Exhibit 10.4
$184,400,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 6, 2003
Among
ITC/\DELTACOM, INC.
as Parent
INTERSTATE FIBERNET, INC.
as Borrower
THE SUBSIDIARY GUARANTORS NAMED HEREIN
as Subsidiary Guarantors
THE LENDERS NAMED HEREIN
as Lender Parties
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Administrative Agent and
Collateral Agent
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..................................3
SECTION 1.01. Certain Defined Terms.......................................3
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions..............................................32
SECTION 1.03. Accounting Terms...........................................32
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES................................32
SECTION 2.01. Restructuring..............................................32
SECTION 2.02. Intentionally Omitted......................................32
SECTION 2.03. Repayment of Advances......................................32
SECTION 2.04. Intentionally omitted......................................34
SECTION 2.05. Prepayments................................................34
SECTION 2.06. Interest...................................................36
SECTION 2.07. Fees.......................................................37
SECTION 2.08. Conversion of Advances.....................................37
SECTION 2.09. Increased Costs, Etc.......................................38
SECTION 2.10. Payments and Computations..................................39
SECTION 2.11. Taxes......................................................41
SECTION 2.12. Sharing of Payments, Etc...................................43
SECTION 2.13. Use of Proceeds............................................44
SECTION 2.14. Defaulting Lenders.........................................44
SECTION 2.15. Evidence of Debt; Register.................................46
ARTICLE III CONDITIONS OF LENDING............................................47
SECTION 3.01. Conditions Precedent to the Amendment Effective Date.......47
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................52
SECTION 4.01. Representations and Warranties of the Borrower.............52
ARTICLE V COVENANTS OF THE PARENT..........................................59
SECTION 5.01. Affirmative Covenants......................................59
SECTION 5.02. Negative Covenants.........................................66
SECTION 5.03. Reporting Requirements.....................................78
ARTICLE VI EVENTS OF DEFAULT................................................83
SECTION 6.01. Events of Default..........................................83
ARTICLE VII GUARANTY.........................................................86
SECTION 7.01. Guaranty; Limitation of Liability..........................86
SECTION 7.02. Guaranty Absolute..........................................87
SECTION 7.03. Waivers and Acknowledgments................................88
SECTION 7.04. Subrogation................................................89
SECTION 7.05. Guaranty Supplements.......................................90
i
SECTION 7.06. Subordination..............................................90
SECTION 7.07. Continuing Guaranty; Assignments...........................91
SECTION 7.08. Release of Guarantor.......................................91
ARTICLE VIII THE AGENT........................................................92
SECTION 8.01. Authorization and Action...................................92
SECTION 8.02. Agents' Reliance, Etc......................................92
SECTION 8.03. ▇▇▇▇▇ Fargo and Affiliates.................................92
SECTION 8.04. Lender Party Credit Decision...............................93
SECTION 8.05. Indemnification............................................93
SECTION 8.06. Successor Agents...........................................94
SECTION 8.07. Appointment of Subagents...................................94
ARTICLE IX MISCELLANEOUS....................................................95
SECTION 9.01. Amendments, Etc............................................95
SECTION 9.02. Notices, Etc...............................................95
SECTION 9.03. No Waiver; Remedies........................................96
SECTION 9.04. Costs and Expenses.........................................96
SECTION 9.05. Right of Set-off...........................................98
SECTION 9.06. Binding Effect.............................................98
SECTION 9.07. Assignments and Participations.............................98
SECTION 9.08. Execution in Counterparts.................................101
SECTION 9.09. Confidentiality...........................................101
SECTION 9.10. Release of Collateral.....................................101
SECTION 9.11. Jurisdiction, Etc.........................................101
SECTION 9.12. Governing Law.............................................102
SECTION 9.13. Waiver of Jury Trial......................................102
SECTION 9.14. Waiver and Consent........................................102
SECTION 9.15. Release of the Agent and the Lenders......................102
SECTION 9.16. FS Multimedia, Inc........................................103
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Subsidiary Guarantors
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(f) - Disclosed Litigation
Schedule 4.01(p) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(r) - Open Years; Unpaid Tax Liabilities; Adjusted Tax Bases
Schedule 4.01(u) - Surviving Debt
Schedule 4.01(v) - Liens
Schedule 4.01(w) - Owned Real Property
Schedule 4.01(x) - Leased Real Property
Schedule 4.01(y) - Investments
ii
Schedule 4.01(z) - Intellectual Property
Schedule 4.01(aa) - Material Contracts
EXHIBITS
Exhibit A-1 - Form of ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note
Exhibit A-2 - Form of ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note
Exhibit A-3 - Form of ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note
Exhibit B - Intentionally Omitted
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Intercreditor and Subordination Agreement
Exhibit F - Form of Solvency Certificate
Exhibit G - Form of Opinion of Counsel to the Loan Parties
Exhibit H - Intentionally Omitted
Exhibit I - Form of Guaranty Supplement
iii
Exhibit 10.6
Execution Copy
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 6,
2003 (this "Agreement"), among ITC/\DeltaCom, Inc., a Delaware corporation (the
"Parent"), Interstate FiberNet, Inc., a Delaware corporation (the "Borrower"),
the subsidiary guarantors listed on the signature page hereof, the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof (the "Lender Parties"), ▇▇▇▇▇ Fargo Bank Minnesota, National
Association ("▇▇▇▇▇ Fargo"), as administrative agent (together with any
successor administrative agent appointed pursuant to Article VIII, the
"Administrative Agent") for the Lender Parties, and as collateral agent
(together with any successor collateral agent appointed pursuant to Article
VIII, the "Collateral Agent" and, together with the Administrative Agent, the
"Agents").
RECITALS:
WHEREAS, pursuant to the Credit Agreement, dated as of April 5, 2000,
as amended (the "Original ITCD Credit Agreement"), the Lender Parties lent to
the Borrower $160,000,000 consisting of $100,000,000 under the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Facility (as hereinafter defined) and $60,000,000 under the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Facility (as hereinafter defined) in order to finance (a) working capital and
certain capital expenditures (including the build-out of the collocation and
data services businesses) and other general corporate purposes and (b) the
purchase of equipment, respectively;
WHEREAS, the Parent, the Borrower, the Subsidiary Guarantors, the
Amendment Lenders (as hereinafter defined) from time to time a party thereto,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Administrative Agent, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co., Incorporated, as Collateral Agent, entered into an amendment and
restatement, dated as of October 29, 2002, of the Original ITCD Credit Agreement
(the "First Amended ITCD Credit Agreement");
WHEREAS, pursuant to a letter, dated April 15, 2003, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc. resigned as Administrative Agent and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.,
Incorporated resigned as Collateral Agent under the First Amended ITCD Credit
Facility, and pursuant to the Successor Agent Agreement, dated as of September
2, 2003, among ▇▇▇▇▇ Fargo, Morgan Stanley Senior Funding, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co., Incorporated and the Lender Parties (the "Successor Agent Agreement"),
the Lender Parties appointed ▇▇▇▇▇ Fargo to act as Administrative Agent and
Collateral Agent under the First Amended ITCD Credit Agreement;
WHEREAS, the Board of Directors of the Parent has determined that it
is advisable and in the best interests of the Parent's stockholders, and
consistent with and in furtherance of the Parent's business strategies and
goals, for the Parent to acquire indirectly all of
the outstanding shares of BTI Telecom Corp., a North Carolina corporation
("BTI"), through the merger of 8DBC1 Corp., a North Carolina corporation and
wholly owned direct subsidiary of the Parent ("Merger Co."), with and into BTI
(the "Merger") upon the terms and subject to the conditions set forth in the
Agreement and Plan of Merger, dated as of July 2, 2003, among BTI, the parties
identified on the signature pages thereto as the "WCAS Securityholders," the
Parent and Merger Co. (as amended, the "Merger Agreement");
WHEREAS, the Board of Directors of BTI and the Board of Directors of
Merger Co. have each determined that it is advisable and in the best interests
of their shareholders, and consistent with and in furtherance of their business
strategies and goals, for the Parent to acquire indirectly all of the
outstanding shares of BTI through the Merger upon the terms and subject to the
conditions set forth in the Merger Agreement;
WHEREAS, immediately following the consummation of the Merger, the
Borrower and BTI will each be a direct wholly owned subsidiary of the Parent and
will each be a parent company of wholly owned subsidiaries, including, in the
case of BTI, Business Telecom, Inc. ("BTI, Inc.");
WHEREAS, in connection with the closing of the transactions
contemplated by the Merger Agreement, the parties hereto desire that (a) an
amount equal to the aggregate principal amount of the loans advanced to the
Borrower by the Lenders pursuant to the Original ITCD Credit Agreement and the
First Amended ITCD Credit Agreement and an amount equal to $30,000,000 of the
aggregate principal amount of loans advanced to BTI, Inc. pursuant to the
Original BTI Credit Agreement (as hereinafter defined) (which amounts advanced
to BTI, Inc. shall be deemed to be a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Borrowing for all purposes
hereunder) and all interest due thereon as of the Amendment Effective Date (as
hereinafter defined) shall be restructured, continued, converted and
consolidated, subject to the terms and conditions contained herein, and (b) an
amount equal to the remaining aggregate principal amount of loans advanced to
BTI, Inc. pursuant to the Original BTI Credit Agreement shall be restructured,
continued, converted and consolidated into and under the Credit Agreement, to be
entered into among the Parent, the Borrower, the subsidiary guarantors listed on
the signature pages thereto, the banks and financial institutions listed on the
signature pages thereto as Lenders and General Electric Capital Corporation,
solely in its capacity as administrative and collateral agent for such Lenders,
and not as lessor under any capital lease (as amended, the "Second Lien Credit
Agreement"); and
WHEREAS, it is the intention of the parties that this Agreement not
novate, extinguish or replace the indebtedness governed by the Original ITCD
Credit Agreement, the First Amended ITCD Credit Agreement or the Original BTI
Credit Agreement but that, from and after the Amendment Effective Date, the
First Amended ITCD Credit Agreement and $30,000,000 of the aggregate principal
amount of the loans advanced by BTI, Inc. pursuant to the original BTI Credit
Agreement shall be assumed, restructured, combined, converted and consolidated
pursuant to an amendment and restatement of the First Amended ITCD Credit
Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties
2
agree that, as of the Amendment Effective Date, the First Amended ITCD Credit
Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Additional Guarantor" has the meaning specified in Section 7.05.
"Administrative Agent" has the meaning specified in the preamble of
this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent as the Administrative Agent shall specify in writing
to the Lender Parties.
"Advance" means a Tranche 1 Term B Advance, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advance
or a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"Agents" has the meaning specified in the preamble of this Agreement.
"Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap
and Derivatives Association, Inc. (the "Master Agreement"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement
was being terminated early on such date of determination, (ii) such Loan
Party or Subsidiary was the sole "Affected Party," and (iii) the
Administrative Agent was the sole party determining such payment amount
(with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the ▇▇▇▇-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the
Loan Party or Subsidiary of a Loan Party to such Hedge
3
Agreement determined by the Administrative Agent based on the settlement
price of such Hedge Agreement on such date of determination; or (c) in all
other cases, the ▇▇▇▇-to-market value of such Hedge Agreement, which will
be the unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party to such Hedge Agreement determined by the
Administrative Agent as the amount, if any, by which (i) the present value
of the future cash flows to be paid by such Loan Party or Subsidiary
exceeds (ii) the present value of the future cash flows to be received by
such Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized
terms used and not otherwise defined in this definition shall have the
respective meanings set forth in the above described Master Agreement.
"Amendment Effective Date" means the first date on which the
conditions set forth in Section 3.01 shall have been satisfied.
"Amendment Lenders" means the lenders signatory to the First Amended
ITCD Credit Agreement.
"Applicable Base Rate Margin" means the Applicable Eurodollar Rate
Margin then in effect, less 1.00%.
"Applicable Eurodollar Rate Margin" means initially 4.00%, subject to
adjustment each fiscal quarter according to the following, determined by
the Senior Debt Ratio as measured on the last day of each fiscal quarter
for the period of the four consecutive fiscal quarters then ended,
commencing December 31, 2003, and as certified by the Borrower to the
Agents and the Lender Parties in the Financial Covenants Certificate:
Senior Debt Ratio Applicable Eurodollar Rate Margin
----------------- ---------------------------------
** 4.00x 5.25%
** 3.50x 4.75%
** 3.25x 4.25%
** 3.00x 4.00%
** 2.50x 3.75%
* 2.50x 3.50%
* Less than
** More than or equal to
For purposes of computing the applicable Eurodollar Rate Margin, EBITDA may
be adjusted pursuant to Section 5.02(q)(ii)(B).
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Base Rate
Advance and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
4
"Appropriate Lender" means, at any time, with respect to any of the
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility or the ▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇ Facility, a Lender that has a Commitment with respect to such
Facility at such time.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit C hereto.
"Assumed BTI Debt" means (a) the Debt evidenced by the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇
▇ Advances, (b) the Debt under the Second Lien Loan Documents, (c)
unsecured Debt in the principal amount of $18,525,000 evidenced by the 10
1/2% Senior Notes due 2007 of BTI and (d) unsecured Debt in the principal
amount of $7,100,000 evidenced by the note payable by BTI, Inc. to the
order of P&H, Inc.
"Bankruptcy Code" means title 11 of the United States Code, as
amended.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate listed in the "Money Rates" section of The Wall
Street Journal as the "prime rate"; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(i).
"Benefit Plan Exchange Offer" means any transaction in which the
Parent acquires and/or retires Equity Plan Securities in exchange for other
Equity Plan Securities.
"Board Designees" means individuals whose nomination for election,
appointment or election as directors of the Parent is effectuated pursuant
to (a) the Governance Agreement or (b) the Series A Certificate of
Designation or the Series B Certificate of Designation.
"Borrower" has the meaning specified in the preamble of this
Agreement.
"Borrowing" means a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Borrowing, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Borrowing or a Tranche 3 Term B Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates
5
to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.
"BTI" has the meaning specified in recitals of parties to this
Agreement.
"BTI, Inc." has the meaning specified in recitals of parties to this
Agreement.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, (a) all expenditures made, directly or indirectly,
by such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be,
in accordance with GAAP, reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person or have a useful
life of more than one year plus (b) the aggregate principal amount of all
Debt (including Obligations under Capitalized Leases) assumed or Incurred
in connection with any such expenditures. For purposes of this definition,
the purchase price of equipment that is purchased simultaneously with the
trade-in of existing equipment or with insurance proceeds shall be included
in Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for
the equipment being traded in at such time or the amount of such proceeds,
as the case may be.
"Capital Lease Amendment" means the Amendment to the Schedules and
Leases, dated as of October 29, 2002, among NTFC, General Electric Capital
Corporation, solely in its capacity as lessor , the Borrower and
ITC/\DeltaCom Communications, Inc.
"Capital Lease Amendment Payments" means one or more payments of any
amount of the maximum aggregate payment of $6,000,000 referred to in
Section 1(a)(ii) of the Capital Lease Amendment.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
date of this Agreement or issued thereafter, including, without limitation,
all Common Stock and Preferred Stock.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by
the Parent or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents and having a maturity of
not greater than 360 days from the date of issuance thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United States; (b)
insured certificates of deposit of or time deposits with any commercial
bank that is a Lender Party or a member of the Federal Reserve System,
issues (or the parent of which issues) commercial paper rated as described
in clause (c) below, is organized under the laws of
6
the United States or any State thereof and has combined capital and surplus
of at least $1 billion; (c) commercial paper in an aggregate amount of no
more than $160,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States and
rated at least "P-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.; or (d) obligations issued by
any state of the United States of America or any municipality or other
political subdivision of any such state or any public instrumentality
thereof having, at the time of acquisition, the highest rating obtainable
from any of Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., ▇▇▇▇▇'▇ Investors Service, Inc. or Fitch Ratings, Inc., including,
without limitation, auction rate certificates.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"Change of Control" means the occurrence on any date after the
Amendment Effective Date of any of the following: (a) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended) becomes the "beneficial owner" (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended) of more than 35% of the
total voting power of the Voting Stock of the Parent on a Fully Diluted
Basis and such ownership represents a greater percentage of the total
voting power of the Voting Stock of the Parent, on a Fully Diluted Basis,
than the percentage of the total voting power of the Voting Stock of the
Parent, on a Fully Diluted Basis, beneficially owned (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) by the Existing Stockholders on such
date; or (b) individuals who on the Amendment Effective Date constitute the
board of directors of the Parent (together with any new directors whose
appointment by the board of directors of the Parent or whose nomination by
the board of directors of the Parent for election by the Parent's
stockholders was approved by a vote of at least a majority of the members
of the board of directors then in office who either were members of the
board of directors on the Amendment Effective Date or whose appointment or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the board of directors then in
office; or (c) the Parent shall cease to own 100% of the Equity Interests
of the Borrower. For purposes of clause (b) of this definition, all Board
Designees shall be deemed to be members of the board of directors of the
Parent whose appointment or nomination for election was approved in the
manner specified in clause (b).
