigation is pending or, to the
knowledge of the Borrower, threatened against any such Person contesting its
right to sell or otherwise use any product or material or service which could
reasonably be expected to have a Material Adverse Effect. There is no violation
by any Loan Party of any right of such Person with respect to any material
Intellectual Property owned or used by such Person.
Section 1.48 Litigation and Judgments. Each material action, suit,
investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of the Borrower, threatened against or
affecting any Loan Party, or that relates to any of the Loan Documents as of
the Restatement Effective Date, is disclosed on Schedule 7.6. None of such
actions, suits, investigations or proceedings could, if adversely determined,
reasonably be expected to have a Material Adverse Effect. Except as may be
disclosed on Schedule 7.6, as of the Restatement Effective Date, there are no
outstanding judgments against any Loan Party. No Loan Party has received any
opinion or memorandum or legal advice from legal counsel to the effect that it
is exposed to any liability or disadvantage that could reasonably be expected
to have a Material Adverse Effect.
Section 1.49 Rights in Properties; Liens. Except as disclosed on Schedule
7.7, none of the Loan Parties owns any right, title or interest in any real
Property. Each of the Loan Parties has good and marketable title to or, with
respect to leasehold interests, valid leasehold interests in all of its
material Properties and assets, real and personal, including the material
Properties, assets and leasehold interests reflected in the financial
statements described in Section 7.2(a), except where failure to have good and
marketable title or valid leasehold interests could not reasonably be expected
to have a Material Adverse Effect, and none of the Properties or leasehold
interests of any Loan Party is subject to any Lien, except Permitted Liens. No
Loan Party has granted or voluntarily allowed or permitted to exist any Lien to
or in favor of any Person (other than the Administrative Agent for and on
behalf of the Agents, the Lenders and the Lender Counterparties as security for
the Obligations) which attaches or relates to any of the Collateral and the
Liens on the Collateral in favor of the Administrative Agent are perfected,
first priority Liens subject only to Permitted Liens which are expressly
permitted to be equal or prior to the Liens of the Administrative Agent in the
definition of the term "Permitted Liens".
Section 1.50 Enforceability. The Loan Documents have been duly and
validly executed and delivered by each of the Loan Parties that is a party
thereto, and such Loan Documents constitute the legal, valid and binding
obligations of such Persons, enforceable against each such Person in accordance
with their respective terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity.
Section 1.51 Approvals. No authorization, approval or consent of, and no
filing or registration with or notice to, any Governmental Authority or third
party is or will be necessary for the execution, delivery or performance by any
Loan Party of any of the Loan Documents or any of the Material Contracts to
which it is or will be a party or for the validity or enforceability thereof,
except for such consents, approvals and filings as have been validly obtained
or made and are in full
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force and effect. The consummation of the transactions contemplated by the Loan
Documents and the Material Contracts does not require the consent or approval
of any other Person, except such consents and approvals (a) as have been
validly obtained and are in full force and effect or (b) as to which the
failure to obtain is not, individually or in the aggregate, material. No Loan
Party has failed to obtain any material consent, approval, license, Permit,
franchise or other authorization of any Governmental Authority (including the
FCC) necessary for the ownership or use of any of its Properties, conduct of
its business and performance of the Business Plan. All filings and
registrations with, and notices to, the appropriate Governmental Authorities in
the Affected States necessary to obtain the Required Additional Approvals have
been made on or prior to the Restatement Effective Date.
Section 1.52 Debt. As of the Restatement Effective Date, NCI and its
Subsidiaries do not have any Debt other than (a) the Obligations, and (b) the
Debt disclosed on Schedule 7.10 hereto.
Section 1.53 Taxes. Each of the Loan Parties has filed (a) all tax
returns (federal, state and local) and reports required to be filed including
all income, franchise, employment, Property and sales tax returns, and (b) all
other material tax returns and reports required to be filed except where
failure to file could not reasonably be expected to have a Material Adverse
Effect, and has paid all federal and other material taxes (shown on such
returns or reports to be due and payable), assessments, fees and other
governmental charges levied or imposed upon it or its Properties, income or
assets otherwise due and payable before they become delinquent, except those
which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been provided in accordance with GAAP and no
notice of Lien has been filed or recorded or, as to such Subsidiaries only,
except where failure to pay could not reasonably be expected to have a Material
Adverse Effect. There is no proposed tax assessment against any Loan Party
which could, if the assessment were made, reasonably be expected to have a
Material Adverse Effect.
Section 1.54 Margin Securities. None of the Loan Parties is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock.
Section 1.55 ERISA. None of the Loan Parties or any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Pension Plan
other than the Pension Plans identified on Schedule 7.13. Each Plan of the Loan
Parties is in compliance in all material respects with all applicable
provisions of ERISA and the Code. Neither a Reportable Event nor a Prohibited
Transaction has occurred within the last 60 months with respect to any Plan
that could reasonably be expected have a Material Adverse Effect. No notice of
intent to terminate a Pension Plan has been filed, nor has any Pension Plan
been terminated. No circumstances exist which constitute grounds entitling the
PBGC to institute proceedings to terminate, or appoint a trustee to administer,
a Pension Plan, nor has the PBGC instituted any such proceedings. None of the
Borrower, its Subsidiaries nor any ERISA Affiliate has completely or partially
withdrawn from a Multiemployer Plan. Each of the Borrower, its Subsidiaries and
NCH and each ERISA Affiliate have met their minimum funding requirements under
ERISA and the Code or with respect to all of their Pension Plans subject to
such requirements, and, as of the Restatement Effective Date except as
specified on
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Schedule 7.13, the present value of all vested benefits under each funded Plan
(exclusive of any Multiemployer Plan) does not and will not exceed the fair
market value of all such Plan assets allocable to such benefits, as determined
on the most recent valuation date of such Plan and in accordance with ERISA.
Neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has
incurred any liability to the PBGC under ERISA. No litigation is pending or, to
the Borrower's knowledge, threatened concerning or involving any Plan that
could reasonably be expected to have a Material Adverse Effect. There are no
unfunded or unreserved liabilities (on either a going-concern basis or a
wind-up basis) relating to any Plan that could, individually or in the
aggregate, have a Material Adverse Effect if the Borrower were required to fund
or reserve such liability in full. As of the Restatement Effective Date, no
funding waivers have been or will have been requested or granted under Section
412 of the Code with respect to any Plan. No unfunded or unreserved liability
for benefits under any Plan or Plans (exclusive of any Multiemployer Plans)
exceeds $1,000,000, with respect to any such Plan, or $2,000,000 with respect
to all such Plans, in the aggregate as of the Restatement Effective Date, on
either a going-concern basis or a wind-up basis.
Section 1.56 Disclosure. No written statement, information, report,
representation or warranty made by any Loan Party in any Loan Document or
furnished to any Agent or any Lender by or on behalf of any Loan Party in
connection with the Loan Documents or any transaction contemplated hereby or
thereby contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances in which made, taken as a whole, not misleading. There is no
fact known to the Borrower which has had a Material Adverse Effect, and there
is no fact known to the Borrower which might in the future have a Material
Adverse Effect except as may have been disclosed in writing to the
Administrative Agent.
Section 1.57 Subsidiaries. Schedule 7.15 attached hereto contains, as of
the Restatement Effective Date, complete and accurate information regarding (a)
the identities of each of the Subsidiaries of NCI, NCH and the Borrower, (b)
the number of issued and outstanding shares (or other units) of each class of
Capital Stock issued by each of such Subsidiaries and the identities of, and
number and percentage of each of such shares (or other units) held by, the
owner(s) (both of record and beneficially) of such Capital Stock, and (c) the
jurisdiction of incorporation or other organization of each such Subsidiary.
Section 1.58 Compliance with Laws. None of the Borrower, its Subsidiaries
or NCH is in violation of any Governmental Requirement, except for instances of
non-compliance that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 1.59 Investment Company Act. None of the Borrower, its
Subsidiaries or NCH is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 1.60 Public Utility Holding Company Act. None of the Borrower,
its Subsidiaries or NCH is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
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Section 1.61 Environmental Matters.
(1) Except for instances of noncompliance with or exceptions to any of
the following representations and warranties that could not have, individually
or in the aggregate, a Material Adverse Effect:
(1) The Borrower, each of its Subsidiaries and NCH and all of
their respective Properties and operations are in full compliance with
all Environmental Laws. The Borrower is not aware of, and neither the
Borrower nor any of its Subsidiaries has received written notice of, any
past, present or future conditions, events, activities, practices or
incidents which may interfere with or prevent the compliance or continued
compliance by the Borrower and its Subsidiaries with all Environmental
Laws;
(2) The Borrower, each of its Subsidiaries and NCH has obtained
all Permits that are required under applicable Environmental Laws, and
all such Permits are in good standing and all such Persons are in
compliance with all of the terms and conditions thereof;
(3) No Hazardous Materials exist on, about or within or have been
(to the knowledge of the Borrower) or are being used, generated, stored,
transported, disposed of on or Released from any of the Properties of the
Borrower, any of its Subsidiaries or NCH except in compliance with
applicable Environmental Laws. The use which the Borrower, its
Subsidiaries or NCH makes and intends to make its respective Properties
will not result in the use, generation, storage, transportation,
accumulation, disposal or Release of any Hazardous Material on, in or
from any of their currently owned Properties except in compliance with
applicable Environmental Laws; and
(4) There are no conditions or circumstances associated with the
currently owned or leased Properties or operations of the Borrower, any
of its Subsidiaries or NCH that could reasonably be expected to give rise
to any Environmental Liabilities or claims resulting in any Environmental
Liabilities.
(5) None of the Loan Parties nor any of their respective
currently or previously owned or leased Properties or operations are
subject to any outstanding or, to the knowledge of the Borrower,
threatened order from or agreement with any Governmental Authority or
other Person or subject to any judicial or administrative proceeding with
respect to (A) any failure to comply with Environmental Laws, (B) any
Remedial Action, or (C) any Environmental Liabilities;
(6) None of the Loan Parties is subject to, or has received
written notice of any claim from any Person alleging that it is or will
be subject to, any Environmental Liabilities;
(7) None of the Properties of any of the Loan Parties is a
treatment facility (except for the recycling of Hazardous Materials
generated on-site and the treatment of liquid wastes subject to the Clean
Water Act or other applicable Environmental Law for temporary storage of
Hazardous Materials generated on-site prior to their disposal off-site)
or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., regulations thereunder
or any comparable provision of state law. The Loan
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Parties are in compliance with all applicable financial responsibility
requirements of all Environmental Laws; and
(8) None of the Loan Parties has failed to file any notice
required under applicable Environmental Law reporting a Release.
(2) No Lien arising under any Environmental Law that could have,
individually or in the aggregate, a Material Adverse Effect has attached to any
Property or revenues of any of the Loan Parties.
Section 1.62 Labor Disputes and Acts of God. Neither the business nor the
Properties of any of the Loan Parties are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that is having or could reasonably be
expected to have a Material Adverse Effect.
Section 1.63 Material Contracts. Attached hereto as Schedule 7.21 is a
complete list, as of the Restatement Effective Date, of all Material Contracts
of the Loan Parties, other than the Loan Documents. All of the Material
Contracts are in full force and effect and neither the Borrower nor any of its
Restricted Subsidiaries is in default under any Material Contract and, to the
knowledge of the Borrower after due inquiry, no other Person that is a party
thereto is in default under any of the Material Contracts. None of the Material
Contracts prohibits the transactions contemplated under the Loan Documents.
Except as may be provided on Schedule 7.21, (a) each of such Material Contracts
has been transferred or assigned to, or is currently in the name of, a Loan
Party and (b) each of such Material Contracts (other than agreements relating
to other Debt of the Loan Parties) is assignable to the Administrative Agent as
collateral and is assignable by the Administrative Agent to a transferee if an
Event of Default were to occur. The Borrower has delivered to the
Administrative Agent a complete and current copy of each Material Contract
(other than purchase orders entered into in the ordinary course of business)
existing on the Restatement Effective Date.
Section 1.64 Bank Accounts. As of the Restatement Effective Date,
Schedule 7.22 sets forth the account numbers and location of all bank accounts
(including lock box and special deposit accounts) of the Borrower and its
Restricted Subsidiaries.
Section 1.65 Outstanding Securities. As of the Restatement Effective
Date, all outstanding securities (as defined in the Securities Act of 1933, as
amended, or any successor thereto, and the rules and regulations of the
Securities and Exchange Commission thereunder) of the Loan Parties have been
offered, issued, sold and delivered in compliance with all applicable
Governmental Requirements.
Section 1.66 Solvency. Each of the Loan Parties, as a separate entity, is
Solvent, both before and after giving effect to the Loans.
Section 1.67 Employee Matters. Except as set forth on Schedule 7.25, as
of the Restatement Effective Date (a) none of the Loan Parties nor any of their
employees is subject to any collective bargaining agreement, and (b) no
petition for certification or union election is pending with respect to the
employees of the Loan Parties, and no union or collective bargaining unit has
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sought such certification or recognition with respect to the employees of any
such Person. There are no strikes, slowdowns, work stoppages or controversies
pending or, to the best knowledge of the Borrower after due inquiry, threatened
against, any of the Loan Parties or its respective employees which could have,
either individually or in the aggregate, a Material Adverse Effect. Except as
set forth on Schedule 7.25, as of the Restatement Effective Date, none of the
Loan Parties is subject to an employment contract.
Section 1.68 Insurance. Schedule 7.26 sets forth a complete and accurate
description of all policies of insurance that will be in effect as of the
Restatement Effective Date for the Loan Parties and their Properties. To the
extent such policies have not been replaced, no notice of cancellation has been
received for such policies and the Borrower and the owner and holder of each
such policy are in compliance with all of the terms and conditions of such
policies.
Section 1.69 Common Enterprise. NCH and its Subsidiaries (including,
without limitation, the Borrower) are members of an affiliated group with each
other such Person and are collectively engaged in a common enterprise with one
another. Each of the Loan Parties expects to derive substantial benefit (and
may reasonably be expected to derive substantial benefit), directly and
indirectly, from the Loans contemplated by this Agreement, both in its separate
capacity and as a member of an affiliated and integrated group.
Section 1.70 No Material Adverse Change. Since December 31, 1999, no
event or change has occurred that has caused or evidences, either in any case
or in the aggregate, a Material Adverse Effect.
ARTICLE 8
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe, or cause to be performed and observed, the following
covenants:
Section 1.71 Reporting Requirements. The Borrower will furnish to the
Administrative Agent and each Lender:
(1) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each fiscal year of the Borrower, beginning
with the fiscal year ending December 31, 2000, (i) a copy of the form 10-K
(including all financial statements contained therein) filed by NCI as of the
end of and for such fiscal year then ended, together with audited consolidating
schedules for each of NCI and its Subsidiaries with respect to the financial
statements contained therein, (ii) if NCH has any Subordinated Indebtedness
outstanding, a copy of the unaudited consolidated balance sheet of NCH and its
Restricted Subsidiaries (including, without limitation, the Borrower) as at the
end of such fiscal year and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year, and (iii)
a copy of the unaudited consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income or operations, shareholders' equity and cash
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flows for such fiscal year, in each case (other than with respect to the
consolidating schedules) setting forth in comparative form the figures for the
previous fiscal year, and in the case of audited financial statements,
accompanied by the opinion of independent certified public accountants of
recognized standing reasonably acceptable to the Administrative Agent, which
opinion shall state that such consolidated financial statements present fairly
the financial position and results of operations for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and which
opinion shall not be qualified or limited because of a restricted or limited
examination by such accountant of any material portion of such Person's
records;
(2) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each of the quarters of each fiscal year
of the Borrower, beginning with the fiscal quarter ending June 30, 2000, (i) a
copy of the form 10-Q (including all financial statements contained therein)
filed by NCI as of the end of and for such fiscal quarter then ended, together
with unaudited consolidating schedules for each of NCI and its Subsidiaries
with respect to each of the financial statements contained therein, (ii) if NCH
has any Subordinated Indebtedness outstanding, a copy of the unaudited
consolidated balance sheet of NCH and its Restricted Subsidiaries as at the end
of such quarter and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the period commencing on
the first day and ending on the last day of such quarter, and (iii) a copy of
the unaudited consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as at the end of such quarter and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
in each case (other than with respect to the consolidating schedules) setting
forth in comparative form the quarterly operating budget figures for the
corresponding period of the preceding fiscal year, and certified by an
appropriate Responsible Officer of the Borrower as fairly presenting, in
accordance with GAAP, the financial position and the results of operations of
such Person and its Consolidated Subsidiaries (except for year-end adjustments
and financial statement footnotes required by GAAP);
(3) Compliance Certificate. Concurrently with the delivery of each of
the financial statements referred to in Sections 8.1(a) and 8.1(b), a
Compliance Certificate of a Responsible Officer of the Borrower substantially
in the form of Exhibit D hereto, appropriately completed, setting forth
reasonably detailed calculations demonstrating compliance with Section 9.16 and
stating that, to the best of such officer's knowledge, no Default has occurred
and is continuing or, if a Default has occurred and is continuing, stating the
nature thereof and the action that has been taken and is proposed to be taken
with respect thereto;
(4) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits and proceedings before any Governmental Authority
or arbitrator affecting any Loan Party which, if determined adversely to the
Borrower or any such Subsidiary, could reasonably be expected to have a
Material Adverse Effect;
(5) Notice of Default, etc.. As soon as possible and in any event
immediately upon (i) the Borrower's knowledge of the occurrence of any Default,
a written notice setting forth the details of such Default and the action that
the Borrower has taken and, if and to the extent known, proposes to take with
respect thereto and (ii) the failure of any Loan Party to make any required
payment of principal, premium (if any), interest or other payment of or with
respect to any
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Subordinated Debt, a written notice setting forth the details thereof and the
action that such Loan Party has taken or proposes to take with respect thereto;
(6) ERISA Plan Reports. Promptly after the filing or receipt thereof,
copies of all reports, including annual reports, and notices which the Borrower
or any of its ERISA Affiliates files with or receives from the PBGC or the U.S.
Department of Labor under ERISA with respect to a Pension Plan or for which the
Borrower has any potential liability; and as soon as possible and in any event
within five days after the Borrower knows or has reason to know that any
Pension Plan is insolvent, or that any Reportable Event or Prohibited
Transaction has occurred with respect to any Plan or Multiemployer Plan, or
that the PBGC, or the Borrower or any ERISA Affiliate has instituted or will
institute proceedings under ERISA to terminate or withdraw from or reorganize
any Pension Plan, a certificate of a Responsible Officer of the Borrower
setting forth the details as to such insolvency, withdrawal, Reportable Event,
Prohibited Transaction or termination and the action that the Borrower has
taken and proposes to take with respect thereto;
(7) Proxy Statements, Etc. As soon as available, one copy of each (if
any) financial statement, report, notice or proxy statement sent by NCI to its
stockholders or other security holders generally and one copy of each (if any)
regular, periodic or special report (including, without limitation, reports on
forms 10-K, 10-Q and 8-K), registration statement or prospectus filed by NCI
with any securities exchange or the Securities and Exchange Commission or any
successor agency;
(8) Insurance. Within 60 days prior to the end of each fiscal year of
the Borrower, a report in form and substance reasonably satisfactory to the
Administrative Agent summarizing all material insurance coverage maintained by
the Loan Parties as of the date of such report and all material insurance
coverage planned to be maintained by such Persons in the subsequent fiscal
year;
(9) Plan Information. From time to time, as reasonably requested by the
Administrative Agent or any Lender, such books, records and other documents
relating to any Pension Plan as the Administrative Agent or any Lender shall
specify; prior to any termination, partial termination or merger of a Pension
Plan covering employees of the Borrower or any ERISA Affiliate, or a transfer
of assets of a Pension Plan covering employees of the Borrower or any ERISA
Affiliate, written notification thereof; promptly upon NCI's or the Borrower's
receipt thereof, a copy of any determination letter or advisory opinion
regarding any Pension Plan received from any Governmental Authority and any
amendment or modification thereto as may be necessary as a condition to
obtaining a favorable determination letter or advisory opinion; and promptly
upon the occurrence thereof, written notification of any action requested by
any Governmental Authority to be taken as a condition to any such determination
letter or advisory opinion;
(10) Business Plan, etc. Not later than the earlier to occur of (i)
three days after approval of such update by the Board of Directors of the
Borrower or (ii) January 31st of each year, an update of the Business Plan in
reasonable detail generally consistent with the form and substance of the
Business Plan provided to the Administrative Agent on or before the Restatement
Effective Date, which update shall reflect the corresponding information for
the prior year, and, promptly upon the Borrower's preparation thereof, any
proposed amendment, modification or supplement to the Business Plan;
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(11) Management Letters. Promptly upon each receipt thereof by any Loan
Party, a copy of any management letter or other written report submitted to
such Loan Party by independent certified public accountants with respect to the
business, condition (financial or otherwise), operations, prospects or
Properties of any such Person;
(12) Reports to Other Creditors. Promptly after the furnishing thereof,
a copy of any financial or other material statement or report furnished by any
Loan Party to any other party pursuant to the terms of any indenture, loan,
stock purchase or credit or similar agreement and not otherwise required to be
furnished to the Administrative Agent and the Lenders pursuant to any other
clause of this Section 8.1;
(13) Notice of Material Adverse Effect. Within two Business Days after
the Borrower becomes aware thereof, written notice of any matter that could
reasonably be expected to have a Material Adverse Effect;
(14) Environmental Assessments and Notices. Promptly after the receipt
thereof, a copy of each environmental assessment (including any analysis
relating thereto) prepared with respect to any Property of any Loan Party and
each notice sent by any Governmental Authority relating to any failure or
alleged failure to comply with any Environmental Law or any liability with
respect thereto;
(15) Notices Under Material Contracts. Promptly after the receipt
thereof by the Borrower or any Subsidiary of the Borrower and promptly after
the delivery thereof by the Borrower or any Subsidiary of the Borrower, a copy
of each written notice delivered under any Material Contract, which notice (i)
relates to any alleged default under or noncompliance with or proposed
termination of such Material Contract or (ii) otherwise relates to any matter
under any Material Contract which could reasonably be expected to have a
Material Adverse Effect; and
(16) General Information. Promptly, such other business, financial,
corporate affairs and other similar information concerning the Borrower and/or
the Collateral as the Administrative Agent or any Lender may from time to time
reasonably request.
Section 1.72 Maintenance of Existence; Conduct of Business. Except as
expressly permitted in connection with mergers undertaken in accordance with
Section 9.3, the Borrower will, and will cause its Restricted Subsidiaries to,
preserve and maintain its corporate existence and all of its leases,
privileges, licenses, Permits, franchises, qualifications, Intellectual
Property, intangible Property and rights that are necessary in the ordinary
conduct of its business except to the extent that failure to so preserve and
maintain such could not reasonably be expected to have a Material Adverse
Effect. Without limiting the generality of the foregoing, each of the Loan
Parties will timely enter into such long-distance carrier and interconnection
agreements as are, at any time of determination, then necessary to the conduct
of its business in accordance with the Business Plan except to the extent that
the failure to do so could not reasonably be expected to cause a Material
Adverse Effect. The Borrower will, and will cause its Restricted Subsidiaries
to, conduct its business in an orderly and efficient manner in accordance with
good business practices and the Business Plan.
Section 1.73 Maintenance of Properties and Permits. The Borrower will,
and will cause its Restricted Subsidiaries to, maintain, keep and preserve all
of its Properties and Permits (including, without limitation, rights-of-way)
necessary in the proper conduct of its businesses in
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good repair, working order and condition (ordinary wear and tear excepted) and
make all necessary repairs, renewals and replacements and improvements thereof.
Section 1.74 Taxes and Claims. The Borrower will, and will cause its
Restricted Subsidiaries to, pay or discharge before becoming delinquent (a) all
taxes, levies, assessments and governmental charges imposed on it or its income
or profits or any of its Property and (b) all lawful claims for labor, material
and supplies, which, if unpaid, might become a Lien upon any of its Property;
provided, however, that neither the Borrower nor any of its Restricted
Subsidiaries shall be required to pay or discharge any tax, levy, assessment or
governmental charge, or claim for labor, material or supplies, whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings being diligently pursued and for which adequate reserves have been
established under GAAP.
Section 1.75 Insurance.
(1) The Borrower will, and will cause each of the other Loan Parties
to, keep insured by financially sound and reputable insurers all Property of a
character usually insured by responsible corporations engaged in the same or a
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations or entities and
carry such other insurance as is usually carried by such corporations or
entities, provided that in any event the Borrower and the other Loan Parties
will maintain:
(1) Property Insurance. Insurance against loss or damage covering
substantially all of the tangible real and personal Property (including,
without limitation, the Network and related equipment) and improvements
of such Person by reason of any Peril (as defined below) in such amounts
(subject to any deductibles as shall be satisfactory to the
Administrative Agent) as shall be reasonable and customary and sufficient
to avoid the insured named therein from becoming a co-insurer of any loss
under such policy, but in any event in such amounts as are reasonably
available as determined by the Borrower's independent insurance broker
reasonably acceptable to the Administrative Agent.
(2) Automobile Liability Insurance for Bodily Injury and Property
Damage. Insurance in respect of all vehicles (whether owned, hired or
rented by such Person) at any time located at, or used in connection
with, its Properties or operations against liabilities for bodily injury
and Property damage in such amounts as are then customary for vehicles
used in connection with similar Properties and businesses, but in any
event to the extent required by applicable law.
(3) Comprehensive General Liability Insurance. Insurance against
claims for bodily injury, death or Property damage occurring on, in or
about the Property (and adjoining streets, sidewalks and waterways) of
such Person, in such amounts as are then customary for Property similar
in use in the jurisdictions where such Properties are located.
(4) Worker's Compensation Insurance. Worker's compensation
insurance (including employers' liability insurance) to the extent
required by applicable law, which may be self-insurance to the extent
permitted by applicable law.