"Chief Financial Officer" means, with respect to any Loan Party, the
officer of such Loan Party designated by such Loan Party as its chief
financial officer or, if there is
7
no such officer designation, the officer of such Loan Party designated by
such Loan Party as its principal accounting officer.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Collateral Agent for the benefit of the Secured
Parties, and shall not include any equipment or other property pledged as
collateral to secure either of the GECC Capital Lease or the NTFC Capital
Lease.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Agent" has the meaning specified in the preamble of this
Agreement.
"Collateral Documents" means the Security Agreement, the Intercreditor
and Subordination Agreement, the Mortgages and any other agreement that
creates or purports to create a Lien in favor of the Collateral Agent for
the benefit of the Secured Parties.
"Commitment" means a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Commitment, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment or a Tranche 3 Term B Commitment.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock
of such Person, whether outstanding on the date of this Agreement or issued
thereafter, including, without limitation, all series and classes of such
common stock.
"Confidential Information" means information that any Loan Party
furnishes to any Agent or any Lender Party on a confidential basis, but
does not include any such information that is or becomes generally
available to the public or that is or becomes available to such Agent or
such Lender Party from a source other than the Loan Parties which such
Agent or such Lender Party do not have reason to believe is confidential
information. Notwithstanding anything to the contrary set forth in this
definition or in this Agreement "Confidential Information" shall not
include information relating to the tax structure or tax treatment of any
structure or transaction and all materials of any kind (including opinions
and other tax analyses) that are provided to the party relating to such tax
treatment and tax structure, excluding information the confidentiality of
which is reasonably necessary to comply with U.S. Federal or state
securities laws, it being the intent of the foregoing to cause any
structure or transaction not to be treated as having been offered under
conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or
any successor provision) of the Treasury Regulations promulgated under
Section 6011 of the Internal Revenue Code, and this definition shall be
construed in a manner consistent with such purpose.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
8
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the Obligation of a
primary obligor, (b) the Obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any Obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
"Contingent Payments" means any one or more payments in an aggregate
amount not to exceed $21,900,000 made by a Loan Party upon the occurrence
of an "Event" as defined in, and pursuant to, Section 32.2 of the Amendment
to the Revised and Restated Fiber Optic Facilities and Services Agreement,
dated as of August 1, 2000, as amended, between Southern Telecom, Inc. on
behalf of itself and as agent for the other parties named therein, and the
Borrower.
"Conversion," "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.08 or 2.09.
"Conversion Shares" means the Common Stock or other securities issued
or issuable upon conversion of the Series A Preferred Stock.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve
is proper in accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the
date of determination (excluding any Debt renewable or extendible, at the
option of such Person, to a date more
9
than one year from such date or arising under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a
period of more than one year from such date), (b) all amounts of Funded
Debt of such Person required to be paid or prepaid within one year after
such date and (c) all other items (including taxes accrued as estimated)
that in accordance with GAAP would be classified as current liabilities of
such Person.
"Debt" of any Person means, at any time without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or services (other than
trade payables not overdue by more than 90 days incurred in the ordinary
course of such Person's business, unless such trade payables overdue by
more than 90 days are contested in good faith by such Person), (c) all
Obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations of such
Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to Redeem any Equity Interests (other than
Reorganization Securities or Merger Agreement Securities) in such Person or
in any other Person, or to Redeem options, warrants or other rights to
purchase or otherwise acquire such Equity Interests (other than
Reorganization Securities or Merger Agreement Securities), before the date
which is six months after the Termination Date (provided, that if the
exercise of the right to Redeem such Equity Interests or options, warrants
or other rights is at the option of such Person under the terms of such
Equity Interests or otherwise, the date of such Person's exercise, if any,
of such right to Redeem shall be the date on which such Person shall first
be deemed to have an Obligation to Redeem such Equity Interests or options,
warrants or other rights for purposes of this definition), valued in the
case of Preferred Interests at the stated liquidation preference of such
Preferred Interests plus accrued and unpaid dividends from time to time,
(h) all Obligations of such Person in respect of Hedge Agreements, valued
at the Agreement Value thereof, (i) all Contingent Obligations of such
Person and (j) all indebtedness and other payment Obligations referred to
in clauses (a) through (i) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such indebtedness or
other payment Obligations. Notwithstanding clause (g) of this definition,
the Obligations referred to in such clause (g) as constituting "Debt" shall
not include Obligations of such Person to Redeem Equity Interests in such
Person (or to Redeem options, warrants or other rights to purchase or
otherwise acquire such Equity Interests) in exchange for, or out of the
proceeds of a substantially concurrent offering of, other Equity Interests
(or options, warrants or other rights to purchase or otherwise acquire such
other Equity Interests) in such Person, provided, that any Obligations of
such Person to Redeem such other Equity
10
Interests (or to Redeem options, warrants or other rights to purchase or
acquire such other Equity Interests) shall be subject to the provisions of
such clause (g).
"Debt for Borrowed Money" of any Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a Consolidated
balance sheet of such Person, provided, however, that, notwithstanding the
foregoing, "Debt for Borrowed Money" shall not include any Preferred
Interests (including, without limitation, with respect to the Loan Parties,
the Series A Preferred Stock and the Series B Preferred Stock) or any
dividends accrued or paid or payable with respect to Preferred Interests.
"Debt Rating" has the meaning set forth in Section 5.01(n)(ii).
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to any Agent or
any other Lender Party hereunder or under any other Loan Document at or
prior to such time that has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender Party to
(a) any other Lender Party pursuant to Section 2.12 to purchase any
participation in Advances owing to such other Lender Party and (b) any
Agent pursuant to Section 8.05 to reimburse such Agent for such Lender
Party's ratable share of any amount required to be paid by the Lender
Parties to such Agent. In the event that a portion of a Defaulted Amount
shall be deemed paid pursuant to Section 2.14(b), the remaining portion of
such Defaulted Amount shall be considered a Defaulted Amount originally
required to be paid hereunder or under any other Loan Document on the same
date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Amount or (b) shall take any action or be the
subject of any action or proceeding of a type described in Section 6.01(f).
"Disclosed Litigation" has the meaning specified in Section 3.01(f).
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any Person for any period, the sum, determined on
a Consolidated basis, of (a) net income (or net loss) after eliminating
extraordinary and/or non- recurring items to the extent included in net
income (except as provided in this definition), (b) interest expense, (c)
income tax expense, (d) depreciation expense, (e) amortization expense, (f)
the aggregate of all non-cash charges deducted in arriving at net
11
income in clause (a) above, including, but not limited to, asset impairment
charges, and (g) any restructuring charges (i) that are recognized and paid
after August 31, 2002 within four months of the applicable restructuring
event, and (ii) to the extent not included in clause (i) above, relating to
the Merger (with respect to the Parent and its Subsidiaries) or any other
merger or acquisition permitted under this Agreement that is recognized and
paid after the Amendment Effective Date within nine months of the
consummation of the Merger or other applicable merger or acquisition, and
which has a benefit over a twelve-month period that exceeds such charge, in
each case determined in accordance with GAAP for such period (including,
without limitation, Emerging Issues Task Force Issue 94-3 and Statement of
Financial Accounting Standards No. 146).
"Eligible Assignee" means any commercial bank or financial institution
(including, without limitation, any fund that regularly invests in loans
similar to the Advances) as approved (so long as no Default has occurred
and is continuing at the time of the relevant assignment pursuant to
Section 9.07) by the Borrower (such approval not to be unreasonably
withheld or delayed); provided, however, that neither any Loan Party nor
any Affiliate of a Loan Party shall qualify as an Eligible Assignee under
this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, health, safety or
natural resources, including, without limitation, those relating to the
use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in
12
such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"Equity Plan Securities" means any Equity Interests awarded, granted,
sold or issued pursuant to any stock option, restricted stock, stock
incentive, deferred compensation, profit sharing, defined benefit, defined
contribution or other benefit plan of any Loan Party or any Subsidiary of
any Loan Party.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected
to occur with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA), excluding, however, a "standard termination" as defined in
Section 4041(a)(2) of ERISA; (d) the cessation of operations at a facility
of any Loan Party or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was
a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA shall
have been met with respect to any Plan; (g) the adoption of an amendment to
a Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that constitutes
grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a
13
Lender Party (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender Party as such Lender Party may
from time to time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period for a period
equal to such Interest Period (provided, that, if for any reason such rate
is not available, the term "Eurodollar Rate" shall mean, for any Interest
Period for all Eurodollar Rate Advances comprising part of the same
Borrowing, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable
rate shall be the arithmetic mean of all such rates) by (b) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means, for any period,
(a) the sum of:
(i) Consolidated net income (or loss) of the Parent and its
Subsidiaries for such period plus
14
(ii) the aggregate amount of all non-cash charges deducted
in arriving at such Consolidated net income (or loss) plus
(iii) if there was a net increase in Consolidated Current
Liabilities of the Parent and its Subsidiaries during such
period, the amount of such net increase plus
(iv) if there was a net decrease in Consolidated Current
Assets (excluding cash and Cash Equivalents) of the Parent and
its Subsidiaries during such period, the amount of such net
decrease less
(b) the sum of (without duplication):
(i) the aggregate amount of all non-cash credits included in
arriving at such Consolidated net income (or loss) plus
(ii) if there was a net decrease in Consolidated Current
Liabilities of the Parent and its Subsidiaries during such
period, the amount of such net decrease plus
(iii) if there was a net increase in Consolidated Current
Assets (excluding cash and Cash Equivalents) of the Parent and
its Subsidiaries during such period, the amount of such net
increase plus
(iv) Capital Expenditures of the Parent and its Subsidiaries
during such period, provided, however, that such Capital
Expenditures are made in the telecommunications industry or
ancillary or related industry plus
(v) the Capital Lease Amendment Payments and all scheduled
payments of principal (without regard to any prepayments)
outstanding under the GECC Capital Lease and the NTFC Capital
Lease plus
(vi) all payments made pursuant to Sections 2.03(a),
2.03(b), 2.03(c) and 2.05(a) plus
(vii) all payments of principal on account of Assumed BTI
Debt.
Notwithstanding anything contained in this Agreement to the contrary, any
financial statement effect related to the deposit of funds into, or the
withdrawal of funds from, the segregated account referred to in Section
5.01(n)(iv) shall be excluded from Excess Cash Flow.
"Existing Stockholders" means the WCAS Securityholders and their
Affiliates. For purposes of this definition, "Affiliate" means, as applied
to any Person, any other Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such
Person. For purposes of this definition, "control" (including,
15
with correlative meanings, the terms "controlling," "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments, any net proceeds of any Permitted Refinancing and any purchase
price adjustment received in connection with any purchase agreement;
provided, however, that an Extraordinary Receipt shall not include cash
receipts, awards or payments received from proceeds of insurance,
condemnation awards (or payments in lieu thereof) or indemnity payments to
the extent that such proceeds, awards or payments (a) are in respect of
loss or damage to equipment pledged as collateral to secure, or are
otherwise properly attributable to, either of the GECC Capital Lease or the
NTFC Capital Lease (and such cash receipts, awards or payments shall be
held in a segregated account in trust for the benefit of General Electric
Capital Corporation (solely in its capacity as lessor under the GECC
Capital Lease) and NTFC to be remitted to General Electric Capital
Corporation (solely in its capacity as lessor under the GECC Capital Lease)
and NTFC in accordance with the GECC Capital Lease and the NTFC Capital
Lease), or (b) are in respect of loss or damage to fixed assets, real
property or equipment (other than equipment pledged to secure either of the
GECC Capital Lease or the NTFC Capital Lease) and are applied to replace or
repair such fixed assets, real property or equipment in respect of which
such proceeds, awards or payments were received in accordance with the
terms of the Loan Documents (or to reimburse such Person for expenditures
previously incurred on account of such replacement or repair), provided,
that such proceeds, awards or payments (i) are immediately deposited into
an account held by the Collateral Agent on behalf of the Lenders, and (ii)
are applied within twelve months after the occurrence of such damage or
loss, provided, that the Borrower shall have delivered documentation
reasonably satisfactory to the Administrative Agent evidencing the cost and
proposed use of any equipment repaired or replaced pursuant thereto, or (c)
are received by any Person in respect of any third party claim against such
Person and applied to pay (or to reimburse such Person for its prior
payment of) such claim and the costs and expenses of such Person with
respect thereto, or (d) are received by any Person by way of reimbursement
or indemnification of such Person for costs and expenses incurred by such
Person. Any proceeds that are properly attributable to the GECC Capital
Lease or the NTFC Capital Lease shall not constitute "Extraordinary
Receipts."
"Facility" means the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Facility or the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility and "Facilities" means,
collectively, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility
and the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility.
"FCC" means the Federal Communications Commission, or any governmental
agency succeeding to the functions thereof.
16
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Financial Covenants Certificate" means the certificate delivered by
the Borrower and certified by the Chief Financial Officer of the Borrower
and containing the information specified in the definition of "Applicable
Eurodollar Rate Margin" and Sections 2.05(b)(v), 2.05(b)(vi), 5.02(b),
5.02(q), 5.03(b)(iii) and (iv), 5.03(c)(iii) and 5.03(q)(v), as applicable,
and demonstrating compliance with the applicable covenants.
"First Amended ITCD Credit Agreement" has the meaning specified in the
recitals of parties to this Agreement.
"Fiscal Year" means a Fiscal Year of the Parent and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"Fully Diluted Basis" means, as of any date of determination, the sum
of (i) the number of shares of Voting Stock outstanding as of such date of
determination plus (ii) the number of shares of Voting Stock issuable upon
the exercise, conversion or exchange of all then-outstanding warrants,
options, convertible Capital Stock or indebtedness, exchangeable Capital
Stock or indebtedness, or other rights exercisable for or convertible or
exchangeable into, directly or indirectly, shares of Voting Stock, whether
at the time of issue or upon the passage of time or upon the occurrence of
some future event, and whether or not in the money as of such date of
determination.
"Funded Debt" of any Person means Debt of such Person that by its
terms matures more than one year after the date of its creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of its creation.
"GAAP" has the meaning specified in Section 1.03.
"GECC" means General Electric Capital Corporation solely in its
capacity as a Lender Party under this Agreement or as a Lender Party or
Administrative Agent and Collateral Agent as provided and defined in the
Second Lien Credit Agreement, but not in its capacity as lessor under the
GECC Capital Lease.
17
"GECC Capital Lease" means the Master Lease Agreement, dated December
31, 2001, and the schedules and annexes thereto, as amended, between
General Electric Capital Corporation, solely in its capacity as lessor, and
ITC/\DeltaCom Communications, Inc.
"Governance Agreement" means the Governance Agreement, dated as of
July 2, 2003, as amended, among the Parent, WCAS Capital Partners III,
L.P., Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P., WCAS Information
Partners, L.P. and certain individual investors and trusts listed on the
signature pages thereto.
"Guaranteed Obligations" has the meaning specified in Section 7.01(a).
"Guaranties" means the Parent Guaranty and the Subsidiary Guaranties.
"Guarantors" means the Parent and the Subsidiary Guarantors.
"Guaranty Supplement" has the meaning specified in Section 7.05.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other hedging agreements.
"Hedge Bank" means any Lender Party or an Affiliate of a Lender Party
in its capacity as a party to a Secured Hedge Agreement.
"IFN" means Interstate FiberNet, Inc., the Borrower under this
Agreement.
"Incur" means, with respect to any Debt, to incur, create, issue,
assume, guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Debt.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Intercreditor and Subordination Agreement" means the Intercreditor
and Subordination Agreement, dated as of the date hereof, among the Agents,
the Lender Parties, the Agents as provided and defined in the Second Lien
Credit Agreement, the Lender Parties as provided and defined in the Second
Lien Credit Agreement, and the Loan Parties.
18
"Interest Coverage Ratio" means, at any date of determination, the
ratio of (a) Consolidated EBITDA to (b) cash interest paid in respect of
all Debt for Borrowed Money, in each case, of or by the Parent and its
Subsidiaries during the two fiscal quarter periods ending on the last date
of the most recently ended fiscal quarter.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance under a Facility that ends after any
principal repayment installment date for such Facility unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of the
Security Agreement.
19
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor Incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
such Person.
"Lender Parties" has the meaning specified in the recitals of parties
to this Agreement.
"Lenders" means the Lender Parties and each Person that shall become a
Lender hereunder pursuant to Section 9.07 for so long as such Lender Party
or Person, as the case may be, shall be a party to this Agreement.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property, but excluding any lien, security interest or other
charge or encumbrance of any kind or other type of preferential arrangement
in respect of Ordinary Course Obligations in an aggregate amount up to the
sum of (x) $8,000,000, plus (y) if the Borrower shall make one or more
optional prepayments of Advances pursuant to Section 2.05(a), the amount,
up to $2,000,000, equal to the aggregate amount of such optional
prepayments, provided, that the maximum aggregate amount of the Ordinary
Course Obligations excluded from this definition shall not exceed
$10,000,000.
"Loan Documents" means (a) for purposes of this Agreement and the
Notes and any amendment, supplement or modification hereof or thereof, (i)
this Agreement, (ii) the Notes and (iii) the Collateral Documents and (b)
for purposes of the Collateral Documents and for all other purposes other
than for purposes of this Agreement and the Notes, (i) this Agreement, (ii)
the Notes, (iii) the Collateral Documents and (iv) each Secured Hedge
Agreement.
"Loan Parties" means the Borrower and the Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Parent and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, BTI and the Subsidiaries of the
Borrower and BTI, taken as a whole, (b) the rights and remedies of the
Agents or any Lender Party under any Loan Document or
20
(c) the ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party.
"Material Contract" means, with respect to any Person, each contract
to which such Person is a party involving aggregate consideration payable
to or by such Person of $10,000,000 or more in any year or otherwise
material to the business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person. With respect to the
Loan Parties, the Merger Agreement shall be deemed to be a Material
Contract.
"MEGAPOP Transactions" means the transactions contemplated by (a) the
Telecommunications Systems Agreement, dated as of April 7, 2003, as
amended, between the Borrower and Mississippi Economic Growth Alliance &
Point of Presence, Inc., (b) the Marketing and Operating Agreement, dated
as of April 7, 2003, as amended, between the Borrower and Mississippi
Economic Growth Alliance & Point of Presence, Inc. and (c) the Purchase
Agreement, dated as of April 7, 2003, as amended, between the Borrower and
Mississippi Economic Growth Alliance & Point of Presence, Inc.
"Merger" has the meaning specified in the recitals of parties to this
Agreement.
"Merger Agreement" has the meaning specified in the recitals of
parties to this Agreement.
"Merger Agreement Common Stock" means (a) the Common Stock of the
Parent issued or issuable pursuant to the Merger Agreement, (b) the Series
B Conversion Shares and (c) the Series B Warrant Shares.
"Merger Agreement Securities" means (a) the Merger Agreement Common
Stock, (b) the Series B Preferred Stock and (c) the Series B Warrants.
"Merger Closing Date" means the date on which the effective time of
the Merger shall occur.
"Merger Co." has the meaning specified in the recitals of parties to
this Agreement.
"Merger Transactions" means the transactions contemplated by the
Merger Agreement, including, without limitation, (a) the Merger and (b) the
issuance of the Merger Agreement Securities by the Parent.
"Minimum Required Synergies" means gross capital expense reductions,
gross cost of services expense reductions and other gross operating expense
reductions in an aggregate amount of at least $37,000,000 realized since
November 30, 2002 by the Loan Parties and arising from or related to the
Merger Transactions.
"Mortgage Policies" has the meaning specified in Section
5.01(n)(i)(B).
21
"Mortgages" has the meaning specified in Section 5.01(n)(i).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"Net Advance Payments" means prepayments of the purchase price or
other consideration, net of brokers' and finders' fees and commissions,
reasonable legal fees and other reasonable transaction costs.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset by any Person (excluding (A) Equity
Interests, (B) property properly attributable to the GECC Capital Lease or
the NTFC Capital Lease and (C) payments made pursuant to Section
1(a)(ii)(A) of the Capital Lease Amendment), or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate
amount of cash received from time to time (whether as initial consideration
or through payment or disposition of deferred consideration) by or on
behalf of such Person in connection with such transaction after deducting
therefrom only (without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees and expenses,
finder's fees and other similar fees and commissions and out-of-pocket
costs and expenses, and (b) the amount of taxes payable in connection with
or as a result of such transaction, in each case to the extent, but only to
the extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of such
Person and are properly attributable to such transaction or to the asset
that is the subject thereof; provided, however, that in the case of taxes
that are deductible under clause (b) above but for the fact that, at the
time of receipt of such cash, such taxes have not been actually paid or are
not then payable, such Loan Party or such Subsidiary may deduct an amount
(the "Reserved Amount") equal to the amount reserved in accordance with
GAAP for such Loan Party's or such Subsidiary's reasonable estimate of such
taxes, other than taxes for which such Loan Party or such Subsidiary is
indemnified; provided, further, however, that, at the time such taxes are
paid, an amount equal to the amount, if any, by which the Reserved Amount
for such taxes exceeds the amount of such taxes actually paid shall
constitute "Net Cash Proceeds" of the type for which such taxes were
reserved for all purposes hereunder; and provided, further, still, that Net
Cash Proceeds from (i) the sale, lease, transfer or other disposition of
any asset or (ii) Extraordinary Receipts shall not include up to $500,000
of cash proceeds in the aggregate received in connection with one or more
such transactions or receipts, as the case may be, to the extent such cash
proceeds are applied to replace the asset in respect of
22
which such cash proceeds were received or are otherwise invested in such
Person's business, so long as application is made within twelve months
after the occurrence of such sale, lease, transfer or other disposition or
receipt, as the case may be.
"Note" means a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note or a
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note.
"NPL" means the National Priorities List under CERCLA.
"NTFC" means NTFC Capital Corporation.
"NTFC Capital Lease" means the Master Lease Agreement, dated December
29, 2000, and the schedules and annexes thereto, as amended, among NTFC,
the Borrower and ITC/\DeltaCom Communications, Inc.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of any Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of
the foregoing that any Lender Party, in its sole discretion, may elect to
pay or advance on behalf of such Loan Party.
"Open Year" has the meaning specified in Section 4.01(r)(iii).
"Ordinary Course Obligations" means obligations (exclusive of
obligations for the payment of borrowed money) under letters of credit,
surety bonds, pledges, deposits or other arrangements made to secure the
performance of tenders, bids, leases, statutory or regulatory obligations,
bankers' acceptances, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a similar
nature incurred in the ordinary course of business.
"Original BTI Credit Agreement" means the Credit Agreement, dated as
of March 30, 2001, as amended, among BTI, Inc., as Borrower, BTI, Business
Telecom of Virginia, Inc., FS Multimedia, Inc., as Guarantors, General
Electric Capital Corporation, as Agent and Lender, and Banc of America
Strategic Solutions, Inc. and Export Development Canada (f/k/a Export
Development Corporation), as Lenders.
"Original ITCD Credit Agreement" has the meaning specified in the
recitals of parties to this Agreement.
23
"Other Taxes" has the meaning specified in Section 2.11(b).
"Parent" has the meaning specified in the preamble of this Agreement.
"Parent Guaranty" means the guaranty of the Parent set forth in
Article VII.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b); (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days; (c) pledges or deposits to
secure obligations under workers' compensation laws or similar legislation
or to secure public or statutory obligations; and (d) Permitted
Encumbrances.
"Permitted Refinancing" has the meaning specified in Section
5.02(b)(vii).
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan of Reorganization" means the Plan of Reorganization of the
Parent under chapter 11 of the Bankruptcy Code in In re ITC/\DeltaCom, Inc.
(Case No. 02-11848 (MFW)).
"Pledged Debt" has the meaning specified in the Security Agreement.
"Pledged Shares" has the meaning specified in the Security Agreement.
"Post-Petition Interest" has the meaning specified in Section 7.06(b).
"Pre-Amendment Information" means all of the written information
provided by or on behalf of the Borrower to the Lenders prior to the
Amendment Effective Date, including all written information regarding the
Merger Transactions.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
24
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference
equity, whether outstanding on the date of this Agreement or issued
thereafter, including, without limitation, all series and classes of such
preferred or preference stock.
"PRI" means primary rate interface, a 1.544 mb/s information-carrying
channel that furnishes integrated services digital network services to end
users or wholesale customers.
"PUC" means any state regulatory agency or body that exercises
jurisdiction over the rates or services or the ownership, construction or
operation of any network facility or long distance telecommunications
systems or over Persons who own, construct or operate a network facility or
long distance telecommunications systems, in each case by reason of the
nature or type of the business subject to regulation and not pursuant to
laws and regulations of general applicability to Persons conducting
business in such state.
"Redeem" means to purchase, redeem or otherwise retire or acquire for
value, provided, however, that, notwithstanding the foregoing, "Redeem"
shall not include (a) the acquisition and/or retirement by the Parent of
Equity Interests of the Parent which are surrendered to the Parent as
indemnification payments pursuant to the Merger Agreement, (b) the
acquisition and/or retirement by the Parent of Common Stock or other Equity
Interests of the Parent tendered by the holder of an Equity Plan Security
in payment of an exercise or purchase price specified in such Equity Plan
Security or (c) a Benefit Plan Exchange Offer.
"Register" has the meaning specified in Section 2.15(b).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release Date" has the meaning specified in Section 5.01(n)(iv).
"Reorganization Common Stock" means the Common Stock of the Parent
issued or issuable under or in connection with the Plan of Reorganization,
including, without limitation, the Conversion Shares and the Warrant
Shares.
"Reorganization Securities" means (a) the Reorganization Common Stock,
(b) the Series A Preferred Stock and (c) the Warrants.
"Replaced Lender Party" has the meaning specified in Section 2.11(g).
"Replacement Effective Date" has the meaning specified in Section
2.11(g).
"Replacement Lender Party" has the meaning specified in Section
2.11(g).
25
"Required Lenders" means, at any time, Lenders owed or holding at
least a majority of the aggregate principal amount of the Advances
outstanding at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (A) the aggregate principal
amount of the Advances owing to such Lender (in its capacity as a Lender)
and outstanding at such time and (B) the aggregate unused Commitments of
such Lender at such time.
"Responsible Officer" means any officer of any Loan Party or any of
its Subsidiaries.
"Second Capital Lease Amendment" means the Second Amendment to the
Schedules and Leases, dated as of the date hereof, among NTFC, General
Electric Capital Corporation, solely in its capacity as lessor, the
Borrower and ITC/\DeltaCom Communications, Inc.
"Second Lien Credit Agreement" has the meaning specified in the
recitals of the parties to this Agreement.
"Second Lien Loan Documents" means the Loan Documents (as provided and
defined in the Second Lien Credit Agreement).
"Secured Hedge Agreement" means any Hedge Agreement required or
permitted under Article V that is entered into by and between the Borrower
and any Hedge Bank.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Agents, the Lender Parties and the Hedge
Banks.
"Security Agreement" has the meaning specified in Section 3.01(b)(ii).
"Senior Debt" means, for any period, all Debt of the Borrower, BTI and
the Subsidiaries of the Borrower and BTI, secured by a first priority Lien
on real or personal property of the Borrower, BTI or the Subsidiaries of
the Borrower or BTI, but excluding any Debt or other obligations owing to
Southern Telecom, Inc., provided, that Capitalized Lease payments owing to
Southern Telecom, Inc. for any Fiscal Year are less than $1,500,000.
"Senior Debt Ratio" means, in respect of any specified period, the
ratio of (a) Senior Debt for such period to (b) EBITDA for such period.
"Series A Certificate of Designation" means the Parent's Certificate
of Designation of the Powers, Preferences and Relative, Participating,
Optional and other Special Rights of 8% Series A Convertible Redeemable
Preferred Stock and Qualifications, Limitations and Restrictions thereof,
as in effect from time to time.
26
"Series A PIK Dividends" means the shares of Series A Preferred Stock
paid or payable as dividends on outstanding shares of Series A Preferred
Stock.
"Series A Preferred Stock" means the shares of preferred stock of the
Parent designated as the 8% Series A Convertible Redeemable Preferred Stock
and issued pursuant to the Series A Certificate of Designation, including,
without limitation, Series A PIK Dividends.
"Series B Certificate of Designation" means the Parent's Certificate
of Designation of the Powers, Preferences and Relative, Participating,
Optional and other Special Rights of 8% Series B Convertible Redeemable
Preferred Stock and Qualifications, Limitations and Restrictions thereof,
as in effect from time to time.
"Series B Conversion Shares" means the Common Stock or other
securities issued or issuable upon conversion of the Series B Preferred
Stock.
"Series B PIK Dividends" means the shares of Series B Preferred Stock
paid or payable as dividends on outstanding shares of Series B Preferred
Stock.
"Series B Preferred Stock" means the shares of preferred stock of the
Parent designated as the 8% Series B Convertible Redeemable Preferred Stock
and issued pursuant to the Series B Certificate of Designation, including,
without limitation, Series B PIK Dividends.
"Series B Warrant Shares" means the Common Stock or other securities
issued or issuable upon exercise of the Series B Warrants.
"Series B Warrants" means the Common Stock purchase warrants issued by
the Parent on the date of the initial issuance of the Series B Preferred
Stock and any warrants issued in exchange or substitution therefor or upon
exercise thereof in accordance with the warrant agreement pursuant to which
such Common Stock purchase warrants are issued from time to time.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable 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 does not intend
to, and does not believe
27
that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) 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 an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subordinated Debt" means Debt that, by the terms of any agreement or
instrument pursuant to which such Debt is Incurred, is expressly made
subordinate in right of payment and priority to the Debt under the Loan
Documents and the Debt under the Second Lien Loan Documents.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantors" means the Subsidiaries of the Parent listed on
Schedule II hereto and each other Subsidiary of the Parent that shall be
required to execute and deliver a guaranty pursuant to Section 5.01(j).
"Subsidiary Guaranty" means the guaranty of the Subsidiary Guarantors
set forth in Article VII.
"Successor Agent Agreement" has the meaning specified in the recitals
of parties to this Agreement.
"Surviving Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately after giving effect to the consummation of the
Merger Transactions.
"Tax Agreement" means the Tax Indemnification Agreement, dated as of
August 26, 1997, between ITC Holding Company, Inc. and the Parent.
"Tax Certificate" has the meaning specified in Section 5.03(k).
"Taxes" has the meaning specified in Section 2.11(a).
"Term Sheet" means the term sheet, dated July 2, 2003, setting forth
the proposed material terms and conditions of this Agreement.
28
"Termination Date" means the earlier of (a) the date on which the
Administrative Agent, by notice to the Borrower, declares the Notes, all
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable pursuant to Section
6.01 and (b) June 30, 2006.
"Total Leverage Ratio" means, at any date of determination, the ratio
of (x) Consolidated debt to (y) Consolidated EBITDA, in each case, of or by
the Parent and its Subsidiaries during the twelve-month period ending on
the last date of the most recently ended calendar month. For purposes of
computing Total Leverage Ratio only, the term "debt" as used in clause (x)
above means, without duplication, (a) Debt under the Loan Documents, (b)
the Debt referred to in clauses (b), (c) and (d) of the definition of
"Assumed BTI Debt," (c) all Funded Debt, (d) all Debt for Borrowed Money,
(e) all Obligations in respect of Hedge Agreements, valued as provided in
clause (h) of the definition of "Debt," and (f) all Obligations as lessee
under Capitalized Leases.
"Tranche 1 Term B Advance" means the single advance that was made by
each ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, according to such Lender's ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment, upon the closing of the Original ITCD Credit Agreement.
"Tranche 1 Term B Borrowing" means a borrowing consisting of
simultaneous ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances of the same Type made by the ▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇ Lenders.
"Tranche 1 Term B Commitment" means, with respect to any ▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇ Lender at any time, the amount set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 2.15(b)
as such Lender's "Tranche 1 Term B Commitment."
"Tranche 1 Term B Facility" means, at any time, the aggregate amount
of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders' ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Commitments at such time.
"Tranche 1 Term B Lender" means any Lender that has a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment.
"Tranche 1 Term B Note" means an amended and restated promissory note
of the Borrower payable to the order of any ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, in
substantially the form of Exhibit A-1 hereto, evidencing the indebtedness
of the Borrower to such Lender resulting from the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advance
made by such Lender, as amended.
"Tranche 2 Term B Advance" means the single advance that was made by
each ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, according to such Lender's ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment, upon the closing of the Original ITCD Credit Agreement.
"Tranche 2 Term B Borrowing" means a borrowing consisting of
simultaneous ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances of the same Type made by the ▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇ Lenders.