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Without limiting the generality of the foregoing, the Borrower shall purchase
and maintain in effect all-risk, property and casualty insurance (including
casualty insurance covering earthquake and flood damage) reasonably acceptable
and in amounts reasonably acceptable to the Administrative Agent covering all
equipment related to the Network and liability insurance covering the
operations of the Borrower and its Subsidiaries. Such insurance shall be
written by financially responsible companies selected by the Borrower and
having an A.M. Best Rating of "A-" or better and being in a financial size
category of "VI" or larger, or by other companies reasonably acceptable to the
Administrative Agent. Each policy referred to in this Section 8.5 shall name
the Administrative Agent (for the benefit of the Agents and the Lenders) as
loss payee (with respect to casualty insurance policies) and additional insured
(with respect to liability insurance policies) and shall provide that it will
not be canceled, amended or reduced except after not less than 30 days' prior
written notice to the Administrative Agent and shall also provide that the
interests of the Administrative Agent and the Lenders shall not be invalidated
or reduced by any act, omission or negligence of any Loan Party. The Borrower
will advise the Administrative Agent promptly of any policy cancellation,
reduction or amendment. For purposes hereof, the term "Peril" shall mean,
collectively, fire, lightning, flood, windstorm, hail, explosion, riot and
civil commotion, vandalism and malicious mischief, damage from aircraft,
vehicles and smoke and other perils covered by the "all-risk" endorsement then
in use in the jurisdictions where the Properties of the Loan Parties are
located.
(2) The Borrower will cause each Insurance Recovery (other than any
portion of an Insurance Recovery payable to a landlord to repair or replace
Property leased by the Borrower or any of its Subsidiaries) payable by any
insurance company to be deposited promptly with the Administrative Agent as
security for the Obligations if a Default has then occurred and is continuing,
and will promptly pay all Insurance Recoveries to the Administrative Agent for
application against the Obligations if and to the extent required in accordance
with Section 2.8(b).
(3) If a Default shall have occurred and be continuing, the Borrower
will cause all proceeds of insurance paid on account of the loss of or damage
to any Property of any Loan Party and all awards of compensation for any
Property of any Loan Party taken by condemnation or eminent domain to be
promptly paid directly to the Administrative Agent to be applied against or
held as security for the Obligations, at the election of the Administrative
Agent and the Required Lenders.
Section 1.76 Inspection Rights. The Borrower will, and will cause each of
the Loan Parties to, permit representatives and agents of the Administrative
Agent and each Lender, during normal business hours and upon reasonable notice
to the Borrower, to examine, copy and make extracts from its books and records,
to visit and inspect its Properties and to discuss its business, operations and
financial condition with its officers and independent certified public
accountants. The Borrower will authorize, and will cause each of the Loan
Parties to authorize, its accountants in writing (with a copy to the
Administrative Agent) to comply with this Section 8.6. The Administrative Agent
or its representatives may, at any time and from time to time at the Borrower's
expense, conduct field exams for such purposes as the Administrative Agent may
reasonably request, provided, however, that, prior to the occurrence of a
Default, no more than two such field exams during any fiscal year shall be at
the Borrowers expense.
Section 1.77 Keeping Books and Records. The Borrower will, and will cause
each of the Loan Parties to, maintain appropriate books of record and account
in accordance with GAAP
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consistently applied in which true, full and correct entries will be made of
all their respective dealings and business affairs. If any changes in
accounting principles from those used in the preparation of the financial
statements referenced in Section 8.1 are hereafter required or permitted by
GAAP and are adopted by the Borrower with the concurrence of its independent
certified public accountants and such changes in GAAP result in a change in the
method of calculation or the interpretation of any of the covenants, standards
or terms contained in this Agreement, the Borrower and the Required Lenders
agree to amend any such affected terms and provisions so as to reflect such
changes in GAAP with the result that the criteria for evaluating the financial
condition or performance of the Loan Parties shall be the same after such
changes in GAAP as if such changes in GAAP had not been made.
Section 1.78 Compliance with Laws. The Borrower will, and will cause each
of the Loan Parties to, comply with all applicable Governmental Requirements,
except for instances of noncompliance that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 1.79 Compliance with Agreements. The Borrower will, and will
cause each of the Loan Parties to, comply with all agreements, documents and
instruments binding on it or affecting its Properties or business, except for
instances of noncompliance that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 1.80 Further Assurances. The Borrower will execute and deliver
and will cause each of the Loan Parties to execute and deliver such further
agreements, documents and instruments (including, without limitation, financing
statements and amendments to financing statements specifying each item of the
Collateral and the serial number therefor) and take such further action as may
be requested by the Administrative Agent to carry out the terms and provisions
and purposes of this Agreement and the other Loan Documents, to evidence the
Obligations and to create, preserve, maintain and perfect the Liens of the
Administrative Agent for the benefit of the Agents, the Lenders and the Lender
Counterparties in and to the Collateral and the required priority of such
Liens.
Section 1.81 ERISA. The Borrower will, and will cause each of its ERISA
Affiliates to, comply with all minimum funding requirements and all other
material requirements of ERISA so as not to give rise to any material liability
thereunder.
Section 1.82 Interest Rate Protection. The Borrower shall, no later than
ninety (90) days following the Restatement Effective Date, maintain in full
force and effect one or more Interest Rate Protection Agreements for a term of
not less than three years and otherwise reasonably satisfactory to the
Administrative Agent with one or more counterparties reasonably acceptable to
the Administrative Agent rated in one of the two of the highest rating
categories of Standard & Poor's Rating Services (a Division of The McGraw Hill
Companies, Inc.) or ▇▇▇▇▇'▇ Investors Services, Inc. and otherwise reasonably
acceptable to the Administrative Agent that enable the Borrower to fix or place
a limit upon a rate of interest with respect to not less than an aggregate
notional amount (not less than zero) equal to (x) fifty percent (50%) of NCI's
and its Subsidiaries' Total Debt minus (y) the amount of such Total Debt with a
fixed interest rate; provided that for purposes of determining compliance with
this Section 8.12 at any time prior to the end of the term of the Interest Rate
Protection Agreements as in effect on the Restatement Effective Date that are
reasonably
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satisfactory to the Administrative Agent, such existing Interest Rate
Protection Agreements shall be deemed to satisfy the "not less than three
years" requirement set forth above.
Section 1.83 Miscellaneous Business Covenants.
(1) Non-Consolidation. The Borrower will, and will cause each other
Loan Party to: (i) maintain entity records and books of account separate from
those of any other entity which is an Affiliate of such Loan Party; (ii) not
commingle its funds or assets with those of any other entity which is an
Affiliate of such Loan Party; and (iii) provide that its board of directors or
other analogous governing body will hold all appropriate meetings to authorize
and approve such Person's entity actions, which meetings will be separate from
those of other Loan Parties.
(2) Ownership of Telecommunications Assets. The Borrower will cause,
and by its execution of the Supplemental Agreement and a Guaranty, NCI and NCH,
respectively, agree to cause, all Telecommunications Assets of NCI, NCH and
their respective Subsidiaries which are contemplated by or material to the
Business Plan to be owned by the Borrower and/or its Restricted Subsidiaries.
(3) Syndication of Credit Facilities. The Borrower and NCH shall
provide prompt assistance to the Agents and the Lenders in connection with
their respective efforts in syndicating the Loans. Such assistance will include
making senior officers of the Borrower and NCH available for meetings with
potential Lenders, providing, in a timely manner, such assistance as may be
reasonably requested by the Administrative Agent or its advisors, including
providing information to and responding to inquiries from prospective Lenders
with respect to the business, operations, Business Plan, results and other
matters relating to the business of NCH, the Borrower and the other Guarantors.
Section 1.84 Trade Accounts Payable. The Borrower will, and will cause
the other Loan Parties to, pay all trade accounts payable before the same
become more than 90 days past due, except (a) trade accounts payable contested
in good faith or (b) trade accounts payable in an aggregate amount not to
exceed $100,000 at any time outstanding and with respect to which no proceeding
to enforce collection has been commenced or, to the knowledge of the Borrower,
threatened.
Section 1.85 Delivery of Certain Amendments and Material Contracts. The
Borrower will, and will cause each other Loan Party to, promptly deliver to the
Administrative Agent any amendment, modification or supplement to (a) the
articles of incorporation, articles of organization, bylaws, regulations or
other constitutional documents of the Borrower or any other Loan Party, and (b)
any Material Contract to which it is a party or any License or Permit which it
possesses. The Borrower will, and will cause each of its Restricted
Subsidiaries to, (i) deliver to the Administrative Agent, promptly after such
Material Contract comes into existence, a true and correct copy of each
Material Contract which is not identified on Schedule 7.21, and (ii) use its
best efforts to ensure that such Material Contract is assignable to the
Administrative Agent as collateral and is assignable by the Administrative
Agent to a transferee if an Event of Default were to occur.
ARTICLE 9
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Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe, or cause to be performed and observed, the following
covenants:
Section 1.86 Debt. The Borrower will not, and will not permit NCI, NCH or
any Restricted Subsidiary of the Borrower to, incur, create, assume or permit
to exist any Debt, except:
(1) Debt to the Lenders pursuant to the Loan Documents;
(2) Subordinated Debt of NCH and/or NCI not to exceed $300,000,000 in
aggregate principal amount at any time outstanding; provided, the net proceeds
of such Subordinated Debt shall be contributed to the Borrower as common
equity; provided, further, that no cash payment of interest on such
Subordinated Debt shall be made (other than payments of interest made from the
proceeds of such Subordinated Debt deposited in an escrow account in accordance
with Section 9.4 below) until (i) the Borrower has reported two consecutive
fiscal quarters of positive EBITDA (as demonstrated in the Compliance
Certificates and the related financial statements delivered to the
Administrative Agent and the Lenders pursuant to Sections 8.1(a), (b) and (c))
and (ii) the Interest Coverage Ratio is at least equal to 1.00:1.00 on a pro
forma basis after giving effect to such payment; provided, further, that no
repayment of principal on such Subordinated Debt shall be made prior to the
Term Loan Maturity Date or the Revolving Credit Commitment Termination Date;
(3) intercompany Debt between or among the Borrower and any of its
Wholly-Owned Subsidiaries incurred in the ordinary course of business
(including, without limitation, Debt owed by the Wholly-Owned Subsidiaries of
the Borrower to the Borrower in connection with loans of proceeds of the Loans
made by the Borrower to such Wholly-Owned Subsidiaries, the proceeds of which
loans are used for the purposes permitted by Section 2.11), subject to the
following requirements: any and all of the Debt permitted pursuant to this
Section 9.1(c) shall be unsecured, shall be evidenced by instruments
satisfactory to the Administrative Agent which will be pledged to the
Administrative Agent for the benefit of the Agents, the Lenders and the Lender
Counterparties and shall be subordinated to the Obligations pursuant to a
subordination agreement in form and substance satisfactory to the
Administrative Agent, provided, however, that temporary advances made from time
to time in the ordinary course of business not to exceed $100,000 in aggregate
principal amount at any time owing by any Wholly-Owned Subsidiary of the
Borrower to the Borrower shall not be required to be so evidenced, pledged or
subordinated;
(4) unsecured Debt under the Interest Rate Protection Agreements
required to be maintained by Section 8.12, provided, however, that Debt
thereunder may be secured if such Debt constitutes a part of the Obligations;
(5) (i) existing Debt described on Schedule 7.10 hereto and renewals,
extensions or refinancings of such Debt which do not increase the outstanding
principal amount of such Debt and the terms and provisions of which are not
materially more onerous than the terms and conditions of such Debt on the
Restatement Effective Date, (ii) purchase money Debt (including Capital Lease
Obligations) secured by purchase money Liens, which Debt and Liens are
permitted under and meet all of the requirements of clause (g) of the
definition of Permitted Liens contained in Section 1.1,
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and (iii) additional unsecured Debt; provided, however, that the aggregate
principal amount of the Debt referred to in this Section 9.1(e) shall not
exceed $50,000,000 in aggregate amount at any time outstanding; and (1)
(6) liabilities of the Borrower in respect of unfunded vested benefits
under any Plan if and to the extent that the existence of such liabilities will
not constitute, cause or result in a Default or an Event of Default.
Section 1.87 Limitation on Liens. The Borrower will not, and will not
permit NCI, NCH or any Restricted Subsidiary of the Borrower to, incur, create,
assume or permit to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter acquired, except Permitted Liens and will not
enter into any negative pledge or similar arrangement in favor of other
creditors (other than such negative pledge or similar arrangement under
purchase money Debts and Capital Lease Obligations with respect to the assets
financed or secured thereby).
Section 1.88 Mergers, Etc. The Borrower will not, and will not permit its
Restricted Subsidiaries to, (a) become a party to a merger or consolidation,
(b) wind-up, dissolve or liquidate itself, or (c) purchase or acquire all or a
material or substantial part of the business or Properties of any Person;
provided, however, that (i) the Borrower or its Restricted Subsidiaries may
make Qualified Telecommunications Investments and other Investments permitted
pursuant to clause (i) of Section 9.5 and (ii) (A) any Restricted Subsidiary of
the Borrower may merge with and into the Borrower if the Borrower is the
surviving corporation and (B) any Restricted Subsidiary of the Borrower may
merge with and into any other Restricted Subsidiary of the Borrower, provided
that in the case of either (A) or (B) above, no consideration is given by the
surviving corporation in such merger other than the issuance of any Capital
Stock of the surviving corporation and such Capital Stock is pledged to the
Administrative Agent, on behalf of the Agents, the Lenders and the Lender
Counterparties, as security for the Obligations pursuant to Section 9.6. The
surviving corporation in any such merger shall ratify the Security Documents
and other obligations of the non-surviving corporation under the Loan
Documents.
Section 1.89 Restricted Payments. The Borrower will not, and will not
permit NCH or any Restricted Subsidiary of the Borrower to, make any Restricted
Payments, except:
(a) subject to the subordination provisions relating thereto, the
Borrower may make distributions to NCH and NCH may make distributions to NCI,
as the case may be, in order for such recipient to make regularly scheduled
payments of interest accrued on any Subordinated Debt permitted by Section 9.1
if and to the extent (but only if and to the extent) required by the express
terms of the Subordinated Debt Documents governing such Subordinated Debt,
which terms have been expressly approved in writing by the Administrative
Agent; provided, (i) no Default or Event of Default exists at the time of any
such Restricted Payment or would result from such payment and (ii) on a pro
forma basis after giving effect to such Restricted Payment, the Loan Parties
would have been in compliance with the financial covenants contained in Section
9.16 as of the end of the last fiscal quarter; provided further, however, that
notwithstanding clauses (i) and (ii) above the Borrower and NCH may make such
distributions from the proceeds of such Subordinated Debt which have been
deposited in an escrow account for such purpose;
(b) Subsidiaries of the Borrower may make Restricted Payments to the
Borrower; and
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(c) the Borrower and its Restricted Subsidiaries may make temporary
loans or advances to employees, officers and directors of the Loan Parties in
the ordinary course of business that do not exceed $1,000,000 in aggregate
amount at any time outstanding.
Section 1.90 Investments. The Borrower will not, and will not permit NCH
or any Restricted Subsidiary of the Borrower to, make or permit to remain
outstanding any advance, loan, extension of credit or capital contribution to
or investment in any Person, or purchase or own any stock, bonds, notes,
debentures or other securities of any Person, or be or become a joint venturer
with or partner of any Person (all such transactions being herein called
"Investments"), except:
(1) Investments in obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the Borrower or
another Loan Party;
(2) existing Investments identified on Schedule 9.5 hereto;
(3) Investments in securities issued or guaranteed by the U.S. or any
agency thereof with maturities of twenty-four (24) months or less from the date
of acquisition;
(4) Investments in certificates of deposit, time deposits, bankers'
acceptances and Eurodollar time deposits with maturities of twenty-four (24)
months or less from the date of acquisition, in each case with any Lender or
with any domestic commercial bank having a minimum long term credit rating of
double-A from Standard & Poor's Rating Services (a Division of The McGraw Hill
Companies, Inc.) or ▇▇▇▇▇'▇ Investors Services, Inc.;
(5) Investments in repurchase obligations with a term of not more than
seven days for securities of the types described in clause (c) preceding with
any Lender or with any domestic commercial bank having a minimum long term
credit rating of double-A from Standard & Poor's Rating Services (a Division of
The McGraw Hill Companies, Inc.) or ▇▇▇▇▇'▇ Investors Services, Inc.;
(6) Investments in commercial paper, medium term notes, bonds and
asset-backed securities of domestic issuers. Commercial paper must have a
credit rating of investment grade or better from Standard & Poor's Rating
Services (a Division of The McGraw Hill Companies, Inc.) or ▇▇▇▇▇'▇ Investors
Services, Inc., and medium term notes, bonds and asset-backed securities must
have a minimum long term credit rating of A from Standard & Poor's Rating
Services (a Division of The McGraw Hill Companies, Inc.) or ▇▇▇▇▇'▇ Investors
Services, Inc. and mature not more than twenty-four (24) months from the date
of acquisition;
(a) (i) Investments (other than intercompany Debt referred to in clause
(h) below) by the Borrower in its Restricted Subsidiaries existing on the
Restatement Effective Date and by NCH and the Borrower existing as of the
Restatement Effective Date or required to occur in accordance with this
Agreement, (ii) additional Investments by NCH in the Borrower, and (iii)
additional Investments by the Borrower in its Restricted Subsidiaries made
after the Restatement Effective Date in the ordinary course of business;
(7) intercompany Debt permitted pursuant to Section 9.1(c);
(8) Qualified Telecommunications Investments;
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(9) Interest Rate Protection Agreements permitted by Section 9.1;
(10) Capital contributions permitted pursuant to Section 9.8(c); and
(b) temporary loans or advances to employees, officers and directors of
the Loan Parties in the ordinary course of business that do not exceed
$1,000,000 at any time outstanding in aggregate amount;
provided, however, that no Investments may be made by the Borrower pursuant to
clauses (g), (h) or (i) preceding if a Default exists at the time of such
Investment or would result therefrom.
Section 1.91 Limitation on Issuance of Capital Stock of the Borrower. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
at any time issue, sell, assign or otherwise dispose of (a) any of its Capital
Stock, (b) any securities exchangeable for or convertible into or carrying any
rights to acquire any of its Capital Stock, or (c) any option, warrant or other
right to acquire any of its Capital Stock, in each case to any Person other
than NCH (with respect to Capital Stock of the Borrower) or the Borrower (with
respect to Capital Stock of the Restricted Subsidiaries of the Borrower). All
such Capital Stock, securities, options, warrants and other rights issued,
sold, assigned or disposed of shall be, and shall continue to be, subject to a
first priority Lien in favor of the Administrative Agent as security for the
payment and performance of the Obligations.
Section 1.92 Transactions with Affiliates. The Borrower will not, and
will not permit NCH or any Restricted Subsidiary of the Borrower to, enter into
any transaction, including, without limitation, the purchase, sale or exchange
of Property or the rendering of any service, with any Affiliate of the Borrower
except in the ordinary course of and pursuant to the reasonable requirements of
the Borrower's business and upon fair and reasonable terms no less favorable to
the Borrower, NCH or such Restricted Subsidiary, as the case may be, than would
be obtained in a comparable arms-length transaction with a Person not an
Affiliate of the Borrower; provided, however, that transactions between or
among the Borrower and its Affiliates may be on terms more favorable to the
Borrower than would be obtained in a comparable arms-length transaction with a
Person not an Affiliate of the Borrower. In addition to the foregoing, no
transactions between or among (a) Affiliates of the Borrower and (b) the
Borrower and its Subsidiaries relating to the purchases of equipment from any
such Affiliate or the provision of services by any such Affiliate for the
Network shall be permitted unless the same are purchased or provided at the
cost to such Affiliate.
Section 9.1 Disposition of Property. The Borrower will not, and will not
permit NCI, NCH or any Restricted Subsidiary of the Borrower to, sell, lease,
assign, transfer or otherwise dispose of any of its Property, except:
(1) dispositions of Inventory (other than equipment) in the ordinary
course of business;
(2) Asset Dispositions of Property, other than accounts and
Receivables, by the Borrower made in the ordinary course of business if each of
the following conditions have been satisfied: (i)(A) (1) the aggregate fair
value of all such Asset Dispositions made at any time during the term of this
Agreement shall not exceed $5,000,000 and (2) the Borrower receives fair
consideration for
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such assets, or (B) with respect to Asset Dispositions of Resale Access Lines,
(1) the aggregate fair value of all such Asset Dispositions made at any time
during the term of this Agreement shall not exceed $10,000,000 and (2) the
Borrower receives fair consideration for such Resale Access Lines, or (C) with
respect to Asset Dispositions to ILECs made in connection with the execution of
any agreement for Virtual Co-location, the aggregate fair value of all such
Asset Dispositions made at any time during the term of this Agreement shall not
exceed $1,000,000, and (ii) no Default exists at the time of or will result
from such Asset Disposition;
(3) Asset Dispositions of Property, other than equipment, accounts and
Receivables, by the Borrower to any Wholly-Owned Subsidiary of the Borrower if
each of the following conditions have been satisfied: (i) the assets sold,
disposed of or otherwise transferred to a Wholly-Owned Subsidiary of the
Borrower shall continue to be subject to a perfected, first priority Lien
(except for Permitted Liens, if any, which are expressly permitted by the Loan
Documents to have priority over the Liens in favor of the Administrative Agent)
in favor of the Agents, the Lenders and the Lender Counterparties, and (ii) no
Default exists at the time of or will result from such Asset Disposition; and
(4) dispositions of Property no longer used or useful in the ordinary
course of business, including, without limitation, dispositions of equipment
being exchanged or replaced with comparable or better equipment.
Section 9.2 Sale and Leaseback. The Borrower will not, and will not
permit NCI, NCH or any Restricted Subsidiary of the Borrower to, enter into any
arrangement with any Person pursuant to which it leases from such Person real
or personal Property that has been or is to be sold or transferred, directly or
indirectly, by it to such Person.
Section 1.93 Lines of Business. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, (a) engage in any line or lines
of business activity other than the construction, implementation and operation
of the Network and related activities reasonably incidental thereto and the
holding of Permits used in connection therewith and other telecommunications
businesses in the United States as described in and contemplated by the
Business Plan or (b) discontinue any line or lines of business which provide
material revenues to the Borrower or such Restricted Subsidiary in which it is
engaged on the Restatement Effective Date. The Borrower will not discontinue
its engagement in, and will continue to engage in, the Telecommunications
Business. The Borrower will not permit NCI or NCH to engage in (i) any
Telecommunications Business or (ii) in any other business other than the
ownership of the Capital Stock of its Restricted Subsidiaries and matters
incidental thereto, including the raising of capital.
Section 1.94 Environmental Protection. The Borrower will not, and will
not permit NCI, NCH or any Subsidiary of the Borrower to, (a) use (or permit
any tenant to use) any of its Properties for the handling, processing, storage,
transportation or disposal of any Hazardous Material except in compliance with
applicable Environmental Laws, (b) generate any Hazardous Material except in
compliance with applicable Environmental Laws, (c) conduct any activity that is
likely to cause a Release or threatened Release of any Hazardous Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or
use any of its Properties in any manner, that violates or is likely to violate
any Environmental Law or create any Environmental Liabilities for which the
Borrower or any of its Subsidiaries would be responsible, except for
circumstances or events
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described in clauses (a) through (d) preceding that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 1.95 Intercompany Transactions. Except as may be expressly
permitted or required by the Loan Documents and by the terms of any
Subordinated Debt, the Borrower will not, and will not permit any of its
Restricted Subsidiaries to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of (a) any of its Restricted Subsidiaries to (i) pay dividends or make
any other distribution to the Borrower or any of its Restricted Subsidiaries in
respect of such Restricted Subsidiary's Capital Stock or with respect to any
other interest or participation in, or measured by, its profits, (ii) pay any
indebtedness owed to the Borrower or any of its Restricted Subsidiaries, (iii)
make any loan or advance to the Borrower or any of its Restricted Subsidiaries,
or (iv) except for Property subject to purchase money Liens permitted in
accordance with this Agreement, sell, lease, transfer any of its Property to
the Borrower or any of its Restricted Subsidiaries, or (b) the Borrower or any
of its Restricted Subsidiaries to grant any Lien on any of its Properties to
secure the payment and performance of the Obligations.
Section 1.96 Management Fees. The Borrower and its Restricted
Subsidiaries shall not pay any management fees; provided, however, that
Restricted Subsidiaries of the Borrower may pay management fees to the Borrower
or other Restricted Subsidiaries of the Borrower.
Section 1.97 Modification of Other Agreements. The Borrower will not, and
will not permit NCI, NCH or any Restricted Subsidiary of the Borrower to,
consent to or implement any termination, amendment, modification, supplement or
waiver of (a) the certificate or articles of incorporation or bylaws or other
constitutional documents of the Borrower or any other Loan Party, (b) the
Business Plan or (c) any other Material Contract to which it is a party or any
Permit which it possesses; provided, however, that the Loan Parties may amend
or modify (i) the documents referred to in clause (a) preceding or the Business
Plan if and to the extent that such amendment or modification is not
substantive or material and could not be adverse to any Loan Party, any of the
Agents or the Lenders and (ii) the Material Contracts referred to in clause (b)
preceding if and to the extent that such amendment or modification could not
reasonably be expected to be materially adverse to any Loan Party or any of its
Subsidiaries or any of the Agents or any of the Lenders or, in the case of
Material Contracts involving other Debt of the Loan Parties, to the extent that
such amendment or modification does not result in such Loan Party being in
breach of any covenant or agreement contained in any Loan Document.