"Tranche 2 Term B Commitment" means, with respect to any ▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇ Lender at any time, the amount set forth for such Lender in the
Register maintained by
29
the Administrative Agent pursuant to Section 2.15(b) as such Lender's
"Tranche 2 Term B Commitment."
"Tranche 2 Term B Facility" means, at any time, the aggregate amount
of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders' ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Commitments at such time.
"Tranche 2 Term B Lender" means any Lender that has a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment.
"Tranche 2 Term B Note" means an amended and restated promissory note
of the Borrower payable to the order of any ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, in
substantially the form of Exhibit A-2 hereto, evidencing the indebtedness
of the Borrower to such Lender resulting from the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advance
made by such Lender, as amended.
"Tranche 3 Term B Advance" means the single advance that was made or
deemed made by each ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, according to such Lender's
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Commitment, upon the closing of this Agreement.
"Tranche 3 Term B Borrowing" means a borrowing consisting of
simultaneous ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances of the same Type made by the ▇▇▇▇▇▇▇
▇ ▇▇▇▇ ▇ Lenders.
"Tranche 3 Term B Commitment" means, with respect to any ▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇ Lender at any time, the amount set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 2.15(b)
as such Lender's "Tranche 3 Term B Commitment."
"Tranche 3 Term B Facility" means, at any time, the aggregate amount
of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders' ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Commitments at such time.
"Tranche 3 Term B Lender" means any Lender that has a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Commitment.
"Tranche 3 Term B Note" means a promissory note of the Borrower
payable to the order of any ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lender, in substantially the
form of Exhibit A-3 hereto, evidencing the indebtedness of the Borrower to
such Lender resulting from the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advance made by such
Lender.
"Transactions" means the transactions contemplated by the Loan
Documents.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unencumbered Parcel" means any parcel of real property owned by the
Parent or its Subsidiaries that was not previously pledged as Collateral
under the First Amended ITCD Credit Agreement or the Original BTI Credit
Agreement.
30
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person. For purposes of this definition, Common Stock of the Parent shall
constitute Voting Stock of the Parent and the Series A Preferred Stock and
the Series B Preferred Stock shall not constitute Voting Stock of the
Parent.
"Warrant Shares" means the Common Stock or other securities issued or
issuable upon exercise of the Warrants.
"Warrants" means the Common Stock purchase warrants issued by the
Parent on the date of the initial issuance of the Series A Preferred Stock
and any warrants issued in exchange or substitution therefor or upon
exercise thereof in accordance with the warrant agreement pursuant to which
such Common Stock purchase warrants were issued.
"WCAS Securityholders" means, collectively, (a) WCAS Capital Partners
III, L.P., (b) Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P., (c) WCAS
Information Partners, L.P., (d) each of the individual investors and trusts
that executed the Governance Agreement as "WCAS Securityholders," (e) the
Affiliates of any of the Persons referred to in clauses (a), (b), (c) and
(d) above, (f) the related Persons of any of the Persons referred to in
clauses (a), (b), (c) and (d) above and (g) the WCAS Securityholder
Permitted Transferees. For purposes of this definition, "Affiliate" means,
as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control
with, such Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"WCAS Securityholder Permitted Transferees" means the individuals who
are the heirs, executors, administrators, testamentary trustees, legatees,
beneficiaries, spouses or lineal descendants of any of the WCAS
Securityholders who are natural Persons.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"▇▇▇▇▇ Fargo" has the meaning specified in the preamble of this
Agreement.
31
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "as
amended" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein, unless otherwise specified herein, shall be construed in
accordance with generally accepted accounting principles in the United States of
America as in effect from time to time and consistent with those applied in the
preparation of the financial statements of the Parent and its Subsidiaries.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. Restructuring. Subject to the terms and conditions
hereof, including without limitation, Section 3.01, the parties hereto agree to,
and hereby, restructure, continue, convert and consolidate the loans made
pursuant to the Original ITCD Credit Agreement and the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Loans
and assume all of the obligations therein. Notwithstanding anything to the
contrary contained in this Agreement, the parties understand and agree that, as
a result of the restructuring, continuation, conversion and consolidation
contemplated hereby, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Facility and the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility are fully funded and no additional
funding of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility or the
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility shall be made hereunder. As of the Amendment Effective
Date, the principal amount outstanding of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility is
$96,500,000, the principal amount outstanding of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Facility
is $57,900,000 and the principal amount outstanding of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Facility is $30,000,000, in each case excluding accrued and unpaid interest.
These amounts represent valid and binding claims enforceable against the
Borrower in accordance with the terms of the Loan Documents.
SECTION 2.02. Intentionally omitted.
SECTION 2.03. Repayment of Advances. (a) Tranche 1 Term B Advances.
The Borrower shall repay to the Administrative Agent for the ratable account of
the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders the aggregate outstanding principal amount of the
▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances on the following dates in the amounts indicated (which
amount shall be reduced as a result of the application of prepayments in
accordance with Section 2.05):
32
Date Amount
------------------ -----------
December 31, 2003 $ 250,000
March 31, 2004 $ 250,000
June 30, 2004 $ 250,000
September 30, 2004 $ 250,000
December 31, 2004 $ 250,000
March 31, 2005 $ 250,000
June 30, 2005 $ 250,000
September 30, 2005 $ 3,125,000
December 31, 2005 $ 3,125,000
March 31, 2006 $ 3,125,000
Termination Date $85,375,000
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances outstanding on such date.
(b) ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders the
aggregate outstanding principal amount of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances on the
following dates in the amounts indicated (which amounts shall be reduced as a
result of the application of prepayments in accordance with Section 2.05):
Date Amount
------------------ -----------
December 31, 2003 $ 150,000
March 31, 2004 $ 150,000
June 30, 2004 $ 150,000
September 30, 2004 $ 150,000
December 31, 2004 $ 150,000
March 31, 2005 $ 150,000
June 30, 2005 $ 150,000
September 30, 2005 $ 1,875,000
December 31, 2005 $ 1,875,000
March 31, 2006 $ 1,875,000
Termination Date $51,225,000
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances outstanding on such date.
33
(c) ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Lenders the
aggregate outstanding principal amount of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances on the
following dates in the amounts indicated (which amount shall be reduced as a
result of the application of prepayments in accordance with Section 2.05):
Date Amount
------------------ -----------
December 31, 2003 $ 77,922
March 31, 2004 $ 77,922
June 30, 2004 $ 77,922
September 30, 2004 $ 77,922
December 31, 2004 $ 77,922
March 31, 2005 $ 77,922
June 30, 2005 $ 77,922
September 30, 2005 $ 974,025
December 31, 2005 $ 974,025
March 31, 2006 $ 974,025
Termination Date $26,532,471
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances outstanding on such date.
(d) Additional Provisions. Without limitation of any remedies set
forth in this Agreement, in the event that the Borrower shall fail to repay, in
full, all scheduled principal amounts for each Facility on any scheduled payment
date pursuant to this Section 2.03, the total amount of any principal payments
made by the Borrower on or after such date shall be applied ratably (i) to each
Facility and (ii) to each Lender under each such Facility based upon the
outstanding principal amount of Advances payable to such Lenders thereunder and
to the installments thereof on a pro rata basis.
SECTION 2.04. Intentionally omitted.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice in the case of Base Rate Advances and three
Business Days' notice in the case of Eurodollar Rate Advances, in each case to
the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding aggregate principal amount of the Advances comprising part of
the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the aggregate principal amount prepaid;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount of $500,000 or an integral multiple of $500,000 in excess
thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date
other than the last day of an Interest Period for such Advance, the Borrower
shall also
34
pay any amounts owing pursuant to Section 9.04(c). Each such prepayment of any
Advances shall be applied ratably (i) to each Facility and (ii) to each Lender
under each such Facility based upon the respective Commitments of the Lenders
thereunder and to the installments thereof on a pro rata basis.
(b) Mandatory. (i) The Borrower shall, on the 90th day following the
end of each Fiscal Year commencing with the 2003 Fiscal Year, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings in an amount equal to the amount of Excess Cash Flow in excess of
$5,000,000 for such Fiscal Year.
(ii) The Borrower shall, within two Business Days after the date
of receipt of the Net Cash Proceeds by the Borrower, BTI or any
Subsidiary of the Borrower or BTI from (A) the sale, lease, transfer
or other disposition of any assets of the Borrower, BTI or any
Subsidiary of the Borrower or BTI (other than leases in the ordinary
course of business or any sale, lease, transfer or other disposition
of assets pursuant to clause (i), (ii), (iv) or (v) of Section
5.02(e)) and (B) any Extraordinary Receipt received by, or paid to, or
for the account of, the Borrower, BTI or any Subsidiary of the
Borrower or BTI and not otherwise included in clause (A) above, prepay
an aggregate principal amount of the Advances comprising part of the
same Borrowings in an amount equal to the amount of such Net Cash
Proceeds.
(iii) The Borrower shall, within two Business Days after the date
of receipt, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings in an amount equal to 33.33% of
the proceeds received on account of any offering of any Equity
Interests of the Parent or any other Loan Party on or after September
30, 2004, except for Equity Interests consisting of any (A)
Reorganization Securities, (B) Merger Agreement Securities, (C) Common
Stock of the Parent, the proceeds of the issuance and sale of which
are applied to refinance the Series A Preferred Stock or Series B
Preferred Stock at not more than 100% of liquidation value plus
accrued dividends, or (D) Equity Plan Securities.
(iv) The Borrower shall, within two Business Days after the date
of receipt (or if later, within two Business Days after the Amendment
Effective Date), prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings in an amount equal to the Net
Advance Payments received by the Borrower under indefeasible right to
use agreements relating to excess raised floor space at the
e/\deltacom facility located in Suwanee, Georgia, which are entered
into by the Borrower after August 22, 2002; provided, that until NTFC
and General Electric Capital Corporation (solely in its capacity as
lessor under the GE Capital Lease) have received payment of an
aggregate of $6,000,000 under the NTFC Capital Lease and the GECC
Capital Lease since October 29, 2002, as contemplated under Section
1(a)(ii) of the Capital Lease Amendment, the Borrower shall prepay to
the Lenders only 75% of the amount of such Net Advance Payments.
35
(v) The Borrower shall, within 60 days after the date of the
applicable Financial Covenants Certificate, prepay an aggregate
principal amount of the Advances comprising part of the same
Borrowings in an amount equal to the amount by which the actual
Capital Expenditures set forth therein exceeds the maximum Capital
Expenditures for such period, as set forth in Section 5.02(q).
(vi) The Borrower shall, within 60 days after the date of the
applicable Financial Covenants Certificate, prepay an aggregate
principal amount of the Advances comprising part of the same
Borrowings in an amount necessary to reduce the amount of Advances, as
the case may be, so that the Senior Debt Ratio or the Total Leverage
Ratio shall no longer exceed the maximum Senior Debt Ratio or the
maximum Total Leverage Ratio, as applicable, or so that the Interest
Coverage Ratio shall no longer be less than the minimum Interest
Coverage Ratio, in each case for the applicable period as set forth in
Section 5.02(q).
(vii) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the
principal amount prepaid and shall be applied ratably to (i) each
Facility and (ii) to each Lender under each such Facility based upon
the outstanding principal amount of Advances payable to such Lenders
thereunder and to the installments thereof on a pro rata basis.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time plus (B) the Applicable
Base Rate Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December
during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance plus (B)
the Applicable Eurodollar Rate Margin in effect on the first day of
such Interest Period, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on
the date such Eurodollar Rate Advance shall be Converted or paid in
full.
(b) Default Interest. Upon the occurrence and during the continuance
of a Default, the Borrower shall pay interest on (i) the unpaid principal amount
of each Advance owing to each Lender, payable in arrears on the dates referred
to in clause (a)(i) or (a)(ii) above
36
and on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable under the Loan Documents that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of Advance
on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above
and, in all other cases, on Base Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly after
receipt of a notice of Conversion pursuant to Section 2.08 or a notice of
selection of an Interest Period pursuant to the terms of the definition of
"Interest Period," the Administrative Agent shall give notice to the Borrower
and each Lender of the applicable Interest Period and the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(a)(ii) above.
SECTION 2.07. Fees. Commencing on the Amendment Effective Date and
until the Termination Date, the Borrower shall pay to the Administrative Agent
all fees, including, without limitation, administration and transition fees, in
the amounts set forth in Schedule VI to the Successor Agent Agreement.
SECTION 2.08. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Section 2.09,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than $10,000,000 and integral multiples of $10,000,000 in
excess thereof, no Conversion of any Advances shall result in more than five
separate Borrowings and each Conversion of Advances comprising part of the same
Borrowing under any Facility shall be made ratably (i) to each Facility and (ii)
to each Lender under each such Facility based upon the respective Commitments of
the Lenders thereunder and to the installments thereof on a pro rata basis. Each
such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances.
37
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with
the provisions contained in the definition of "Interest Period" in
Section 1.01, the Administrative Agent will forthwith so notify the
Borrower and the Lenders, whereupon each such Eurodollar Rate Advance
will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance and (y) the obligation of the Lenders to make, or to
Convert Advances into Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender Party of funding or maintaining
Eurodollar Rate Advances (excluding, for purposes of this Section 2.09, any such
increased costs resulting from (x) Taxes or Other Taxes (as to which Section
2.11 shall govern) and (y) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender Party is organized or
has its Applicable Lending Office or any political subdivision thereof), then
the Borrower shall from time to time, upon demand by such Lender Party (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender Party additional amounts sufficient to
compensate such Lender Party for such increased cost; provided, however, that a
Lender Party claiming additional amounts under this Section 2.09(a) agrees to
use reasonable efforts (consistent with internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost that may thereafter accrue and would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party. A certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender Party, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend hereunder and other
commitments of such type, then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender
Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence
38
of such Lender Party's commitment to lend hereunder. A certificate as to such
amounts submitted to the Borrower by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least a majority of the then aggregate unpaid
principal amount thereof notify the Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Lenders of making, funding or maintaining their Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Appropriate Lenders, whereupon (i) each such
Eurodollar Rate Advance under such Facility will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance
and (ii) the obligation of the Appropriate Lenders to Convert Advances into
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrower that such
Lender has determined that the circumstances causing such suspension no longer
exist; provided, however, that, before making any such demand, such Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to fund or maintain Eurodollar Rate Advances and
would not, in the judgment of such Lenders, be otherwise disadvantageous to such
Lender.
SECTION 2.10. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.14), not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrower is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in
39
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(c) All computations of interest based on the Base Rate and fees shall
be made by the Administrative Agent on the basis of a year of 365 or 366 days,
as the case may be, and all computations of interest based on the Eurodollar
Rate and of fees shall be made by the Administrative Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest, fees or commissions are payable. Each determination by the
Administrative Agent of an interest rate, fee or commission hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such
40
funds to each Lender Party ratably in accordance with such Lender Party's
proportionate share of the principal amount of all outstanding Advances, in
repayment or prepayment of such of the outstanding Advances or other Obligations
owed to such Lender Party, and for application to such principal installments,
as the Administrative Agent shall direct.
SECTION 2.11. Taxes. (a) Any and all payments by or for the account of
any Loan Party hereunder, or in respect of the Notes or any other Loan Document,
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and each Agent, taxes that are imposed on its
overall net income by the United States and taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender Party or such Agent, as
the case may be, is organized or any political subdivision thereof and, in the
case of each Lender Party, taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of
such Lender Party's Applicable Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "Taxes"). If a Loan Party shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note or other Loan Documents to any Lender Party or any Agent, (i) the sum
payable by such Loan Party shall be increased as may be necessary so that after
such Loan Party and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.11) such Lender Party or such Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Loan Party shall make all such deductions and (iii) such Loan Party shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, each Loan Party shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or other Loan Documents
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement, the Notes or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) Each Loan Party shall indemnify each Lender Party and each Agent
for and hold them harmless against the full amount of Taxes and Other Taxes, and
for the full amount of taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.11, imposed on or paid by such Lender Party or such
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender Party or
such Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
relevant Loan Party shall furnish to the Administrative Agent, at its address
referred to in Section 9.02, the original or a certified copy of a receipt
evidencing such payment. In the case of any payment hereunder or under the Notes
or other Loan Documents by or on behalf of such Loan Party
41
through an account or branch outside the United States or by or on behalf of
such Loan Party by a payor that is not a United States person, if such Loan
Party determines that no Taxes are payable in respect thereof, such Loan Party
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.11, the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender, as the case may
be, and on the date of the Assignment and Acceptance pursuant to which it
becomes a Lender Party in the case of each other Lender Party, and from time to
time thereafter as requested in writing by the relevant Loan Party (but only so
long thereafter as such Lender Party remains lawfully able to do so), provide
each of the Administrative Agent and each Loan Party with two original Internal
Revenue Service forms W-8ECI or W-8 or W-8BEN (and, if applicable to the
exemption claimed by a Lender Party that delivers a form W-8 or W-8BEN, a
certificate representing that such Lender Party is not a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder,
within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, of the
Loan Party and is not a controlled foreign corporation related to the Loan
Party, within the meaning of Section 864(d)(4) of the Internal Revenue Code), as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes (or, in the case of a Lender Party providing a form W-8
or W-8BEN, certifying that such Lender Party is a foreign corporation,
partnership, estate or trust). If the forms provided by a Lender Party at the
time such Lender Party first becomes a party to this Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, at the effective
date of the Assignment and Acceptance pursuant to which a Lender Party becomes a
party to this Agreement, the Lender Party assignor was entitled to payments
under subsection (a) of this Section 2.11 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date. If any form or document referred to in this subsection
(e) requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form ▇-▇, ▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ (or the related certificate described
above), that the Lender Party reasonably considers to be confidential, the
Lender Party shall give notice thereof to the Loan Party and shall not be
obligated to include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed to
provide the relevant Loan Party with the appropriate form described in
subsection (e) above (other than
42
if such failure is due to a change in law occurring after the date on which a
form originally was required to be provided or if such form otherwise is not
required under subsection (e) above), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.11 with respect to
Taxes imposed by reason of such failure; provided, however, that should a Lender
Party become subject to Taxes because of its failure to deliver a form required
hereunder, the relevant Loan Party shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) The Loan Party may replace any Lender Party that has requested
additional amounts under this Section 2.11, by written notice to such Lender
Party and the Administrative Agent and identifying one or more persons each of
which shall be reasonably acceptable to the Administrative Agent (each, a
"Replacement Lender Party", and collectively, the "Replacement Lender Parties")
to replace such Lender Party (the "Replaced Lender Party"); provided, that (i)
the notice from such Loan Party to the Replaced Lender Party and the
Administrative Agent provided for herein above shall specify an effective date
for such replacement (the "Replacement Effective Date"), which shall be at least
five (5) Business Days after such notice is given and (ii) as of the relevant
Replacement Effective Date, each Replacement Lender Party shall enter into an
Assignment and Acceptance with the Replaced Lender Party pursuant to Section
9.07(a) (but shall not be required to pay the processing fee otherwise payable
to the Administrative Agent pursuant to Section 9.07(a)), pursuant to which such
Replacement Lender Parties collectively shall acquire, in such proportion among
them as they may agree with such Loan Party and the Administrative Agent, all
(but not less than all) of the Commitments and outstanding Advances of the
Replaced Lender Party, and, in connection therewith, shall pay to the Replaced
Lender Party, as the purchase price in respect thereof, an amount equal to the
sum as of the Replacement Effective Date, without duplication, of (x) the unpaid
principal amount of, and all accrued but unpaid interest on, all outstanding
Advances of the Replaced Lender Party and (y) the Replaced Lender Party's
ratable share of all accrued but unpaid fees owing to the Replaced Lender Party
hereunder.
SECTION 2.12. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 9.07) (a) on account of Obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the
43
case may be, as shall be necessary to cause such purchasing Lender Party to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender Party, such purchase from each other Lender Party shall be
rescinded and such other Lender Party shall repay to the purchasing Lender Party
the purchase price to the extent of such Lender Party's ratable share (according
to the proportion of (i) the purchase price paid to such Lender Party to (ii)
the aggregate purchase price paid to all Lender Parties) of such recovery
together with an amount equal to such Lender Party's ratable share (according to
the proportion of (i) the amount of such other Lender Party's required repayment
to (ii) the total amount so recovered from the purchasing Lender Party) of any
interest or other amount paid or payable by the purchasing Lender Party in
respect of the total amount so recovered; provided, further, that, so long as
the Obligations under the Loan Documents shall not have been accelerated, any
excess payment received by an Appropriate Lender shall be shared on a pro rata
basis only with other Appropriate Lenders. The Borrower agrees that any Lender
Party so purchasing an interest or participating interest from another Lender
Party pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such interest or participating interest, as the case may be, as fully as if
such Lender Party were the direct creditor of the Borrower in the amount of such
interest or participating interest, as the case may be.
SECTION 2.13. Intentionally omitted.
SECTION 2.14. Defaulting Lenders. (a) Intentionally omitted.
(b) In the event that, at any one time, (i) any Lender Party shall be
a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Agent or any of the other Lender Parties and (iii) the Borrower shall make
any payment hereunder or under any other Loan Document to the Administrative
Agent for the account of such Defaulting Lender, then the Administrative Agent
may, on its behalf or on behalf of such other Agents or such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, such other Agents and such other
Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amounts
then owing to the Administrative Agent hereunder; and
44
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.14.
(c) In the event that, at any one time, (i) any Lender Party shall be
a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Amount and (iii) the Borrower, any Agent or any other Lender Party shall be
required to pay or distribute any amount hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower or
such Agent or such other Lender Party shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in a
segregated account with the Administrative Agent, in the name and under the
control of the Administrative Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be the Administrative Agent's standard terms applicable to escrow
accounts maintained with it. Any interest credited to such account from time to
time shall be held by the Administrative Agent in escrow under, and applied by
the Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent or any
other Lender Party, as and when such Advances or amounts are required to be made
or paid and, if the amount so held in escrow shall at any time be insufficient
to make and pay all such Advances and amounts required to be made or paid at
such time, in the following order of priority:
(i) first, to the Administrative Agent for any amounts then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) second, to any other Lender Parties for any amount then due
and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with
45
respect to such Lender Party shall be distributed by the Administrative Agent to
such Lender Party and applied by such Lender Party to the Obligations owing to
such Lender Party at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.14 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender and that any Agent or any Lender Party may
have against such Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.15. Evidence of Debt; Register. (a) Each Lender Party shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Advance
owing to such Lender Party from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender Party to the Borrower (with a
copy of such notice to the Administrative Agent) to the effect that a promissory
note or other evidence of indebtedness is required or appropriate in order for
such Lender Party to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to, or to be made by, such Lender Party, the
Borrower shall promptly execute and deliver to such Lender Party, with a copy to
the Administrative Agent, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note, a ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Note and a
Tranche 3 Term B Note, as applicable, in substantially the form of Exhibits ▇-▇,
▇-▇ and A-3 hereto, respectively, payable to the order of such Lender Party in a
principal amount equal to the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇
Advances and the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇ Advances, respectively, payable to such Lender
Party. The Lenders hereby agree that any promissory notes evidencing the
Advances issued by the Borrower to any Lender prior to the date hereof shall be
deemed null and void and of no further force or effect for any and all purposes,
and each Lender that is a holder of any such note agrees to surrender such note
to the Borrower. All references to Notes in the Loan Documents shall mean Notes,
if any, to the extent issued hereunder.
(b) The Administrative Agent shall maintain at its address referred to
in Section 9.02 a register for the recordation of the names and addresses of the
Lender Parties and the Commitment under each Facility of each Lender Party from
time to time (the "Register"). The Register maintained by the Administrative
Agent pursuant to this Section shall also include a control account, and a
subsidiary account for each Lender Party, in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made hereunder, the
Type of Advances comprising such Borrowing and, if appropriate, the Interest
Period applicable thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
Party hereunder, and (iv) the amount of any sum received by the Administrative
Agent from the Borrower hereunder and each Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each
46
Lender Party and, in the case of such account or accounts, such Lender Party,
under this Agreement, absent manifest error; provided, however, that the failure
of the Administrative Agent or such Lender Party to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement.
(d) The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Agents and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Agent or any Lender Party at any
reasonable time and from time to time upon reasonable prior notice.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Amendment Effective Date.
The occurrence of the Amendment Effective Date is subject to the satisfaction of
the following conditions precedent:
(a) The Amendment Effective Date shall occur on or before November 30,
2003.
(b) The Administrative Agent shall have received the following, each
dated the Amendment Effective Date (unless otherwise specified), in form
and substance satisfactory to the Administrative Agent (unless otherwise
specified) and (except for the Notes) in sufficient copies for each Lender
Party:
(i) The Notes payable to the order of the Lenders, to the extent
requested by any Lender pursuant to Section 2.15(a).
(ii) A second amended and restated security agreement in
substantially the form of Exhibit D hereto (together with each other
security agreement and security agreement supplement delivered
pursuant to Section 5.01(j), in each case as amended, the "Security
Agreement"), duly executed by each Loan Party, together with:
(A) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,
(B) acknowledgment copies or stamped receipt copies of
proper financing statements (or proper amendments to any
financing statements filed pursuant to the First Amended ITCD
Credit Agreement), duly filed on or before the Amendment
Effective Date under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may
47
reasonably deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created
under the Security Agreement, covering the Collateral described
in the Security Agreement,
(C) completed requests for information, dated on or before
the Amendment Effective Date, listing the financing statements
referred to in clause (B) above and all other effective financing
statements filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together with copies of
such other financing statements,
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may reasonably deem necessary or desirable
in order to perfect and protect the Liens created thereby,
(E) evidence of the insurance required by the terms of the
Security Agreement,
(F) copies of the Assigned Agreements referred to in the
Security Agreement,
(G) Intentionally omitted, and
(H) evidence that all other action that the Administrative
Agent may deem reasonably necessary or desirable in order to
perfect and protect the first priority liens and security
interests created under the Security Agreement has been taken
(including, without limitation, receipt of duly executed payoff
letters, UCC-3 termination statements, landlords' and bailees'
waiver and consent agreements and account control and cash
management agreements in form and substance satisfactory to the
Administrative Agent).
(iii) The Intercreditor and Subordination Agreement in
substantially the form of Exhibit E hereto, duly executed by each of
the parties thereto.
(iv) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the Transactions and each Loan
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental and other
third party approvals and consents, if any, with respect to the
Transactions and each Loan Document to which it is or is to be a
party.
(v) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Loan Party, dated reasonably
near the date of the Amendment Effective Date, certifying (A) as to a
true and correct copy of the charter of such Loan Party and each
amendment thereto on file in such
48
Secretary's office and (B) that (1) such amendments are the only
amendments to such Loan Party's charter on file in such Secretary's
office, (2) to the extent that the Secretary of State of the
applicable jurisdiction of incorporation provides such a
certification, such Loan Party has paid all franchise taxes to the
date of such certificate and (C) such Loan Party is duly incorporated
and in good standing or presently subsisting under the laws of the
State of the jurisdiction of its incorporation.
(vi) A copy of a certificate of the Secretary of State in each
jurisdiction in which each Loan Party is qualified to do business,
dated reasonably near the date of the Amendment Effective Date,
stating that such Loan Party is duly qualified and in good standing as
a foreign corporation in such State and has filed all annual reports
required to be filed to the date of such certificate.
(vii) A certified copy of the articles of merger as filed with
the Secretary of State of the State of North Carolina certifying that
the Merger has been consummated.
(viii) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or
any Assistant Secretary, dated the Amendment Effective Date (the
statements made in which certificate shall be true on and as of the
Amendment Effective Date), certifying as to (A) the absence of any
amendments to the charter of such Loan Party since the date of the
Secretary of State's certificate referred to in Section 3.01(b)(iv),
except as required to consummate the Merger, (B) a true and correct
copy of the bylaws of such Loan Party as in effect on the date on
which the resolutions referred to in Section 3.01(b)(iii) were adopted
and on the Amendment Effective Date, (C) the due incorporation and
good standing or valid existence of such Loan Party as a corporation
organized under the laws of the jurisdiction of its incorporation, and
the absence of any proceeding for the dissolution or liquidation of
such Loan Party, (D) the truth of the representations and warranties
contained in the Loan Documents as though made on and as of the
Amendment Effective Date, (E) the absence of any event occurring and
continuing, or resulting from entering into this Agreement, that
constitutes a Default and (F) except for any event relating to the
consummation of the Merger Transactions to be consummated on the
Merger Closing Date, the absence of any event occurring and continuing
that constitutes a Default (as defined in the First Amended ITC Credit
Agreement) under the First Amended ITC Credit Agreement.
(ix) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Loan Document to
which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.
(x) Certificates, in substantially the form of Exhibit F hereto,
attesting to the Solvency of each Loan Party after giving effect to
the Transactions and the
49
Merger Transactions to be effected on the Merger Closing Date, from
the Chief Financial Officer of such Loan Party.
(xi) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lender Parties shall have
reasonably requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, audited annual financial statements as of and for Fiscal
Year 2002, and interim financial statements dated the end of the most
recent fiscal quarter for which financial statements are available
(or, in the event the Lender Parties' due diligence review reveals
material changes since such financial statements, as of a later date
within 45 days before the Amendment Effective Date), pro forma
financial statements of the Borrower and forecasts prepared by
management of the Borrower, in form and substance reasonably
satisfactory to the Lender Parties, with respect to Fiscal Year 2003.
(xii) Evidence of insurance naming the Collateral Agent as
additional insured and loss payee with such responsible and reputable
insurance companies or associations, and in such amounts and covering
such risks, as is reasonably satisfactory to the Lender Parties.
(xiii) Favorable opinions of counsel for the Loan Parties, in
substantially the form of Exhibit G hereto and as to such other
matters as any Lender Party through the Administrative Agent may
reasonably request.
(xiv) A copy of all the documents relating to the Merger
Transactions, each duly executed by the parties thereto.
(c) The Lender Parties shall be satisfied with the corporate and legal
structure and capitalization of each Loan Party and each of its
Subsidiaries whose Equity Interests are being pledged pursuant to the Loan
Documents, including the terms and conditions of the charter, bylaws and
each class of Equity Interest in each Loan Party and each such Subsidiary
and of each agreement or instrument relating to such structure or
capitalization.
(d) The Lender Parties shall be satisfied that all Surviving Debt
shall be on terms and conditions reasonably satisfactory to the Lender
Parties.
(e) Before giving effect to the Transactions, there shall have
occurred no Material Adverse Change since December 31, 2002.
(f) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could reasonably be expected to have a Material Adverse Effect other than
the matters described on Schedule 4.01(f) hereto (the
50
"Disclosed Litigation") or (ii) could reasonably be expected to have a
Material Adverse Effect on the consummation of the Transactions or the
Merger Transactions.
(g) All governmental and third party consents and approvals necessary
in connection with the Transactions shall have been obtained (without the
imposition of any conditions that are not reasonably acceptable to the
Lender Parties) and shall remain in effect (other than any consents and
approvals the absence of which, either individually or in the aggregate,
would not have a Material Adverse Effect); all applicable waiting periods
in connection with the Transactions shall have expired without any action
being taken by any competent authority (other than any action which either
individually or in the aggregate with all such actions would not reasonably
be expected to have a Material Adverse Effect), and no law or regulation
shall be applicable in the reasonable judgment of the Lender Parties, in
each case that restrains, prevents or imposes materially adverse conditions
upon the Transactions or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
(h) All Pre-Amendment Information shall be true, correct and complete
in all material aspects as of the dates specified therein and no additional
information shall have come to the attention of the Loan Parties that could
reasonably be expected to have a Material Adverse Effect.
(i) The Lender Parties shall have completed a due diligence
investigation of the Loan Parties in scope, and with results, satisfactory
to the Lender Parties, and nothing shall have come to the attention of the
Lender Parties during the course of such due diligence investigation to
lead them to believe that the Transactions will have a Material Adverse
Effect; without limiting the generality of the foregoing, the Lender
Parties shall have been given such access to the management, records, books
of account, contracts and properties of the Loan Parties as they shall have
requested.
(j) The Borrower shall have paid (i) all accrued fees of the
Administrative Agent, the Lender Parties and the Agents (including the
accrued reasonable fees and expenses of legal counsel and financial
advisors to the Administrative Agent) and (ii) all accrued and unpaid
interest, expenses and fees outstanding with respect to the Original BTI
Credit Agreement.
(k) The Required Lenders shall be reasonably satisfied that (i) the
Parent and its Subsidiaries will be able to meet their respective
obligations under all employee and retiree welfare plans, (ii) the employee
benefit plans of the Parent and its ERISA Affiliates are, in all material
respects, funded in accordance with the minimum statutory requirements,
(iii) no "reportable event" (as defined in ERISA, but excluding events for
which reporting has been waived) has occurred as to any such employee
benefit plan and (iv) no termination of, or withdrawal from, any such
employee benefit plan has occurred or is contemplated that could reasonably
be expected to result in a material liability.
51
(l) The Merger Transactions to be consummated on the Merger Closing
Date shall have been consummated in accordance with the Merger Agreement.