Section 1.98 ERISA. The Borrower will not, and will not permit NCI, NCH
or any Subsidiary of the Borrower to:
(1) allow, or take (or permit any ERISA Affiliate to take) any action
which would cause, any unfunded or unreserved liability for benefits under any
Plan (exclusive of any Multiemployer Plan) to exist or to be created that
exceeds $200,000 with respect to any such Plan or $500,000 with respect to all
such Plans in the aggregate on either a going concern or a wind-up basis; or
(2) with respect to any Multiemployer Plan, allow, or take (or permit
any ERISA Affiliate to take) any action which would cause, any unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or to
be created, either individually as to any such Plan or in
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the aggregate as to all such Plans, that could, upon any partial or complete
withdrawal from or termination of any such Multiemployer Plan or Plans, have a
Material Adverse Effect.
Section 1.99 Financial Covenants.
(1) Phase One. To be calculated quarterly on a consolidated basis for
each fiscal quarter occurring during the period from the Restatement Effective
Date to December 30, 2002:
(1) Total Debt to Total Capitalization. The Borrower and NCH will
not permit the ratio of (i) Total Debt of NCI and its Consolidated
Subsidiaries outstanding as of the last day of any fiscal quarter to (ii)
Total Capitalization of the Borrower and its Consolidated Subsidiaries on
such date, to exceed a ratio of 0.75:1.00
(2) Senior Debt to Total Capitalization. The Borrower and NCH
will not permit the ratio of (i) Senior Debt of the Borrower and its
Consolidated Subsidiaries outstanding as of the last day of any fiscal
quarter to (ii) Total Capitalization of the Borrower and its Consolidated
Subsidiaries on such date, to exceed a ratio of 0.45:1.00.
(3) Quarterly Minimum Revenue Levels. The Borrower and NCH will
not permit Gross Revenues of the Borrower and its Consolidated
Subsidiaries for any fiscal quarter as of the last day of such fiscal
quarter set forth below, beginning with the fiscal quarter ending June
30, 2000, to be less than the correlative amount indicated:
================================================
FISCAL QUARTER MINIMUM GROSS REVENUES
------------------------------------------------
06/30/00 $10,300,000
------------------------------------------------
09/30/00 $14,100,000
------------------------------------------------
12/31/00 $18,200,000
------------------------------------------------
03/31/01 $23,700,000
------------------------------------------------
06/30/01 $30,200,000
------------------------------------------------
09/30/01 $37,600,000
------------------------------------------------
12/31/01 $45,600,000
------------------------------------------------
03/31/02 $54,400,000
------------------------------------------------
06/30/02 $63,700,000
------------------------------------------------
09/30/02 $72,900,000
================================================
(4) Quarterly Maximum EBITDA Loss. The Borrower and NCH will not
permit EBITDA of the Borrower and its Consolidated Subsidiaries for any
fiscal quarter as of the
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last day of such fiscal quarter set forth below, beginning with the
fiscal quarter ending June 30, 2000, to be less than the correlative
amount indicated:
================================================
FISCAL QUARTER MINIMUM EBITDA
------------------------------------------------
06/30/00 ($16,300,000)
------------------------------------------------
09/30/00 ($15,400,000)
------------------------------------------------
12/31/00 ($13,700,000)
------------------------------------------------
03/31/01 ($10,300,000)
------------------------------------------------
06/30/01 ($8,500,000)
------------------------------------------------
09/30/01 ($8,300,000)
------------------------------------------------
12/31/01 ($8,600,000)
------------------------------------------------
03/31/02 ($200,000)
------------------------------------------------
06/30/02 $2,000,000
------------------------------------------------
09/30/02 $3,700,000
================================================
(5) Quarterly Minimum Revenue Equivalent Lines. The Borrower and
NCH will not permit Revenue Equivalent Lines of the Borrower and its
Consolidated Subsidiaries for any fiscal quarter as of the last day of
such fiscal quarter set forth below, beginning with the fiscal quarter
ending June 30, 2000, to be less than the correlative amount indicated:
================================================
MINIMUM REVENUE
FISCAL QUARTER EQUIVALENT LINES
------------------------------------------------
06/30/00 41,000
------------------------------------------------
09/30/00 51,800
------------------------------------------------
12/31/00 65,500
------------------------------------------------
03/31/01 79,700
------------------------------------------------
06/30/01 100,500
------------------------------------------------
09/30/01 122,800
------------------------------------------------
12/31/01 146,700
------------------------------------------------
03/31/02 174,300
------------------------------------------------
06/30/02 201,200
------------------------------------------------
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================================================
MINIMUM REVENUE
FISCAL QUARTER EQUIVALENT LINES
------------------------------------------------
09/30/02 227,900
================================================
(2) Phase Two. To be calculated quarterly on a consolidated basis for
each fiscal quarter commencing with the fiscal quarter ending on December 31,
2002:
(1) Total Debt to Annualized EBITDA. The Borrower and NCH will
not permit the ratio of (i) Total Debt of NCI and its Consolidated
Subsidiaries outstanding as of the last day of any fiscal quarter (which
last day occurs in any period set forth below) to (ii) Annualized EBITDA
of the Borrower and its Consolidated Subsidiaries for the fiscal quarter
ending on such date, beginning with the fiscal quarter ending December
31, 2002, to exceed the correlative ratio indicated:
================================================
MAXIMUM TOTAL DEBT TO
PERIOD ANNUALIZED EBITDA
------------------------------------------------
12/31/02 10.50:1.00
------------------------------------------------
01/01/03 - 03/31/03 7.00:1.00
------------------------------------------------
04/01/03 - 06/30/03 6.00:1.00
------------------------------------------------
07/01/03 - 12/31/03 5.00:1.00
------------------------------------------------
01/01/04 - 12/31/04 4.00:1.00
------------------------------------------------
01/01/05 and
Thereafter 3.00:1.00
================================================
(2) Pro Forma Debt Service Coverage Ratio. The Borrower and NCH
will not permit the Pro Forma Debt Service Coverage Ratio as of the last
day of any fiscal quarter (which last day occurs in any period set forth
below), beginning with the fiscal quarter ending March 31, 2003, to be
less than the correlative ratio indicated:
================================================
MINIMUM PRO FORMA DEBT
PERIOD SERVICE COVERAGE RATIO
------------------------------------------------
03/31/03 1.00:1.00
------------------------------------------------
04/01/03 - 12/31/03 1.25:1.00
------------------------------------------------
01/01/04 and
Thereafter 1.50:1.00
================================================
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(3) Interest Coverage Ratio. The Borrower and NCH will not permit the
Interest Coverage Ratio as of the last day of any fiscal quarter (which
last day occurs in any period set forth below), beginning with the fiscal
quarter ending December 31, 2002, to be less than the correlative ratio
indicated:
================================================
MINIMUM INTEREST
PERIOD COVERAGE RATIO
------------------------------------------------
12/31/02 1.00:1.00
------------------------------------------------
01/01/03 - 03/31/03 1.50:1.00
------------------------------------------------
04/01/03 - 12/31/03 2.00:1.00
------------------------------------------------
01/01/04 and
Thereafter 2.50:1.00
================================================
(3) Capital Expenditures. The Borrower and NCH will not permit
cumulative Capital Expenditures of the Borrower and its Consolidated
Subsidiaries for any fiscal year indicated below to exceed the corresponding
amount (the "Maximum Capital Expenditures Amount") set forth opposite such
fiscal year; provided, however, that the Maximum Capital Expenditures Amount
for any such fiscal year may be increased by an amount equal to the sum of (1)
the excess, if any, of such amount for the prior fiscal year (as adjusted in
accordance with this proviso) over the actual amount of Capital Expenditures
for such previous fiscal year, plus (2) the amount of net cash proceeds from
common equity contributions received by NCI from ▇▇▇▇▇▇▇▇ Communications, Inc.
(or another third party reasonably acceptable to the Administrative Agent) and
contributed to the Borrower as common equity since the Restatement Effective
Date provided that the aggregate amount of any and all increases made to the
Maximum Capital Expenditures Amount as a result of this clause (2) shall not
exceed $15,000,000 since the Restatement Effective Date, plus (3) the positive
difference, if any, between (A) the amount of net cash proceeds from common
equity offerings received by NCI and contributed to the Borrower as common
equity since the Restatement Effective Date and (B) the amount of such
contributions to the Borrower's common equity since the Restatement Effective
Date which are used to increase the amount of permitted acquisitions of
Qualified Telecommunications Investments in accordance with clause (iv)(y) of
the definition of Qualified Telecommunications Investments, provided that the
aggregate amount of any and all increases made to the Maximum Capital
Expenditures Amount as a result of this clause (3) shall not exceed
$100,000,000 since the Restatement Effective Date:
======================================
CAPITAL
FISCAL YEAR EXPENDITURES
--------------------------------------
2000 $127,600,000
--------------------------------------
2001 $80,100,000
--------------------------------------
2002 $75,100,000
--------------------------------------
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======================================
CAPITAL
FISCAL YEAR EXPENDITURES
--------------------------------------
2003 $109,200,000
--------------------------------------
2004 $64,800,000
--------------------------------------
2005 $72,500,000
--------------------------------------
2006 $38,700,000
--------------------------------------
2007 $41,100,000
--------------------------------------
2008 and each
Fiscal Year
Thereafter $37,200,000
======================================
Section 9.3 No Prepayment of Debt. The Borrower will not, and will not
permit NCI, NCH or any of its Restricted Subsidiaries to, directly or
indirectly, make any optional prepayment or distribution on account of, or
voluntarily purchase, acquire, redeem or retire, any Debt, prior to 30 days
before its originally stated maturity (or its stated maturity on the
Restatement Effective Date in the case of Debt outstanding on the Restatement
Effective Date), or in the case of interest, its stated due date, or directly
or indirectly become obligated to do any of the foregoing by amending the terms
thereof or otherwise, except for:
(4) prepayments of the Loans or other Obligations pursuant to or as
permitted by the Loan Documents;
(5) prepayments made with the proceeds of new Debt incurred for the
purpose of refinancing the Debt being prepaid, provided that (i) no portion of
such new Debt matures or is required to be prepaid, purchased or otherwise
retired earlier than the corresponding portion of the Debt being prepaid
(including as a result of any prepayment or redemption upon the occurrence of a
condition), (ii) such new Debt (A) is subordinated to the Obligations to at
least the same extent as the Debt being refinanced if such Debt is Subordinated
Debt or (B) is permitted in accordance with this Agreement, and (iii) no
Default or Event of Default then exists or would result from such prepayment or
refinancing; and (1)
(6) prepayments of trade payables incurred in the ordinary course of
the Borrower's or any Restricted Subsidiary's business and not overdue by more
than 120 days.
ARTICLE 10
Default
Section 1.100 Events of Default. Each of the following shall be deemed
an "Event of Default":
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(1) (i) The Borrower shall fail to pay, repay or prepay when due, any
amount of principal owing to the Administrative Agent or any Lender pursuant to
this Agreement or any other Loan Document, (ii) the Borrower shall fail to pay,
within two Business Days after the due date thereof, any interest, fee, expense
or other amount or other Obligation owing to the Administrative Agent or any
Lender pursuant to this Agreement or any other Loan Document, or (iii) the
Borrower shall fail to pay when due any amount payable to the Issuing Bank in
reimbursement of any drawing under a Letter of Credit.
(2) Any representation or warranty made or deemed made by or on behalf
of any Loan Party in any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this Agreement or
any other Loan Document shall be false, misleading or erroneous in any material
respect when made or deemed to have been made.
(3) Any Loan Party shall fail to perform, observe or comply with any
covenant, agreement or term contained in Sections 5.1, 8.1(e) or 8.2 or Article
9; any Loan Party shall fail to perform, observe or comply with any covenant,
agreement or term contained in Article 5 (other than Section 5.1) or Section
8.1 (other than Section 8.1(e)), 8.3, or 8.5, and such failure is not remedied
or waived within ten days after such failure commenced; or any Loan Party shall
fail to perform, observe or comply with any other covenant, agreement or term
contained in this Agreement or any other Loan Document (other than covenants to
pay the Obligations) and such failure is not remedied or waived within the
earlier to occur of 30 days after such failure commenced or, if a different
grace period is expressly made applicable in such other Loan Documents, such
applicable grace period.
(4) Any Loan Party ceases to be Solvent or shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due.
(5) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee, liquidator
or administrator of itself or of all or a substantial part of its Property,
(ii) admit in writing its inability to, or be generally unable to, pay its
debts as such debts become due, subject to any applicable grace periods, (iii)
make a general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the United States Bankruptcy Code (as now or hereafter in
effect, the "Bankruptcy Code"), (v) file a petition seeking to take advantage
of any other law providing for the relief of debtors or relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding
up, or composition or readjustment of debts, (vi) fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or other applicable
Governmental Requirement, (vii) dissolve, or (viii) take any corporate action
for the purpose of effecting any of the foregoing.
(6) A proceeding or case shall be commenced, without the application or
consent of any Loan Party, in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, arrangement, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, examiner, liquidator, administrator or the like of it or
of all or any substantial part of its Property, or (iii) similar relief in
respect of it, under any law providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement
or winding up, or composition or readjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or decree approving or
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ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief shall be
entered in an involuntary case under the Bankruptcy Code against any Loan Party
and shall continue unstayed and in effect for any period of 60 consecutive
days.