(m) The Second Capital Lease Amendment shall have become effective.
(n) The parties shall have executed and delivered the Second Lien Loan
Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows as of the date hereof and the
Amendment Effective Date:
(a) Upon consummation of, and after giving effect to, the Merger
Transactions to be consummated on the Merger Closing Date, each Loan Party
and each of its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and as
currently proposed to be conducted, except where the failure to have such
power or authority would not be reasonably likely to have a Material
Adverse Effect. All of the outstanding Equity Interests in the Borrower
have been validly issued, are fully paid and non-assessable and are owned
by the Parent free and clear of all Liens, except those created under the
Loan Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party as of consummation of, and
after giving effect to, the Merger Transactions to be consummated on the
Merger Closing Date, showing as of the date hereof (as to each such
Subsidiary) the jurisdiction of its incorporation, the number of shares of
each class of its Equity Interests authorized, and the number outstanding,
on the date hereof and the percentage of each such class of its Equity
Interests owned (directly or indirectly) by such Loan Party and the number
of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding Equity Interests in each Loan Party's Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by such
Loan Party or one or more of its Subsidiaries free and clear of all Liens,
except those created under the Loan Documents.
(c) Upon consummation of, and after giving effect to, the Merger
Transactions to be consummated on the Merger Closing Date, the execution,
delivery and
52
performance by each Loan Party of each Loan Document to which it is or is
to be a party, and the consummation of the Transactions, are within such
Loan Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's charter or
bylaws, (ii) violate any law, rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a default
under, any loan agreement, indenture, mortgage, deed of trust, or material
contract, lease or other instrument binding on or affecting any Loan Party,
any of its Subsidiaries or any of their properties or (iv) except for the
Liens created under the Loan Documents and the Second Lien Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of any Loan Party or any of its
Subsidiaries. Upon consummation of, and after giving effect to, the Merger
Transactions to be consummated on the Merger Closing Date, no Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) Upon consummation of, and after giving effect to, the Merger
Transactions to be consummated on the Merger Closing Date, no authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body (including, without limitation,
the FCC or any applicable PUC) or any other third party is required for (i)
the due execution, delivery, recordation, filing or performance by any Loan
Party of any Loan Document to which it is or is to be a party, or for the
consummation of the Transactions, (ii) the grant or affirmation by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the
Collateral Documents (including the first priority nature thereof), or (iv)
the exercise by any Agent or any Lender Party of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d) hereto, all of which have
been duly obtained, taken, given or made and are in full force and effect
except (A) as set forth in the Loan Documents or (B) for such
authorizations, approvals, actions, notices and filings which would not
have a Material Adverse Effect if not so made or obtained. All applicable
waiting periods in connection with the Transactions have expired without
any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transactions
or the rights of the Loan Parties or their Subsidiaries freely to transfer
or otherwise dispose of, or to create any Lien on, any properties now owned
or hereafter acquired by any of them.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto. This Agreement is, and each other Loan Document when
delivered hereunder will be, the legal, valid and binding obligation of
each Loan Party thereto, enforceable against such Loan Party in accordance
with its terms.
53
(f) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or, to the Borrower's knowledge, threatened
before any court, governmental agency or arbitrator that (i) would, alone
or when considered in conjunction with any other actions, suits,
investigation, litigation or proceeding affecting any Loan Party, be
reasonably likely to have a Material Adverse Effect other than the
Disclosed Litigation or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of Transactions,
and there has been no material adverse change in the status, or financial
effect on any Loan Party or any of its Subsidiaries, of or as a result of
the Disclosed Litigation from that described on Schedule 4.01(f) hereto.
(g) The (i) Consolidated balance sheet of the Parent and its
Subsidiaries and the Consolidated balance sheet of BTI and its Subsidiaries
as at December 31, 2002, (ii) the related Consolidated statement of income
and Consolidated statement of cash flows of the Parent and its Subsidiaries
for the Fiscal Year then ended and the related Consolidated statement of
income and Consolidated statement of cash flows of BTI and its Subsidiaries
for the fiscal year ended December 31, 2002, (iii) the Consolidated balance
sheet of the Parent and its Subsidiaries and the Consolidated balance sheet
of BTI and its Subsidiaries as at June 30, 2003, and (iv) the related
Consolidated statement of income and Consolidated statement of cash flows
of the Parent and its Subsidiaries and the related Consolidated statement
of income and Consolidated statement of cash flows of BTI and its
Subsidiaries for the six months then ended, duly certified by the Chief
Financial Officer of the Parent or the Chief Financial Officer of BTI, as
the case may be, copies of which have been furnished to each Lender Party,
fairly present, subject, in the case of such balance sheet as at June 30,
2003, and such statements of income and cash flows for the six months then
ended, to year-end audit adjustments, the Consolidated financial condition
of the Parent and its Subsidiaries or BTI and its Subsidiaries, as the case
may be, as at such date and the Consolidated results of operations of the
Parent and its Subsidiaries or BTI and its Subsidiaries, as the case may
be, for the period ended on such date, all in accordance with GAAP applied
on a consistent basis, and since December 31, 2002 there has been no
Material Adverse Change.
(h) Intentionally omitted.
(i) The Consolidated balance sheets, income statements and cash flows
statements of (i) the Borrower and its Subsidiaries and (ii) BTI and its
Subsidiaries delivered to the Lender Parties pursuant to Section 5.03(e)
were or will be, and the unaudited pro forma financial information about
the Loan Parties after giving effect to the Merger Transactions as
furnished by the Parent on September 19, 2003 to the Securities and
Exchange Commission on Form 8-K was, prepared in good faith on the basis of
the assumptions stated therein, which assumptions were or will be fair in
light of the conditions existing at the time of delivery of such
information, and represented or will represent, at the time of delivery,
the Borrower's best estimate of the future financial performance of the
Loan Parties.
54
(j) No information, exhibit or report furnished by or on behalf of any
Loan Party to any Agent or any Lender Party in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein not
misleading.
(k) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
(l) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other Transactions,
will violate any provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(m) The consummation of the Merger Transactions will not cause a
Material Adverse Effect under any indenture, loan or credit agreement or
any lease or other agreement or instrument or any charter or corporate
restriction to which any Loan Party or any of its Subsidiaries is a party
from and after the Amendment Effective Date.
(n) The Collateral Documents create a valid first priority security
interest in the Collateral, securing the payment of the Secured
Obligations, and at such time as all filings delivered to the Collateral
Agent on the Amendment Effective Date have been duly filed in accordance
with the provisions of the Security Agreement, such first priority security
interest will be perfected. The Loan Parties are the legal and beneficial
owners of the Collateral free and clear of any Lien, except for the Liens
and security interests created or permitted under the Loan Documents.
(o) Upon consummation of, and after giving effect to, the Merger
Transactions to be consummated on the Merger Closing Date, each Loan Party
is and will be, individually and together with its Subsidiaries, Solvent.
(p) (i) Set forth on Schedule 4.01(p) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(ii) No ERISA Event (i) has occurred and is outstanding or (ii)
to the Borrower's knowledge, is reasonably expected to occur, in each
case with respect to any Plan.
(iii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to the
Lender Parties, is complete and
55
accurate and fairly presents the funding status of such Plan, and
since the date of such Schedule B there has been no material adverse
change in such funding status.
(iv) Neither any Loan Party nor any ERISA Affiliate has incurred
or, to the Borrower's knowledge, is reasonably expected to incur any
Withdrawal Liability exceeding $1,000,000 to any Multiemployer Plan.
(v) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no such Multiemployer Plan, to
the Borrower's knowledge, is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(q) (i) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, and no circumstances exist that could (A)
form the basis of an Environmental Action against any Loan Party or any of
its Subsidiaries or any of their properties that could have a Material
Adverse Effect or (B) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(ii) None of the properties currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries is listed or
proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or, to the best of its knowledge, is
adjacent to any such property; there are no and or, to the best of its
knowledge, never have been any underground or aboveground storage
tanks or any surface impoundments, septic tanks, pits, sumps or
lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or, to the best of
its knowledge, operated by any Loan Party or any of its Subsidiaries
or, to the best of its knowledge, on any property formerly owned or
operated by any Loan Party or any of its Subsidiaries; there is no
asbestos or asbestos-containing material on any property currently
owned or, to the best of its knowledge, operated by any Loan Party or
any of its Subsidiaries; and Hazardous Materials have not been
released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party or any of its
Subsidiaries except as specifically permitted under Environmental
Laws.
(iii) Neither any Loan Party nor any of its Subsidiaries is
undertaking, or has completed, either individually or together with
other potentially responsible parties, any investigation or assessment
or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of
any
56
governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of
its Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to any Loan Party or any of
its Subsidiaries.
(r) (i) Except as set forth in Schedule 4.01(r) hereto, neither any
Loan Party nor any of its Subsidiaries is party to any tax sharing
agreement.
(ii) (x) all tax returns and all material statements, reports and
forms (including estimated tax or information returns) (collectively,
the "Tax Returns") required to be filed with any taxing authority by,
or with respect to, each Loan Party and its Subsidiaries have been
timely filed in accordance with all applicable laws and, as of time of
filing, each Tax Return was accurate and complete and correctly
reflected the facts regarding income, business, assets, operations and
the status of each Loan Party and its Subsidiaries; (y) each Loan
Party and its Subsidiaries has timely paid or made adequate provision
for payment of all taxes that are shown as due and payable on Tax
Returns that have been so filed or that are otherwise required to be
paid, including without limitation, assessments, interest and
penalties (other than taxes which are being contested in good faith
and for which adequate reserves are reflected on the financial
statements delivered hereunder); and (z) each Loan Party and its
Subsidiaries have made adequate provision for all taxes payable by
such Loan Party and its Subsidiaries for which no Tax Return has yet
been filed or which are otherwise due.
(iii) Set forth on Part I of Schedule 4.01(r) hereto is a
complete and accurate list, as of the date hereof, of each taxable
year of each Loan Party and each of its Subsidiaries and Affiliates
for which Federal income tax returns have been filed and for which the
expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an
"Open Year").
(iv) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan Party and
each of its Subsidiaries and Affiliates proposed by the Internal
Revenue Service with respect to Open Years does not exceed $35,000.
Set forth on Part II of Schedule 4.01(r) hereto is a complete and
accurate description, as of the date hereof, of each such item that
separately, for all such Open Years, together with applicable interest
and penalties, exceeds $100,000. To the Borrower's knowledge, no
issues have been raised by the Internal Revenue Service in respect of
Open Years that, in the aggregate, could be reasonably likely to have
a Material Adverse Effect.
(v) Except as set forth in Schedule 4.01(r) hereto, the aggregate
unpaid amount, as of the date hereof, of adjustments to the state,
local and foreign tax liability of each Loan Party and its
Subsidiaries and Affiliates proposed by all
57
state, local and foreign taxing authorities (other than amounts
arising from adjustments to Federal income tax returns) does not
exceed $35,000. No issues have been raised by such taxing authorities
that, in the aggregate, could be reasonably likely to have a Material
Adverse Effect.
(s) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries have been 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 could be reasonably likely to have a
Material Adverse Effect.
(t) Intentionally omitted.
(u) Set forth on Schedule 4.01(u) hereto is a complete and accurate
list of all Surviving Debt, showing as of the date hereof the obligor and
the principal amount outstanding thereunder, the maturity date thereof and
the amortization schedule therefor.
(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all Liens on the property or assets of any Loan Party or any of its
Subsidiaries, showing as of the date hereof the lienholder thereof, the
principal amount of the obligations secured thereby and the property or
assets of such Loan Party or such Subsidiary subject thereto.
(w) Set forth on Schedule 4.01(w) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and gross book and fair
value thereof. Each Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such real property, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.
(x) Set forth on Schedule 4.01(x) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries
on the date hereof, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
(z) Set forth on Schedule 4.01(z) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and copyrights,
and all applications therefor and licenses thereof, of each Loan Party or
any of its Subsidiaries, showing as of the date hereof the jurisdiction in
which registered, the registration number, the date of registration and the
expiration date.
58
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate
list of all Material Contracts of each Loan Party and its Subsidiaries
involving aggregate consideration payable to or by such Loan Party or its
Subsidiaries of $20,000,000 or more in any year. Each such Material
Contract, together with each other Material Contract which shall be set
forth on Schedule 4.01(aa) hereto pursuant to Section 5.01(n)(iii), shows
or shall show as of the date hereof the parties, subject matter and term
thereof. Each such Material Contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise
modified, is in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms, and except as set
forth on Schedule 4.01(aa) hereto, and subject to the consummation of, and
after giving effect to, the Merger Transactions to be consummated on the
Merger Closing Date, there exists no default under any Material Contract by
any party thereto.
ARTICLE V
COVENANTS OF THE PARENT
SECTION 5.01. Affirmative Covenants. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender Party shall have any Commitment hereunder, the Parent shall:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA, the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970, the rules
and regulations of the FCC and each applicable PUC.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or discharge
any such tax, assessment, charge or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of
its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to
59
remove and clean up all Hazardous Materials from any of its properties, to
the extent required by and in accordance with all Environmental Laws;
provided, however, that neither the Borrower nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Parent or such
Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that the
Parent and its Subsidiaries may consummate the Merger, the merger of FS
Multimedia, Inc. with and into another Subsidiary of the Parent and any
other merger or consolidation permitted under Section 5.02(d) and provided,
further, that neither the Parent nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Borrower or such Subsidiary
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Parent or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material
respect to the Parent, such Subsidiary or the Lender Parties.
(f) Visitation Rights. At any reasonable time upon prior reasonable
notice and from time to time, permit any of the Agents or any of the Lender
Parties, or any agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Parent and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Parent and any of its
Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Parent and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(i) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of
60
their Affiliates on terms that are fair and reasonable and no less
favorable to the Parent or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate. This
Section 5.01(i) shall not limit the consummation of the Merger
Transactions.
(j) Covenant to Guarantee Obligations and Give Security. Upon (x) the
request of the Collateral Agent following the occurrence and during the
continuation of a Default, (y) the formation or acquisition of any new
direct or indirect Subsidiaries by any Loan Party or (z) the acquisition of
any property acquired for a purchase price in excess of $10,000,000 in any
Fiscal Year and $50,000,000 in the aggregate over the term of this
Agreement by any Loan Party, and such property, in the judgment of the
Collateral Agent, shall not already be subject to a perfected first
priority security interest in favor of the Collateral Agent for the benefit
of the Secured Parties, then the Borrower shall, in each case at the
Borrower's expense:
(i) in connection with the formation or acquisition of a
Subsidiary, within 30 days after such formation or acquisition, cause
each such Subsidiary, and cause each direct and indirect parent of
such Subsidiary (if it has not already done so), to duly execute and
deliver to the Collateral Agent a guaranty or guaranty supplement, in
form and substance satisfactory to the Collateral Agent, guaranteeing
the other Loan Parties' obligations under the Loan Documents,
(ii) within 30 days after such request, formation or acquisition,
furnish to the Collateral Agent a description of the real and personal
properties of the Loan Parties and their respective Subsidiaries in
detail satisfactory to the Collateral Agent,
(iii) within 60 days after such request, formation or
acquisition, duly execute and deliver, and cause each such Subsidiary
and each direct and indirect parent of such Subsidiary (if it has not
already done so) to duly execute and deliver, to the Collateral Agent
mortgages, pledges, assignments, security agreement supplements and
other security agreements, as specified by and in form and substance
satisfactory to the Collateral Agent, securing payment of all the
Obligations of the applicable Loan Party, such Subsidiary or such
parent, as the case may be, under the Loan Documents and constituting
Liens on all such properties,
(iv) within 60 days after such request, formation or acquisition,
take, and cause such Subsidiary or such parent to take, whatever
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be
necessary or advisable in the opinion of the Collateral Agent to vest
in the Collateral Agent (or in any representative of the Collateral
Agent designated by it) valid and subsisting Liens on the properties
purported to be subject to the mortgages, pledges, assignments,
security agreement
61
supplements and security agreements delivered pursuant to this Section
5.01(j), enforceable against all third parties in accordance with
their terms,
(v) within 60 days after such request, formation or acquisition,
deliver to the Collateral Agent, upon the request of the Collateral
Agent in its sole discretion, a signed copy of a favorable opinion,
addressed to the Collateral Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to the Collateral
Agent as to the matters contained in clauses (i), (iii) and (iv)
above, as to such guaranties, guaranty supplements, mortgages,
pledges, assignments, security agreement supplements and security
agreements being legal, valid and binding obligations of each Loan
Party thereto enforceable in accordance with their terms, as to the
matters contained in clause (iv) above, as to such recordings,
filings, notices, endorsements and other actions being sufficient to
create valid perfected Liens on such properties, and as to such other
matters as the Collateral Agent may reasonably request,
(vi) within 60 days after such request, formation or acquisition,
or as promptly as practicable thereafter, deliver, upon the request of
the Collateral Agent in its sole discretion, to the Collateral Agent
with respect to each parcel of real property owned by the entity that
is the subject of such request, formation or acquisition such title
reports, surveys and engineering, soils and other reports, and
environmental assessment reports, as may be prepared in the ordinary
course of business by such entity, provided, however, that to the
extent that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such
real property, such items shall, promptly after the receipt thereof,
be delivered to the Collateral Agent,
(vii) upon the occurrence and during the continuance of a
Default, promptly cause to be deposited any and all cash dividends
paid or payable to it or any of its Subsidiaries from any of its
Subsidiaries from time to time into the Collateral Account, and with
respect to all other dividends paid or payable to it or any of its
Subsidiaries from time to time, promptly execute and deliver, or cause
such Subsidiary to promptly execute and deliver, as the case may be,
any and all further instruments and take or cause such Subsidiary to
take, as the case may be, all such other action as the Collateral
Agent may deem necessary or desirable in order to obtain and maintain
from and after the time such dividend is paid or payable a perfected,
first priority lien on and security interest in such dividends, and
(viii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all
such other action as the Collateral Agent may deem reasonably
necessary or desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such guaranties, mortgages,
pledges, assignments, security agreement supplements and security
agreements.
62
(k) Further Assurances. (i) Promptly upon request by any Agent, or any
Lender Party through the Administrative Agent, correct, and cause each of
its Subsidiaries promptly to correct, any material defect or error that may
be discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof, and
(ii) Promptly upon request by any Agent, or any Lender Party
through the Administrative Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as any
Agent, or any Lender Party through the Administrative Agent, may
reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest
extent permitted by applicable law, subject any Loan Party's or any of
its Subsidiaries' properties, assets, rights or interests to the Liens
now or hereafter intended to be covered by any of the Collateral
Documents, (C) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and any of the Liens
intended to be created thereunder and (D) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto
the Secured Parties the rights granted or now or hereafter intended to
be granted to the Secured Parties under any Loan Document or under any
other instrument executed in connection with any Loan Document to
which any Loan Party or any of its Subsidiaries is or is to be a
party, and cause each of its Subsidiaries to do so. Notwithstanding
the foregoing, no Loan Party shall be required, solely pursuant to the
provisions of this Section 5.01(k), to encumber any assets which were
not otherwise required to be encumbered on the Amendment Effective
Date or pursuant to Section 5.01(j).
(l) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which the Borrower or any of its Subsidiaries is a party, keep such
leases in full force and effect and not allow such leases to lapse or be
terminated or any rights to renew such leases to be forfeited or cancelled,
notify the Administrative Agent of any default by any party with respect to
such leases and cooperate with the Administrative Agent in all respects to
cure any such default, and cause each of its Subsidiaries to do so, except
in each of the foregoing cases where the failure to do so would not have a
Material Adverse Effect.
(m) Performance of Material Contracts. Perform and observe all the
terms and provisions of each Material Contract to be performed or observed
by it, including, without limitation, Section 8.21 of the Merger Agreement,
maintain each such Material Contract in full force and effect until the
cancellation or termination thereof in accordance with its terms, enforce
each such Material Contract in accordance with its terms, take all such
action to such end as may be from time to time reasonably requested by the
Administrative Agent and, upon request of the Administrative Agent, make to
each other party to each such Material Contract such demands and requests
for
63
information and reports or for action as any Loan Party or any of its
Subsidiaries is entitled to make under such Material Contract, and cause
each of its Subsidiaries to do so, except in each of the foregoing cases
where the failure to do so would not have a Material Adverse Effect.
(n) Conditions Subsequent. (i) With respect to (A) any newly-acquired
Unencumbered Parcel with a gross book value in excess of $1,000,000, or (B)
any Unencumbered Parcel owned by any Loan Party as of the Amendment
Effective Date in which any such Loan Party has invested such that the
gross book value of the land and any buildings thereon after the investment
is completed is greater than $1,000,000, the Loan Parties shall deliver to
the Administrative Agent, within 90 days after the closing of any such
acquisition in clause (A) above or of any such investment in clause (B)
above with respect to such property, the following, each dated such day
(unless otherwise specified) in form and substance satisfactory to the
Lenders: deeds of trust, trust deeds, mortgages, leasehold mortgages and
leasehold deeds of trust in form reasonably satisfactory to the
Administrative Agent (together with the Assignments of Leases and Rents
referred to therein and each other mortgage delivered pursuant to Section
5.01(j), in each case as amended, the "Mortgages"), duly executed by the
appropriate Loan Party, together with:
(A) evidence that counterparts of the Mortgages have been
duly recorded in all filing or recording offices that the
Administrative Agent may reasonably deem necessary or desirable
in order to create a valid first and subsisting Lien on the
property described therein in favor of the Collateral Agent for
the benefit of the Secured Parties and that all filing and
recording taxes and fees have been paid,
(B) fully paid American Land Title Association Lender's
Extended Coverage title insurance policies (the "Mortgage
Policies") in form and substance, with endorsements and in amount
reasonably acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free and
clear of all defects (including, but not limited to, mechanics'
and materialmen's Liens) and encumbrances, excepting only
Permitted Encumbrances, and providing for such other affirmative
insurance (including endorsements for future advances under the
Loan Documents and for mechanics' and materialmen's Liens) and
such coinsurance and direct access reinsurance as the
Administrative Agent may reasonably deem necessary or desirable,
(C) American Land Title Association form surveys, certified
to the Administrative Agent and the issuer of the Mortgage
Policies in a manner reasonably satisfactory to the
Administrative Agent by a land surveyor duly registered and
licensed in the States in which the property described in such
surveys is located and acceptable to the Administrative
64
Agent, showing all buildings and other improvements, any off-site
improvements, the location of any easements, parking spaces,
rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other
than encroachments and other defects reasonably acceptable to the
Administrative Agent,
(D) the Assignments of Leases and Rents referred to in the
Mortgages, duly executed by the appropriate Loan Party,
(E) such consents and agreements of lessors and other third
parties, and such estoppel letters and other confirmations, as
the Administrative Agent may reasonably deem necessary or
desirable,
(F) evidence of the insurance required by the terms of the
Mortgages, and
(G) evidence that all other action that the Administrative
Agent may deem reasonably necessary or desirable in order to
create valid first and subsisting Liens on the property described
in the Mortgages has been taken.
(ii) Within 60 days after the request of the Administrative
Agent, at the Borrower's sole cost and expense, the Borrower shall use
its reasonable best efforts to cause the Debt under this Agreement to
be rated by up to two independent rating agencies selected by the
Administrative Agent for the period through the Termination Date. The
rating, if any, of the Debt under this Agreement by up to two
independent rating agencies at any time shall be referred to herein as
the "Debt Rating."
(iii) Within 90 days after the Amendment Effective Date, the
Parent shall supplement Schedule 4.01(aa) hereto to set forth thereon
a complete and accurate list of all Material Contracts of each Loan
Party and its Subsidiaries involving, as of the date hereof, aggregate
consideration payable to or by such Loan Party or its Subsidiaries of
$10,000,000 to $19,999,999 in any year, and shall deliver to the
Administrative Agent such Schedule 4.01(aa) as so supplemented.
(iv) The Borrower shall maintain in a segregated account subject
to an account control agreement in favor of the Collateral Agent on
behalf of the Lenders cash and Cash Equivalents in an amount equal to
not less than (A) $18,500,000 through October 29, 2003 and (B)
$9,250,000 from October 30, 2003 through April 29, 2004 (the "Release
Date"). Subject to the foregoing and the following sentence, no
withdrawals may be made from such account except (A) to make the
Contingent Payments or (B) to make such other payments as the Required
Lenders may authorize in writing in their discretion. Notwithstanding
65
the foregoing, such account shall be terminated and any amounts
remaining therein shall be released to the Borrower promptly after the
earlier to occur of (1) the satisfaction in full of all obligations,
if any, of the Loan Parties with respect to the Contingent Payments,
or (2) the Release Date, if, and only if, any claims that may require
the Borrower to make the Contingent Payments are released, settled or
compromised. Any earnings on the funds on deposit in such account
shall be disbursed to the Borrower from time to time.
SECTION 5.02. Negative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender Party shall have any Commitment hereunder, the Parent shall not, at any
time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Parent or any of its Subsidiaries as debtor, or sign or suffer to exist, or
permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, except:
(i) Liens created under the Loan Documents and the Second Lien
Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on Schedule
4.01(v) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii); provided, that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) Liens securing Subordinated Debt permitted under Section
5.02(b)(ii) which are subordinated and junior in priority to the Liens
securing the Loan Documents and the Second Lien Loan Documents on
terms and conditions acceptable to the Agent and the Required Lenders
and as set forth in the Intercreditor and Subordination Agreement; and
(vi) Liens securing Permitted Refinancings to the extent
permitted under Section 5.02(b), provided, that if the Debt referred
to in clauses (c) and (d) of the definition of "Assumed BTI Debt" is
the subject of an Existing Debt Refinancing, such Debt shall not be
secured by any Lien.
66
(b) Debt. Incur or permit any of its Subsidiaries to Incur any Debt,
provided, that any one or more of the Parent and its Subsidiaries may Incur
Debt as specified in the second paragraph of this Section 5.02(b) if, after
giving effect to the Incurrence of such Debt and the receipt and
application of the proceeds therefrom, the Parent and its Subsidiaries are
in compliance with Section 5.02(q) as of the date of the Incurrence of such
Debt. In the case of Incurrence of Debt pursuant to Section 5.02(b)(ii),
(iii), (v), (vi), (vii) or (viii), or an Incurrence of more than $1,000,000
principal amount of Debt pursuant to Section 5.02(b)(xi), such compliance
with Section 5.02(q) shall be evidenced by delivery of a Financial
Covenants Certificate to the Administrative Agent no less than five
Business Days before the date of such Incurrence.
Subject to the first paragraph of this Section 5.02(b), the Parent and
its Subsidiaries (except as specified below) may Incur each and all of the
following:
(i) with respect to the Parent and its Subsidiaries, Debt under
the Loan Documents and the Second Lien Loan Documents;
(ii) Subordinated Debt of the Parent or the Borrower outstanding
at any time in an aggregate principal amount (together with
refinancings thereof) not to exceed $30,000,000, provided, that (A)
the maturity of such Subordinated Debt is at least three months
following the final maturity date of the Facilities and the final
maturity date under the Second Lien Credit Agreement, (B) the
Administrative Agent and the Required Lenders, and the Administrative
Agent and the Required Lenders under the Second Lien Loan Documents,
are reasonably satisfied that the Parent and its Subsidiaries shall be
in compliance with the provisions of the Loan Documents and the Second
Lien Loan Documents, respectively, for the period from the Incurrence
of such Subordinated Debt through the final maturity date of the
Facilities and the final maturity date under the Second Lien Credit
Agreement, and (C) the Required Lenders, and the Required Lenders
under the Second Lien Loan Documents, have approved the terms of the
subordination relating to such Subordinated Debt, and provided,
further, that, for purposes of this clause (ii), Subordinated Debt
shall not include Debt under the Second Lien Loan Documents;
(iii) (A) Capitalized Leases not to exceed in the aggregate
$70,000,000 (including the GECC Capital Lease, the NTFC Capital Lease
and any other Capitalized Leases constituting Surviving Debt) at any
time outstanding, and (B) in the case of Capitalized Leases to which
any Subsidiary of the Borrower or BTI is a party, Debt of the Borrower
or BTI of the type described in clause (i) of the definition of "Debt"
guaranteeing the Obligations of such Subsidiary under such Capitalized
Leases;
(iv) the Surviving Debt;
(v) Debt of the Parent so long as (A)(1) a sufficient amount of
cash to pay interest on the Facilities for the next succeeding 24
months (in the reasonable
67
judgment of the Administrative Agent) is deposited into escrow on
terms and conditions that are mutually acceptable to the
Administrative Agent and the Borrower, (2) the final maturity date of
such Debt is at least three months after the final maturity date of
the Facilities and (3) the Administrative Agent and the Required
Lenders are reasonably satisfied that the Parent and its Subsidiaries
shall be in compliance with the provisions of the Loan Documents for
the period from the end of the escrow arrangements through the final
maturity date of the Facilities; or (B) 100% of the net proceeds of
such Debt is used to repay, reduce or refinance the Debt pursuant to
clause (viii) below, provided, that, the final maturity date of such
Debt is on or after September 30, 2008, there is no principal
amortization of such Debt before September 30, 2008 and such Debt is
incurred upon the terms and conditions as are approved by the Required
Lenders;
(vi) Debt of the Borrower under Hedge Agreements; provided, that
such agreements (A) are designed solely to protect the Borrower, BTI
or any Subsidiaries of the Borrower or BTI against fluctuations in
foreign currency exchange rates or interest rates and (B) do not
increase the Debt of the obligor outstanding at any time other than as
a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation
payable thereunder;
(vii) Debt Incurred in connection with the refinancing of any
Debt permitted under Section 5.02(b) (other than the Debt under the
Loan Documents), provided, that the Debt Incurred in connection with
such refinancing (A) has a scheduled maturity date that is on or after
the scheduled maturity date of the Debt being refinanced, (B) has a
weighted average life to maturity that is equal to or longer than the
remaining weighted average life to maturity of the Debt being
refinanced, determined immediately prior to giving effect to such
refinancing, (C) does not include any provisions that may require
mandatory prepayment of such Debt prior to its scheduled maturity,
other than scheduled prepayments taken into consideration in
determining compliance with clause (B) above and other provisions that
are not materially more burdensome to the obligor thereunder than any
such provisions included in the Debt being refinanced, (D) is Incurred
by the same Person that Incurred the Debt being refinanced and is not
Guaranteed or secured by any Lien unless the Debt being refinanced was
Guaranteed or secured by a Lien (in which case such Debt shall not be
Guaranteed by any Person that did not Guarantee the Debt being
refinanced and shall not be secured by a Lien on any asset that did
not secure the Debt being refinanced), (E) if the refinanced Debt was
subordinated to the Debt under the Loan Documents or the Debt under
the Second Lien Loan Documents, such Debt is subordinated to the Debt
under the Loan Documents or the Debt under the Second Lien Loan
Documents, as the case may be, on terms no less favorable to the
Lenders or the Lenders under the Second Lien Loan Documents, as
applicable, than the terms on which the Debt being refinanced was so
subordinated, and (F) has an aggregate principal amount which is equal
to or greater than that of the Debt being refinanced; provided,
further, that Debt Incurred under this Section 5.02(b)(vii) which has
an aggregate
68
principal amount that is greater than that of the Debt being
refinanced shall not be permitted by this Section 5.02(b)(vii) unless
a prepayment of the Debt under the Loan Documents and the Debt under
the Second Lien Loan Documents is made in accordance with Section 2.05
hereof (each refinancing undertaken in accordance with this Section
5.02(b)(vii) shall be referred to herein as a "Permitted
Refinancing");
(viii) Debt (excluding Debt Incurred pursuant to Section
5.02(b)(v)) Incurred in connection with the repayment or refinancing
of the Debt under the Loan Documents in full or, if the Debt under the
Loan Documents is not repaid or refinanced in full, in such other
amount as is approved by the Required Lenders;
(ix) Debt in respect of Ordinary Course Obligations in an
aggregate amount not to exceed $10,000,000 at any time outstanding;
(x) Debt secured by a Permitted Lien, to the extent that such
Debt is Incurred in the ordinary course of business and is not the
subject of an enforcement, collection, execution, levy or foreclosure
proceeding and is not duplicative of Debt Incurred pursuant to Section
5.02(b)(ix); and
(xi) Debt in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding, provided, that none of the Debt
referred to in Sections 5.02(b)(i) through (x) may be Incurred
pursuant to this Section 5.02(b)(xi).
Notwithstanding any other provision under this Section 5.02(b), (A)
the maximum amount of Debt that the Parent or a Subsidiary may Incur
pursuant to this Section 5.02(b) shall not be deemed to be exceeded with
respect to any outstanding Debt, and the Loan Parties shall not be deemed
to be out of compliance with Section 5.02(q), solely as a result of
fluctuations in the exchange rates of currencies, and (B) any Loan Party
may Incur Debt owed to any other Loan Party.
(c) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof provided, that, the Parent or any of its
Subsidiaries may engage in activities that are ancillary or related to its
business.