(7) Any Loan Party shall fail to discharge within a period of 30 days
after the commencement thereof any attachment, sequestration, forfeiture or
similar proceeding or proceedings involving an aggregate amount in excess of
$2,000,000 against any of its Properties.
(8) A final judgment or judgments for the payment of money in excess of
$2,000,000 in the aggregate shall be rendered by a court or courts against any
Loan Party on claims not covered by insurance and the same shall not be
discharged, bonded or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and any Loan Party shall not, within
said period of 30 days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal.
(9) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt of such Loan Party (other than the Obligations) having a
principal amount of at least $2,000,000 individually or at least $5,000,000 in
the aggregate, or the maturity of any such Debt shall have been accelerated, or
any such Debt shall have been required to be prepaid prior to the stated
maturity thereof, or any event shall have occurred (and shall not have been
waived or otherwise cured) that permits (or, with the giving of notice or lapse
of time or both, would permit) any holder or holders of such Debt or any Person
acting on behalf of such holder or holders to accelerate the maturity thereof
or require any such prepayment.
(10) This Agreement or any other Loan Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party or
any Loan Party shall deny that it has further liability or obligation under any
of the Loan Documents; or any Lien created or purported to be created by the
Loan Documents shall for any reason cease to be or fail to be a valid, first
priority perfected Lien upon any of the Collateral purported to be covered
thereby (except to the extent that such failure results from the Administrative
Agent's failure to file applicable continuation statements under the UCC).
(11) Any of the following events shall occur or exist with respect to
any Loan Party or any ERISA Affiliate: (i) any Prohibited Transaction involving
any Plan; (ii) any Reportable Event with respect to any Pension Plan; (iii) the
filing under Section 4041 of ERISA of a notice of intent to terminate any
Pension Plan or the termination of any Pension Plan; (iv) any event or
circumstance that could reasonably be expected to constitute grounds entitling
the PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Pension
Plan, or the institution by the PBGC of any such proceedings; (v) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived, shall exist with respect to any
Pension Plan; or (vi) complete or partial withdrawal under Section 4201 or 4204
of ERISA from a Multiemployer Plan or the reorganization, insolvency or
termination of any Pension Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, have subjected
or could in the reasonable opinion of Required Lenders subject any Loan Party
or any ERISA Affiliate to any tax, penalty or other
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liability to a Plan, a Multiemployer Plan, the PBGC or otherwise (or any
combination thereof) which in the aggregate exceed or could reasonably be
expected to exceed $2,000,000.
(12) If, at any time, the subordination provisions of any of the
Subordinated Debt Documents shall be invalidated or shall otherwise cease to be
in full force and effect.
(13) The occurrence of (i) a default (whether or not such term is used
or defined) under any Subordinated Debt Document, unless (A) such default has
been waived, cured or consented to in accordance with such documents, (B) such
default is not a payment default, (C) the maturity of the Debt affected thereby
has not been accelerated, (D) a blockage under such Subordinated Debt Document
has not been invoked, and (E) such waiver or consent is not made in connection
with any amendment or modification of any of the Subordinated Debt Documents or
in connection with any payment to the holders of any Subordinated Debt, (ii) a
payment default under any Subordinated Debt Document, (iii) an event of default
(whether or not such term is used or defined) under any Subordinated Debt
Document, or (iv) any acceleration of the maturity of any Subordinated Debt.
(14) The occurrence of any breach or default by the Borrower under the
Master Purchase Agreement (after giving effect to any grace or cure period
specified therein) which breach or default entitles Nortel Networks to exercise
a right or remedy under or in connection with the Master Purchase Agreement.
(15) If, at any time, any event or circumstance shall occur which gives
any holder of any Subordinated Debt the right to request or require any Loan
Party to redeem, purchase or prepay any Subordinated Debt.
(16) The occurrence of any Material Adverse Effect.
(17) The occurrence of any Change in Control.
(18) The occurrence of any "Event of Default" or "Change of Control" as
such terms are defined in any Subordinated Debt Document.
Section 1.101 Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may and, if directed by the Required
Lenders, the Administrative Agent shall do any one or more of the following:
(1) Acceleration. Declare (i) all outstanding principal of and accrued
and unpaid interest on the Loans and all other amounts payable by the Borrower
under the Loan Documents and (ii) an amount equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding
(regardless of whether any beneficiary under any such Letter of Credit shall
have presented, or shall be entitled at such time to present, the drafts or
other documents or certificates required to draw under such Letters of Credit)
to be immediately due and payable, and the same shall thereupon become
immediately due and payable, without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower;
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(2) Termination of Commitments. Immediately terminate each of the
Commitments and the obligation of the Issuing Bank to issue any Letter of
Credit without notice to the Borrower or any other Loan Party;
(3) Judgment. Reduce any claim to judgment;
(4) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
Administrative Agent for the benefit of the Agents, the Lenders and the Lender
Counterparties to secure payment and performance of the Obligations in
accordance with the terms of the Loan Documents;
(5) Security. Direct the Borrower to pay (and the Borrower hereby
agrees upon receipt of such notice to pay) to the Administrative Agent such
additional amounts of cash, to be held as security for the Borrower's
reimbursement Obligations in respect of Letters of Credit then outstanding,
equal to the Letter of Credit Usage at such time; or
(6) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of New York or any other jurisdiction, by any of the Loan
Documents, by equity or otherwise;
provided, however, that (i) upon the occurrence of an Event of Default under
Section 10.1(e) or Section 10.1(f), the Commitments of all of the Lenders shall
immediately and automatically terminate, and the outstanding principal of and
accrued and unpaid interest on the Loans and all other amounts payable by the
Borrower under the Loan Documents shall thereupon become immediately and
automatically due and payable, and (ii) upon the occurrence of an Event of
Default under clause (iv) of Section 10.1(m) or under Section 10.1(o), the
outstanding principal of and accrued and unpaid interest on the Loans and all
other amounts payable by the Borrower under the Loan Documents shall thereupon
become immediately and automatically due and payable, all (with respect to each
of clauses (i) and (ii) preceding) without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
Section 1.102 Performance by the Administrative Agent, etc. If the
Borrower shall fail to perform any covenant or agreement in accordance with the
terms of the Loan Documents, the Administrative Agent may perform or attempt to
perform, or may cause any Lender (with the consent of such Lender) to perform
or attempt to perform, such covenant or agreement on behalf of the Borrower. In
such event, the Borrower shall, at the request of the Administrative Agent,
promptly pay any amount expended by the Administrative Agent or the Lenders in
connection with such performance or attempted performance to the Administrative
Agent at its Principal Office, together with interest thereon at the applicable
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Administrative Agent nor any Lender shall
have any liability or responsibility for the performance of any obligation of
the Borrower or any other Person under this Agreement or any of the other Loan
Documents.
ARTICLE 11
The Agents
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Section 1.103 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Each Lender hereby irrevocably appoints and
authorizes TDSI to act as Lead Arranger and Book Manager hereunder and under
the other Loan Documents with such powers as are specifically delegated to TDSI
by the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Each Lender hereby
irrevocably appoints and authorizes RBC to act as Syndication Agent hereunder
and under the other Loan Documents with such powers as are specifically
delegated to RBC by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Each
Lender hereby irrevocably appoints and authorizes GSCP to act as a
Documentation Agent hereunder and under the other Loan Documents with such
powers as are specifically delegated to GSCP by the terms of this Agreement and
the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Each Lender hereby irrevocably appoints and authorizes
First Union Securities to act as a co-Documentation Agent hereunder and under
the other Loan Documents with such powers as are specifically delegated to
First Union Securities by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. No Agent or any of its Affiliates, officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be taken
by any of them hereunder or otherwise in connection with this Agreement or any
of the other Loan Documents except for its or their own gross negligence or
willful misconduct. Without limiting the generality of the preceding sentence,
each Agent (a) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Administrative
Agent, (b) shall have no duties or responsibilities except those expressly set
forth in this Agreement and the other Loan Documents, and shall not by reason
of this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender, (c) shall not be required to initiate any litigation or collection
proceedings hereunder or under any other Loan Document except, in the case of
the Administrative Agent, to the extent requested by the Required Lenders, (d)
shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or any other Loan
Document, or any certificate or other document referred to or provided for in,
or received by any of them under, this Agreement or any other Loan Document, or
for the value, validity, effectiveness, enforceability or sufficiency of this
Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or for any failure by any Person to perform any
of its obligations hereunder or thereunder, (e) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, and (f) shall incur no liability under or in respect of
any Loan Document by acting upon any notice, consent, certificate or other
instrument or writing reasonably believed by it to be genuine and signed or
sent by the proper party or parties. As to any matters not expressly provided
for by this Agreement, each Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Lenders, and such instructions of the Required Lenders
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders; provided, however, that the no Agent shall be required to take
any action which exposes such Agent to liability or which is contrary to this
Agreement or any other
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Loan Document or applicable law. No Agent shall be deemed to have any fiduciary
relationship with any Lender or any Loan Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against any Agent. Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement with
respect to any Agent is not intended to connote any fiduciary or other express
or implied obligation arising under agency doctrine of any applicable law;
instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship among independent
contracting parties. Each of the Lead Arranger, Book Manager, Syndication Agent
and each Documentation Agent, without consent of or notice to any party hereto,
may assign any and all of its rights or obligations hereunder to any of its
Affiliates. As of the date hereof, any respective obligations of TDSI, in its
capacity as Lead Arranger and Book Manager, RBC, in its capacity as Syndication
Agent, GSCP, in its capacity as a Documentation Agent, and First Union
Securities, in its capacity as a co-Documentation Agent, shall terminate.
Section 1.104 Rights of each Agent as a Lender. With respect to its
Commitments, the Loans made by it and the Note(s) issued to it, each Agent (and
any successor acting as such Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not performing the duties specified herein or in any
other Loan Documents, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, act as trustee under indentures of,
provide merchant banking services to, own securities of, and generally engage
in any kind of banking, trust or other business with, the Borrower or any of
its Affiliates and any other Person who may do business with or own securities
of the Borrower or any of its Affiliates, all as if it were not performing the
duties specified herein or in any other Loan Documents and without any duty to
account therefor to the Lenders.
Section 1.105 Defaults. No Agent shall not deemed to have knowledge or
notice of the occurrence of a Default (other than, in the case of the
Administrative Agent, the non-payment of principal of or interest on the Loans
or of commitment fees) unless it has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders (and shall give each Lender prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section 11.1) take
such action with respect to such Default as shall be 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 as it shall seem advisable and in the best interest of
the Lenders.
Section 1.106 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO INDEMNIFY
EACH AGENT FROM AND HOLD EACH AGENT HARMLESS AGAINST (TO THE EXTENT NOT
REIMBURSED UNDER SECTIONS 12.1 AND 12.2, BUT WITHOUT LIMITING THE OBLIGATIONS
OF THE BORROWER UNDER SECTIONS 12.1 AND 12.2), RATABLY IN ACCORDANCE WITH ITS
PRO RATA SHARE, ANY AND ALL LIABILITIES (INCLUDING, WITHOUT LIMITATION,
ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, DEFICIENCIES, SUITS,
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COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST SUCH
AGENT IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY SUCH AGENT UNDER OR IN RESPECT OF ANY OF
THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY
PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY SUCH AGENT'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS
INTENTION OF THE LENDERS THAT EACH AGENT SHALL BE INDEMNIFIED HEREUNDER FROM
AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH
AGENT (EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY SUCH AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITING ANY OTHER PROVISION OF THIS
SECTION 11.4, EACH LENDER AGREES TO REIMBURSE EACH AGENT PROMPTLY UPON DEMAND
FOR ITS PRO RATA SHARE OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING
ATTORNEYS' FEES) INCURRED BY SUCH AGENT IN CONNECTION WITH THE PREPARATION,
EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL
ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO
THE EXTENT THAT SUCH AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE
BORROWER.
Section 1.107 Independent Credit Decisions. Each Lender agrees that it
has independently and without reliance on any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower, NCI, NII and NCH and the Subsidiaries of
the Borrower, NCI, NII and NCH and its own decision to enter into this
Agreement and that it will, independently and without reliance upon any Agent
or any other Lender, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions
in taking or not taking action under this Agreement or any of the other Loan
Documents. No Agent shall be required to keep itself informed as to the
performance or observance by the Borrower (or any other Person) of this
Agreement or any other Loan Document or to inspect the Properties or books of
the Borrower (or any other Person). Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, no Agent
shall have any duty or responsibility to provide any Lender with any credit or
other financial information concerning the affairs, financial condition or
business of the Borrower (or any of its Affiliates) which may come into the
possession of such Agent or any of its Affiliates.
Section 1.108 Several Commitments. The Commitments and other obligations
of the Lenders under this Agreement are several. The default by any Lender in
making a Loan in accordance with any of its Commitments shall not relieve the
other Lenders of their obligations under this Agreement. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the
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amount which the defaulting Lender was required to advance hereunder. In no
event shall any Lender be required to advance an amount or amounts with respect
to any of the Loans which would in the aggregate exceed such Lender's
Commitment with respect to such Loans. No Lender shall be responsible for any
act or omission of any other Lender.
Section 1.109 Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent 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 will
have the right to appoint another Lender as a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank organized
under the laws of the U.S. or any state thereof or of a foreign country if
acting through its U.S. branch and having combined capital and surplus of at
least $100,000,000. Upon the acceptance of its appointment as successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all rights, powers, privileges, immunities
and duties of the resigning Administrative Agent, and the resigning
Administrative Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After any Administrative Agent's
resignation as Administrative Agent, the provisions of this Article 11 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was the Administrative Agent. Each Administrative
Agent (including each successor Administrative Agent) agrees that, so long as
it is acting as Administrative Agent under this Agreement, it shall be a Lender
under this Agreement.
Section 1.110 Security Documents and Guaranties.
(1) Administrative Agent as Agent under Security Documents and
Guaranties. Each Lender hereby further authorizes the Administrative Agent, on
behalf of and for the benefit of the Lenders, to be the agent for and
representative of Lenders with respect to the Guaranties, the Collateral and
the Security Documents. Subject to Section 12.11, without further written
consent or authorization from the Lenders, the Administrative Agent may execute
any documents or instruments necessary to (i) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted hereby or to the release of which the Required Lenders (or such other
Lenders as may be required to give such consent under Section 12.11) have
otherwise consented, (ii) release any Guarantor from the Guaranties if all of
the Capital Stock of such Guarantor or any of its successors in interest shall
be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions of this Agreement or with respect to
the release of which the Required Lenders (or such other Lenders as may be
required to give such consent under Section 12.11) have otherwise consented, or
(iii) release any Lien encumbering any cash and cash equivalents subject to a
Lien permitted by clause (i) of the definition of "Permitted Liens."
(2) Administrative Agent's Right to Realize on Collateral and Enforce
Guaranties. Anything contained in any of the Loan Documents to the contrary
notwithstanding, the Borrower, the Administrative Agent and each Lender hereby
agree that (i) no Lender shall have any right individually to realize upon any
of the Collateral or to enforce the Guaranties, it being understood
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and agreed that all powers, rights and remedies hereunder may be exercised
solely by the Administrative Agent, on behalf of Lenders in accordance with the
terms hereof, and (ii) in the event of a foreclosure by the Administrative
Agent on any of the Collateral pursuant to a public or private sale, the
Administrative Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and the Administrative Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless the Required Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any Collateral
payable by the Administrative Agent at such sale.
ARTICLE 12
Miscellaneous
Section 1.111 Expenses. The Borrower hereby agrees, on demand, to pay or
reimburse the Administrative Agent and each of the Lenders for paying: (a) all
reasonable out-of-pocket costs and expenses of the Administrative Agent accrued
in connection with the drafting, preparation, negotiation, execution and
delivery of the Loan Documents and in connection with any and all waivers,
amendments, modifications, renewals, extensions and supplements of or to the
Loan Documents, and the syndication of the Commitments and the Loans,
including, without limitation, the reasonable fees and expenses of legal
counsel (including all local counsel) for the Administrative Agent, (b) all
out-of-pocket costs and expenses of the Administrative Agent and the Lenders in
connection with any Default, the exercise of any right or remedy and the
enforcement of this Agreement or any other Loan Document or any term or
provision hereof or thereof, including, without limitation, the fees and
expenses of all legal counsel for the Administrative Agent and/or any Lender,
(c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any Governmental Authority in respect of this Agreement or
any of the other Loan Documents, (d) all costs, expenses, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any Lien contemplated by this Agreement or any other Loan
Document, and (e) all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent in connection with due diligence, computer services,
copying, appraisals, environmental audits, collateral audits, field exams,
insurance, consultants and search reports.
Section 1.112 INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY
EACH AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND
CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR
INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY,
PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY FORECLOSURE RIGHT OR OTHER
RIGHT OR REMEDY WHETHER OR NOT SUCH
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EXERCISE IS IN COMPLIANCE WITH LAWS AFFECTING OTHER PERSONS OR RESULTS IN
DAMAGES PAYABLE TO OTHER PERSONS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY
THE LOAN DOCUMENTS, (C) ANY BREACH BY THE BORROWER OF ANY MATERIAL
REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE OF ANY LOAN, (E) THE PRESENCE,
RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR CLEANUP OF ANY HAZARDOUS
MATERIAL LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF THE
BORROWER OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE
OR CLAIM IS THE DIRECT RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PERSON TO BE INDEMNIFIED, OR (F) ANY INVESTIGATION, LITIGATION OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING
ANY OF THE FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF
THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF
THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 12.2
SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT PREJUDICE TO THE SURVIVAL OF
ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, THE OBLIGATIONS OF THE BORROWER
UNDER THIS SECTION 12.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS AND OTHER
OBLIGATIONS AND TERMINATION OF THE COMMITMENTS.
Section 1.113 Limitation of Liability. None of any Agent, any Lender or
any Affiliate, officer, director, employee, attorney or agent thereof shall be
liable for any error of judgment or act done in good faith, or be otherwise
liable or responsible under any circumstances whatsoever (including such
Person's negligence), except for such Person's gross negligence or willful
misconduct. None of any Agent, any Lender or any Affiliate, officer, director,
employee, attorney or agent thereof shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to ▇▇▇ any of them
upon, any claim for any special, indirect, incidental or consequential damages
suffered or incurred by the Borrower or any Affiliate of the Borrower in
connection with, arising out of or in any way related to this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases and agrees not to ▇▇▇ any Agent or any Lender or any of their
respective Affiliates, officers, directors, employees, attorneys or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of or in any way related to this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 1.114 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by any Agent or any Lender shall
have the right to act exclusively in the interest of such Agents and such
Lenders and shall have no duty of disclosure, duty of loyalty,
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duty of care or other duty or obligation of any type or nature whatsoever to
the Borrower or any of its Affiliates or any other Person.
Section 1.115 No Fiduciary Relationship. The relationship between the
Borrower and each Lender is solely that of debtor and creditor, and neither any
Agent nor any Lender has any fiduciary or other special relationship with the
Borrower or any of its Affiliates, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between the
Borrower and any Lender, or such Affiliate and any Lender, to be other than
that of debtor and creditor. No joint venture or partnership is created by this
Agreement among the Lenders or among the Borrower or any of its Affiliates and
the Lenders.
Section 1.116 Equitable Relief. The Borrower recognizes that, in the
event it fails to pay, perform, observe or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the
Administrative Agent and the Lenders. The Borrower therefore agrees that the
Administrative Agent and the Lenders, if the Administrative Agent or the
Lenders so request, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.
Section 1.117 No Waiver; Cumulative Remedies. No failure on the part of
any Agent or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under this Agreement
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 1.118 Successors and Assigns.
(1) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The Borrower
may not assign or transfer any of its rights or obligations under this
Agreement or any other Loan Document without the prior written consent of the
Administrative Agent and the Lenders. Any Lender may sell participations in all
or a portion of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, all or a portion of its
Commitments and the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitments) shall remain unchanged, (ii)
such Lender shall remain solely responsible to the Borrower for the performance
of such obligations, (iii) such Lender shall remain the holder of its Notes for
all purposes of this Agreement, (iv) the Borrower shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (v) the
Lenders shall not grant any participation under which the participant shall
have the right to approve (or under which the consent of the participant must
be obtained prior to the Lenders being able to approve) any amendment or waiver
of this Agreement or the other Loan Documents, except to the extent that such
amendment or waiver (A) increases the participant's participation in the
Commitments over the amount then in effect, (B) reduces the interest rate
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or the amount of principal or fees applicable to
the Loans or Commitments in which such participant is participating, (C)
extends
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the final maturity of any Loan, Note or Letter of Credit (unless such Letter of
Credit is not extended beyond the Revolving Credit Termination Date) in which
such participant is participating, (D) releases all or substantially all of the
Collateral (except as provided for herein or in any other Loan Document) or the
Guaranties of the Obligations, or (E) consents to the assignment or transfer by
any Loan Party of any of its rights and obligations under any of the Loan
Documents.
(2) The Borrower and each of the Lenders agree that any Lender (the
"Assigning Lender") may at any time, with the consent of the Administrative
Agent and the Borrower (such consent not to be (x) unreasonably withheld or
delayed and (y) in the case of the Borrower, required at any time an Event of
Default shall have occurred and be continuing), assign to one or more Eligible
Assignees all or any part of its rights and/or obligations under this Agreement
and the other Loan Documents (including, without limitation, its Commitments
and/or Loans) (each an "Assignee"); provided, however, that (i) each such
assignment may be of a varying percentage of the Assigning Lender's rights
and/or obligations under this Agreement and the other Loan Documents and may
relate to some but not all of such rights and/or obligations, (ii) except in
the case of an assignment of all of a Lender's rights and obligations under
this Agreement and the other Loan Documents, the amount of the Commitment(s)
and/or Loans of the Assigning Lender being assigned pursuant to each assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $5,000,000 calculated based
upon the aggregate amount of the Commitment(s) and/or Loans assigned and (iii)
the parties to each such assignment shall execute and deliver to the
Administrative Agent for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with the Note subject to
such assignment, and a processing and recordation fee of $3,500. 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 Business Days after the execution thereof or such other date as
may be approved by the Administrative Agent, (1) the Assignee thereunder shall
be a party hereto as a "Lender" and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and under the Loan
Documents, and (2) the Assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of a
Lender's rights and obligations under the Loan Documents, such Lender shall
cease to be a party thereto, provided that such Lender's rights under Article
4, Section 12.1 and Section 12.2 accrued through the date of assignment shall
continue). The Borrower will provide full and prompt assistance to each Lender
as it may reasonably request from time to time in connection with such Lender's
efforts to assign its Commitments and/or Loans or sell any participation
interest therein. Such assistance shall include, without limitation, making
senior officers of the Borrower available for meetings with prospective Lenders
and participants and providing (in a timely manner) such assistance as may be
reasonably requested by such Lender and/or its advisors, including, without
limitation, providing information to and responding to inquiries from such
prospective Lenders and participants with respect to the businesses,
operations, business plan, financial condition and results of operations of the
Borrower and its Subsidiaries.
(3) 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 follows: (i) other than as
provided in such Assignment and Acceptance, such Assigning
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Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (ii) such Assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition or results of operations of the Borrower or
any of its Affiliates or the performance or observance by the Borrower or any
of its Affiliates of its obligations under the Loan Documents; (iii) such
Assignee confirms that it has received a copy of the Loan Documents, together
with copies of the financial statements referred to in Section 7.2 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such Assignee will, independently and without reliance upon the Administrative
Agent or such Assigning Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other
Loan Documents; (v) such Assignee confirms that it is an Eligible Assignee;
(vi) such Assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (vii) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
(4) The Administrative Agent shall maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent 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 under the Loan
Documents. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(5) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note(s) subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt written notice thereof to the Borrower. Within five Business
Days after its receipt of such notice, the Borrower, at its expense, shall
execute and deliver to the Administrative Agent in exchange for each
surrendered Note evidencing the Loans assigned, a new Note evidencing such
Loans payable to the order of such Eligible Assignee in an amount equal to such
Loans assigned to it and, if the Assigning Lender has retained any Loans, a new
Note evidencing each such Loans payable to the order of the Assigning Lender in
the amount of such Loans retained by it (each such promissory note shall
constitute a "Note" for purposes of the Loan Documents). Such new Notes shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit B-1 hereto, in the case of
Term Loan Notes, and Exhibit B-2 hereto, in the case of Revolving Loan Notes.
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(6) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 12.8, disclose
to the Assignee or participant or proposed Assignee or participant any
information relating to the Borrower or any of its Affiliates furnished to such
Lender by or on behalf of the Borrower or any of its Affiliates; provided that
each such actual or proposed Assignee or participant shall agree to be bound by
the provisions of Section 12.20.
(7) Any Lender may assign and pledge any Note held by it to any Federal
Reserve Bank or the U.S. Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or Federal Reserve Bank;
provided, however, that any payment made by the Borrower for the benefit of
such assigning and/or pledging Lender in accordance with the terms of the Loan
Documents shall satisfy the Borrower's obligations under the Loan Documents in
respect thereof to the extent of such payment. No such assignment and/or pledge
shall release the assigning and/or pledging Lender from its obligations
hereunder.
(8) The Borrower shall maintain, or cause to be maintained, a register
(the "Registered Note Register") (which, at the request of the Borrower (which
request the Borrower makes by the execution of this Agreement) shall be kept by
the Administrative Agent on behalf of the Borrower at no extra charge to the
Borrower at the address to which notices to the Administrative Agent are to be
sent hereunder) on which it shall enter the name of the registered owner of
each of the Loans which is evidenced by a Registered Note. Notwithstanding
anything to the contrary contained in this Section 12.8, a Registered Note and
the Loans evidenced thereby may be assigned or otherwise transferred in whole
or in part only by registration of such assignment or transfer of such
Registered Note and the Loans evidenced thereby on the Registered Note Register
(and each Registered Note shall expressly so provide). Any assignment or
transfer of all or part of such Loans and the Registered Note evidencing the
same shall be registered on the Registered Note Register only upon surrender
for registration of assignment or transfer of the Registered Note evidencing
such Loans, duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the registered noteholder thereof, and
thereupon one or more new Registered Notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to
the due presentment for registration of transfer of any Registered Note, the
Borrower and the Administrative Agent shall treat the Person in whose name such
Loans and the Registered Note(s) evidencing the same are registered as the
owner thereof for the purpose of receiving all payments thereon and for all
other purposes, notwithstanding any notice to the contrary. The Registered Note
Register shall be available for inspection by the Borrower and any Lender at
any reasonable time upon reasonable prior notice.
(9) The Borrower will not become a party to any loan agreement, credit
agreement or similar agreement which restricts or prohibits the right or
ability of any lender which is a party thereto to become a Lender under this
Agreement.
Section 1.119 Survival. All representations and warranties made or deemed
made in this Agreement or any other Loan Document or in any document, statement
or certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making of the Loans, and no investigation by any Agent or any Lender or any
closing shall affect the representations and warranties or the right of ant
Agent or any
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Lender to rely upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the Borrower under
Article 4 and Sections 12.1 and 12.2 shall survive repayment of the Loans and
the Reimbursement Obligations and the other Obligations.
Section 1.120 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, TERM SHEETS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Section 1.121 Amendments. No amendment or waiver of any provision of this
Agreement, the Notes or any other Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Lenders and the Borrower in writing, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, without the written consent of each Lender
that would be affected thereby, no amendment, waiver, modification,
termination, or consent shall be effective if the effect thereof would: (a)
increase any Commitment of such Lender (provided, no amendment, waiver,
modification or termination of, or consent to any departure from, any condition
precedent, covenant, Default or Event of Default shall constitute an increase
in any Commitment of any Lender) or subject such Lender to any additional
obligations; (b) reduce the principal amount of any Loan or any reimbursement
obligation in respect of any Letter of Credit or reduce the rate of interest on
any Loan (other than any waiver of any increase in the interest rate applicable
to any Loan pursuant to Section 2.5(d)) or reduce any fees or other amounts
payable hereunder; (c) postpone any date fixed for any scheduled payment (but
not any mandatory prepayment of principal) of principal of, or interest on, the
Loans or any fees or other amounts payable hereunder; (d) change the Commitment
Percentages or the aggregate unpaid principal amount of the Loans or the number
or interests of the Lenders which shall be required for the Lenders or any of
them to take any action under this Agreement; (e) change any provision
contained in Sections 3.2, 3.3 or 5.1 or this Section 12.11 or modify the
definitions of "Required Lenders"or "Pro Rata Share" (provided, with the
consent of the Required Lenders, additional extensions of credit pursuant
hereto may be included in the determination of "Required Lenders" or "Pro Rata
Share" on substantially the same basis as the Term Loan Commitments, the Term
Loans, the Revolving Credit Commitments and the Revolving Loans are included on
the Restatement Effective Date) contained in Section 1.1; (f) extend the stated
expiration date of any Letter of Credit beyond the Revolving Credit Commitment
Termination Date; (g) extend the expiration date of any Term Loan Commitment or
Revolving Credit Commitment; (h) consent to the assignment or transfer by any
Loan Party of any of its rights and obligations under any Loan Document; or (i)
except as expressly authorized by this Agreement, (x) release or otherwise
subordinate all or substantially all of the Collateral from any of the Liens
created by the Security Documents or (y) release all or substantially all of
the Guarantors from the Guaranties; and provided further, however, that no
amendment, waiver or consent relating to Sections 11.1, 11.2, 11.3, 11.4 or
11.5 shall require the agreement of the Borrower. Notwithstanding anything to
the contrary contained in this Section 12.11, no amendment, waiver or consent
shall be made with respect to (i)
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Article 11 hereof as the same applied to any Agent, or any other provision
hereof as the same applied to the rights or obligations of any Agent, in each
case without the prior written consent of such Agent, or (ii) any obligation of
Lenders relating to the purchase of participations in Letters of Credit as
provided in Section 2.2(e) without the written consent of the Administrative
Agent and of the Issuing Bank.
Section 1.122 Maximum Interest Rate.
(1) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the interest
rate (the "Contract Rate") for any Obligation shall exceed the Maximum Rate,
thereby causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(2) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Administrative Agent nor any Lender shall ever charge, receive,
take, collect, reserve or apply, as interest on the Obligations, any amount in
excess of the Maximum Rate. The parties hereto agree that any interest, charge,
fee, expense or other obligation provided for in this Agreement or in the other
Loan Documents which constitutes interest under applicable law shall be, ipso
facto and under any and all circumstances, limited or reduced to an amount
equal to the lesser of (i) the amount of such interest, charge, fee, expense or
other obligation that would be payable in the absence of this Section 12.12(b)
or (ii) an amount, which when added to all other interest payable under this
Agreement and the other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, the Administrative Agent or any Lender ever
contracts for, charges, receives, takes, collects, reserves or applies as
interest any amount in excess of the Maximum Rate, such amount which would be
deemed excessive interest shall be deemed a partial payment or prepayment of
principal of the Obligations and treated hereunder as such; and if the
Obligations, or applicable portions thereof, are paid in full, any remaining
excess shall promptly be paid to the Borrower. In determining whether the
interest paid or payable, under any specific contingency, exceeds the Maximum
Rate, the Borrower, the Administrative Agent and the Lenders shall, to the
maximum extent permitted by applicable law, (i) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, (ii) exclude
voluntary prepayments and the effects thereof, and (iii) amortize, prorate,
allocate and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the Obligations, or applicable
portions thereof, so that the interest rate does not exceed the Maximum Rate at
any time during the term of the Obligations; provided that, if the unpaid
principal balance is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the Maximum Rate, the Administrative Agent and/or
the Lenders, as appropriate, shall refund to the Borrower the amount of such
excess and, in such event, the Administrative Agent and the Lenders shall not
be subject to any penalties provided by any laws for contracting for, charging,
receiving, taking, collecting, reserving or applying interest in excess of the
Maximum Rate.
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Section 1.123 Notices. All notices and other communications provided for
in this Agreement and the other Loan Documents to which the Borrower is a party
shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof (or, with respect to a Lender that becomes a party to this Agreement
pursuant to an assignment made in accordance with Section 12.8, in the
Assignment and Acceptance executed by it); or, as to any party, at such other
address as shall be designated by such party in a notice to each other party
given in accordance with this Section 12.13. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid;
provided, however, that notices to any Agent shall be deemed given when
received by such Agent.
Section 1.124 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK AND EACH OF THE PARTIES HERETO CHOOSE THE LAWS OF THE STATE OF NEW YORK TO
GOVERN THIS AGREEMENT PURSUANT TO N.Y. GEN. OBLIG. LAW SECTION 5-1401 (CONSOL.
1995) AND APPLICABLE LAWS OF THE U.S. THE BORROWER HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF EACH OF (1) THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND (2) ANY NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SET FORTH UNDERNEATH
ITS SIGNATURE HERETO. THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORM.
Section 1.125 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 1.126 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 1.127 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
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Section 1.128 Construction. The Borrower, the each Agent and each Lender
acknowledges that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the parties hereto.
Section 1.129 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 1.130 Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans and/or the Letters of Credit; provided that nothing
herein shall prevent any Lender from disclosing such information (a) to any
other Lender, (b) to any Person if disclosure to such Person is reasonably
incidental to the administration of the Loans and/or the Letters of Credit, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority having jurisdiction over such
Lender, (e) which has been publicly disclosed other than in violation of these
provisions by such Lender, (f) in connection with any litigation to which any
Agent, any Lender or their respective Affiliates may be a party, (g) to the
extent reasonably required in connection with the exercise of any right or
remedy under the Loan Documents, (h) to such Lender's legal counsel,
independent auditors and affiliates who agree to the provisions of this Section
12.20, and (i) to any actual or proposed participant or Assignee of all or part
of its rights hereunder, so long as such actual or proposed participant or
Assignee agrees to be bound by the provisions of this Section 12.20.
SECTION 1.131 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE BORROWER, ANY AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 1.132 Approvals and Consent. Except as may be expressly provided
to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement of the other Loan Documents
where the approval, consent or exercise of judgment of any Agent or any Lender
is requested or required, (a) the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion
of such Agent or such Lender, respectively, and such Agent and such Lender
shall not, for any reason or to any extent, be required to grant such approval
or consent or to exercise such judgment in any particular manner, regardless of
the reasonableness of the request or the action or judgment of such Agent or
such Lender, and (b) no approval or consent of any Agent or any Lender shall in
any event be effective unless the same
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shall be in writing and the same shall be effective only in the specific
instance and for the specific purpose for which given.
Section 1.133 Service of Process. The Borrower irrevocably consents to
the service of process by the mailing thereof by the Administrative Agent, any
other Agent or the Required Lenders by registered or certified mail, postage
prepaid, to the Borrower at its address listed on the signature pages hereof.
Nothing in this Section 12.23 shall affect the right of the Administrative
Agent, any other Agent or the Lenders to serve legal process in any other
manner permitted by law or affect the right of the Administrative Agent, any
other Agent or any Lender to bring any action or proceeding against the
Borrower or its Property in the court of any jurisdiction.
Section 1.134 Amendment and Restatement. This Agreement shall become
effective on the date (the "Restatement Effective Date") on which (i) the
Borrower, the Administrative Agent, each other Agent and each of the Lenders
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same (including by way of facsimile
transmission) to the satisfaction of the Administrative Agent and (ii) the
conditions contained in Article 6 are met to the satisfaction of the
Administrative Agent and the Required Lenders (determined immediately after the
occurrence of the Restatement Effective Date). Unless the Administrative Agent
has received actual notice from any Lender that the conditions contained in
Article 6 have not been met to its satisfaction, upon the satisfaction of the
condition described in clause (i) of the immediately preceding sentence and
upon the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Restatement Effective Date shall have been deemed to have occurred,
regardless of any subsequent determination that one or more of the conditions
thereto had not been met (although the occurrence of the Restatement Effective
Date shall not release the Borrower from any liability for failure to satisfy
one or more of the applicable conditions contained in Article 6 to the extent
such condition was not otherwise waived in writing in accordance with the terms
of this Agreement). Effective as of the Restatement Effective Date, this
Agreement shall constitute an amendment and restatement of all, but not an
extinguishment, discharge, satisfaction or novation of any, indebtedness,
liabilities and/or obligations (including, without limitation, the Obligations)
of the Loan Parties under the Existing Credit Agreement.
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113
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
NET2000 COMMUNICATIONS GROUP, INC.
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
Address for Notices:
--------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
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114
ADMINISTRATIVE AGENT:
--------------------
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent, Issuing Bank and
Lender
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
108
115
LEAD ARRANGER AND BOOK MANAGER:
------------------------------
TD SECURITIES (USA) INC.,
as Lead Arranger and Book Manager,
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Small
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
109
116
SYNDICATION AGENT:
-----------------
ROYAL BANK OF CANADA,
as Syndication Agent and Lender
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
Royal Bank of Canada
Grand Cayman (North America No. 1) Branch
C/o New York Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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DOCUMENTATION AGENTS:
--------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Documentation Agent and Lender
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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FIRST UNION SECURITIES, INC.
as Co-Documentation Agent,
By:
------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
as a Lender
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
Attention:
Telecopy No.:
Telephone No.:
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119
ISSUING BANK:
------------
THE TORONTO DOMINION BANK,
as Issuing Bank and Lender
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDERS:
-------
[ ]
---------------------------------
By:
------------------------------------
Name:
Title:
Address for Notices:
--------------------
114
121
APPENDIX A-1 TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
TERM LOAN COMMITMENTS
===============================================================================
PRO
LENDER TERM LOAN COMMITMENT RATA SHARE
-------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc. $45,000,000 45.0%
-------------------------------------------------------------------------------
Royal Bank of Canada $20,000,000 20.0%
-------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. $15,000,000 15.0%
-------------------------------------------------------------------------------
First Union National Bank $15,000,000 15.0%
-------------------------------------------------------------------------------
IBM Credit Corporation $5,000,000 5.0%
-------------------------------------------------------------------------------
TOTAL $100,000,000 100%
===============================================================================
APPENDIX A-1-1
122
APPENDIX A-2 TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
REVOLVING CREDIT COMMITMENTS
===============================================================================
LENDER REVOLVING CREDIT COMMITMENT PRO RATA SHARE
-------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc. $40,000,000 40.0%
-------------------------------------------------------------------------------
Royal Bank of Canada $20,000,000 20.0%
-------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. $15,000,000 15.0%
-------------------------------------------------------------------------------
First Union National Bank $15,000,000 15.0%
-------------------------------------------------------------------------------
IBM Credit Corporation $5,000,000 5.0%
-------------------------------------------------------------------------------
RFC Capital Corporation $5,000,000 5.0%
-------------------------------------------------------------------------------
TOTAL $100,000,000 100%
===============================================================================
APPENDIX A-2-1