(d) Mergers, Etc. Other than as required to consummate the Merger
Transactions, merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except
that:
(i) any Subsidiary of the Borrower may merge into or consolidate
with any other Subsidiary of the Borrower, provided, that, in the case
of any such merger or consolidation, the Person formed by such merger
or consolidation shall be a Subsidiary of the Borrower, and provided,
further, that, in the case of any such merger or consolidation to
which a Subsidiary Guarantor is a party, the Person formed by such
merger or consolidation shall be a Subsidiary Guarantor;
69
(ii) subject to the conditions of Section 5.02(f)(vii), any
Subsidiary of the Borrower or BTI may merge into or consolidate with
any other Person or permit any other Person to merge into or
consolidate with it, provided, that the Person formed by such merger
or consolidation shall be a Subsidiary of the Borrower or BTI;
(iii) in connection with any sale or other disposition permitted
under Section 5.02(e) (other than clause (ii) thereof), any Subsidiary
of the Borrower or BTI may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with
it;
(iv) BTI may merge into or consolidate with any Subsidiary of
BTI, the Borrower or any Subsidiary of the Borrower, provided, that
the Person formed by such merger or consolidation (other than the
Borrower) shall be a Subsidiary Guarantor;
(v) any Subsidiary of the Borrower may merge into or consolidate
with the Borrower, BTI or any Subsidiary of BTI, provided, that the
Person formed by such merger or consolidation (other than the
Borrower) shall be a Subsidiary Guarantor;
(vi) any Subsidiary of BTI may merge into or consolidate with
BTI, the Borrower or any Subsidiary of the Borrower or BTI, provided,
that the Person formed by such merger or consolidation (other than the
Borrower) shall be a Subsidiary Guarantor;
(vii) any Person may merge into the Borrower, provided, that
either (A)(1) the Parent and its Subsidiaries are in compliance with
Sections 5.02(a), (b) and (f) on the date of such merger and after
giving effect thereto, (2) the consideration for such merger consists
solely of Capital Stock of the Parent and cash in lieu of fractional
shares of such Capital Stock, (3) such Person has positive cash flow
measured by EBITDA minus Capital Expenditures, in each case, for the
most recent twelve full months preceding the date of such merger, (4)
immediately preceding the date of such merger, the value of the
Current Assets of such Person minus unsecured Debt for Borrowed Money
of such Person to be assumed in such merger minus Capitalized Leases
of such Person to be assumed in such merger is at least $1.00, and (5)
if the date of such merger shall occur within twelve months after the
Merger Closing Date, the Chief Financial Officer of the Borrower shall
certify to the Administrative Agent that the Minimum Required
Synergies shall be achieved prior to the date of such merger; or (B)
the Required Lenders consent to such merger; and
(viii) any Subsidiary of the Parent other than the Borrower may
merge into or consolidate with any other Person (other than a
Subsidiary of the Parent) or permit any such other Person to merge
into or consolidate with it (other than, in either such case, in a
transaction referred to in clause (ii) or (iii) above), provided,
70
that the requirements of clause (vii) above shall be satisfied with
respect to such Person and such merger or consolidation, and provided,
further, that the Person formed by such merger or consolidation shall
be a Subsidiary Guarantor;
provided, that in each case, immediately after giving effect thereto, no
event shall occur and be continuing that constitutes a Default and in the
case of any such merger to which the Borrower is a party, (i) the Borrower
is the surviving corporation, and (ii) except as permitted by Section
5.02(f)(v), such merger does not adversely affect the Debt Rating, if any.
The calculations referred to in clauses (vii)(A)(3) and (vii)(A)(4) above
shall be made on a Consolidated basis with respect to all Persons that
shall become Subsidiaries of the Parent as a result of any individual
merger or consolidation to which such calculations shall apply.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or grant any option or other right to purchase,
lease or otherwise acquire any assets, other than Inventory to be sold in
the ordinary course of its business, except:
(i) (A) sales of Inventory in the ordinary course of its business
and (B) sales and leases of assets, including, without limitation,
fiber sales in the ordinary course of its business consistent with
prudent business practice for companies engaged in similar businesses;
(ii) in a transaction authorized by Section 5.02(d) (other than
clause (iii) thereof);
(iii) sales of assets for cash and for fair value in an aggregate
amount not to exceed $10,000,000 in any Fiscal Year;
(iv) sales of obsolete equipment for cash in an aggregate amount
not to exceed $20,000,000;
(v) any sale, lease, transfer or other disposition by the Parent
or any Subsidiary of the Parent to a Loan Party; and
(vi) assignments, sales or other dispositions at fair market
value of accounts receivable representing amounts owed to any Loan
Party by any Person that is subject to a proceeding under the
Bankruptcy Code;
provided, that in the case of sales of assets pursuant to clause (iii)
above, the Borrower shall, on the date of receipt by any Loan Party or any
of its Subsidiaries of the Net Cash Proceeds from such sale, prepay the
Advances pursuant to, and in the amount and order of priority set forth in,
Section 2.05(b)(ii), as specified therein. Nothing in this Section 5.02(e)
shall restrict the Parent from issuing, selling, transferring or otherwise
disposing of, for or without consideration and by dividend or otherwise,
any Equity Interests in the
71
Parent, or any option, warrant or other right to purchase or otherwise
acquire any Equity Interests in the Parent.
(f) Investments in Other Persons. Other than as required to consummate
the Merger Transactions, make or hold, or permit any of its Subsidiaries to
make or hold, any Investment in any Person, except:
(i) equity Investments by the Parent and its Subsidiaries in
their Subsidiaries outstanding on the date hereof and additional
Investments in Loan Parties;
(ii) loans and advances to employees in the ordinary course of
the business of the Parent and its Subsidiaries in an aggregate
principal amount not to exceed $1,000,000 at any time outstanding;
(iii) Investments in Cash Equivalents;
(iv) Investments existing on the date hereof and described on
Schedule 4.01(y) hereto;
(v) other Investments in an aggregate cash amount invested not to
exceed $10,000,000 plus 50% of the Net Cash Proceeds from any issuance
of Equity Interests; provided, however, that the consent of the
Required Lenders shall be required for any single Investment in which
the cash to be committed or paid exceeds $2,000,000; provided,
further, that with respect to Investments made under this clause (v):
(A) any newly acquired or organized Subsidiary of the Parent or any of
its Subsidiaries shall be a wholly owned Subsidiary thereof; (B)
immediately before and after giving effect thereto, no Default shall
have occurred and be continuing or would result therefrom; and (C) any
company or business acquired or invested in pursuant to this clause
(v) shall be in the same line of business as the business of the
Parent or any of its Subsidiaries or shall be engaged in an ancillary
or related business; provided, further, still, that, if (1) any such
Investment is made with a combination of cash and shares, stock or
other securities of the Parent or any of its Subsidiaries and (2) such
Investment results in the Debt Rating being downgraded by more than
one level, then the Applicable Margin shall increase by 0.50% per
annum;
(vi) extension of trade credit in the ordinary course of
business; and
(vii) an Investment through the acquisition by the Parent or any
of its Subsidiaries of all of the outstanding Capital Stock of another
Person solely in exchange for the Capital Stock of the Parent and cash
in lieu of fractional shares of such Capital Stock; provided, that
either (A)(1) such Person has positive cash flow measured by EBITDA
minus Capital Expenditures, in each case for the most recent twelve
full months preceding the date of such acquisition, (2) immediately
preceding the date of such acquisition, the value of the Current
Assets of such
72
Person minus unsecured Debt of such Person to be assumed in such
acquisition minus Capitalized Leases of such Person to be assumed in
such acquisition is at least $1.00, and (3) if the date of such
acquisition shall occur within twelve months after the Merger Closing
Date, the Chief Financial Officer of the Borrower shall certify to the
Administrative Agent that the Minimum Required Synergies shall be
achieved prior to the date of such acquisition; or (B) the Required
Lenders consent to such acquisition; provided, that, in any such case,
any Person so acquired shall be a Subsidiary Guarantor; provided,
further, that the calculations referred to in clauses (A)(1) and
(A)(2) above shall be made on a Consolidated basis with respect to all
Persons that shall become Subsidiaries of the Parent as a result of
any individual Investment to which such calculations shall apply,
provided, however, that, if such combination results in the Debt
Rating being downgraded by more than one level, then the Applicable
Margin shall increase by 0.50% per annum.
(g) Restricted Payments. Permit the Borrower, BTI or any Subsidiary of
the Borrower or BTI to declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests
now or hereafter outstanding, return any capital to its stockholders,
partners or members (or the equivalent Persons thereof) as such, make any
distribution of assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons thereof) as
such or issue or sell any Equity Interests or accept any capital
contributions (other than capital contributions from the parent of the
Borrower, BTI or any Subsidiary of the Borrower or BTI to the extent
permitted under Section 5.02(f)(i)), or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any Equity
Interests in the Borrower, BTI or the Parent, except that, if no Event of
Default has occurred and is continuing, the Borrower, BTI and each
Subsidiary of the Borrower and BTI may each declare and pay dividends in
cash or otherwise make distributions in cash to its parent, including the
Parent, provided, however, that such parent, including the Parent, may use
the proceeds of such cash dividends and other distributions only to pay (i)
scheduled interest and principal of Surviving Debt or any Debt issued or
Incurred by such parent, including the Parent, after the Amendment
Effective Date in accordance with the terms of Section 5.02(b) and (ii) in
the case of the Parent, cash in lieu of issuing fractional shares of its
Capital Stock in an aggregate amount not to exceed $250,000.
(h) Amendments of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other
constitutive documents except for any amendment that could not reasonably
be expected to have a Material Adverse Effect. An amendment of (i) the
redemption provisions of the Series A Certificate of Designation in
connection with a sale of any of the Loan Parties, (ii) the redemption
provisions of the Series B Certificate of Designation in connection with a
sale of any of the Loan Parties, and (iii) the certificate of
incorporation, bylaws or other constitutive documents of the Parent and the
other Loan Parties as contemplated by the Merger Agreement shall not be
deemed to have a Material Adverse Effect.
73
(i) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles, or (ii) Fiscal Year.
(j) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled amortization or maturity thereof
in any manner, or make any payment in violation of any subordination terms
of, any Debt except (i) the payment or prepayment of any or all of the
Obligations under the Loan Documents, (ii) the Capital Lease Amendment
Payments, (iii) the Contingent Payments, and (iv) regularly scheduled or
required repayments or redemptions of Surviving Debt, or amend, modify or
change in any manner any term or condition of any Surviving Debt, except
for any amendment, modification or change of Surviving Debt (except as
provided in any of clauses (i) through (iii) above or otherwise in this
Agreement) that (A) could not reasonably be expected to have a Material
Adverse Effect, (B) would not accelerate the scheduled amortization of such
Surviving Debt and (C) would not increase the applicable interest rate of
such Surviving Debt, or permit any of its Subsidiaries to do any of the
foregoing other than to prepay any Debt payable to the Borrower or another
Subsidiary of the Parent; provided, that, notwithstanding the foregoing,
the Parent and its Subsidiaries may (1) consummate any Permitted
Refinancing (and thereafter make any regularly scheduled or required
repayment or redemptions of Debt incurred in connection with such Permitted
Refinancing) and (2) repay or refinance the Debt under the Loan Documents
in full or in such other amount as is approved by the Required Lenders
pursuant to Section 5.02(b)(viii).
(k) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets except (i) in favor of (A) the Secured Parties
under this Agreement or (B) the Secured Parties as provided and defined in
the Second Lien Loan Documents or (ii) in connection with (A) any Surviving
Debt or (B) any Capitalized Lease permitted under Section 5.02(b)(iii)
solely to the extent that such Capitalized Lease prohibits a Lien on the
property subject thereto.
(l) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(m) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
(n) Formation of Subsidiaries. Organize, or permit any Subsidiary to
organize, any new Subsidiary except (a) as permitted under Section
5.02(f)(v) or (b) so long as (i) there exists no Default or Event of
Default both before and after giving effect to the creation of any new
wholly owned Subsidiary and the transfer of any assets to such wholly owned
Subsidiary, (ii) immediately upon the creation of any new wholly owned
74
Subsidiary, such Subsidiary shall become a Subsidiary Guarantor, (iii) the
applicable Loan Party, BTI or any Subsidiary of the Borrower or BTI owning
any portions of the stock of any such new wholly owned Subsidiary
immediately delivers all shares of stock of the new wholly owned Subsidiary
to the Collateral Agent, subject to the provisions of the Intercreditor and
Subordination Agreement, for the benefit of the Lender Parties and the
Lender Parties under the Second Lien Loan Documents, together with stock
powers executed in blank and executes and delivers to the Collateral Agent
and immediately delivers to the Collateral Agent pledge agreements pledging
all such stock to secure the Obligations and the Obligations under the
Second Lien Loan Documents, in form substantially similar to the applicable
Loan Document.
(o) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or arrangement
limiting the ability of any of its Subsidiaries to declare or pay dividends
or other distributions in respect of its Equity Interests or repay or
prepay any Debt owed to, make loans or advances to, or otherwise transfer
assets to or invest in, the Borrower, BTI or any Subsidiary of the Borrower
or BTI (whether through a covenant restricting dividends, loans, asset
transfers or investments, a financial covenant or otherwise), except (i)
the Loan Documents, (ii) the Second Lien Loan Documents, (iii) any
agreement or instrument evidencing Surviving Debt (including, without
limitation, the GECC Capital Lease and the NTFC Capital Lease) and (iv) any
agreement in effect at the time such Subsidiary becomes a Subsidiary of the
Borrower or BTI, so long as such agreement was not entered into solely in
contemplation of such Person becoming a Subsidiary of the Borrower or BTI.
(p) Amendment, Etc., of Material Contracts. Cancel or terminate
(except in accordance with the terms thereof) any Material Contract, or
consent to or accept any cancellation or termination thereof (except in
accordance with the terms thereof), amend or otherwise modify any such
Material Contract or give any consent, waiver or approval thereunder, waive
any default under or breach of any such Material Contract, agree in any
manner to any other amendment, modification or change of any term or
condition of any such Material Contract or take any other action in
connection with any such Material Contract that would impair the value of
the interest or rights of any Loan Party thereunder or that would impair
the interest or rights of any Agent or any Lender Party, or permit any of
its Subsidiaries to do any of the foregoing, except, in each of the
foregoing cases, where to do so would not be reasonably likely to have a
Material Adverse Effect.
(q) Financial Condition Covenants.
(i) Maximum Capital Expenditures. Make or commit to make, or
allow any of its Subsidiaries to make or commit to make, Capital
Expenditures exceeding, in the aggregate for each Fiscal Year until
the Termination Date, the greater of (A) EBITDA for such Fiscal Year,
less the sum of (I) cash interest expense for such Fiscal Year, plus
(II) amounts paid under Section 2.03 and all principal payments under
the GECC Capital Lease and the NTFC Capital Lease
75
(a) during Fiscal Year 2002 (for purposes of calculating the maximum
Capital Expenditures for Fiscal Year 2003) or (b) during Fiscal Year
2004 or the applicable Fiscal Year thereafter (for purposes of
calculating the maximum Capital Expenditures for Fiscal Year 2004 or
the applicable succeeding Fiscal Year, as the case may be), or (B)
$10,000,000 for Fiscal Year 2003 and $15,000,000 for each Fiscal Year
thereafter. For purposes of calculating maximum Capital Expenditures,
the amount calculated in item (II) above shall be deemed not to have
exceeded $20,000,000 for Fiscal Year 2004 and shall be deemed not to
have exceeded $30,000,000 for Fiscal Year 2005. Compliance with this
Section 5.02(q)(i) shall be measured at the end of each Fiscal Year,
commencing with Fiscal Year 2003. To the extent the Borrower's actual
Capital Expenditures for any Fiscal Year are less than the maximum
Capital Expenditures for such Fiscal Year computed as aforesaid, the
Borrower may increase Capital Expenditures for the subsequent Fiscal
Year by an amount equal to the amount by which such maximum Capital
Expenditures exceed such actual Capital Expenditures, but not by an
amount which exceeds $5,000,000.
For the purposes of this Section 5.02(q)(i) only, Capital
Expenditures shall not include the Contingent Payments and any payment
made in respect of that certain litigation arising from or in relating
in any way to the use of rights of way granted to the Borrower by
Mississippi Power Company; provided, that, to the extent that payment
made in respect of such litigation is equal to or greater than
$5,000,000, the Borrower shall deliver to the Agent prior to the
payment thereof, a statement that the Borrower will have not less than
$11,500,000 in cash and Cash Equivalents (excluding any insurance
proceeds deposited with the Collateral Agent as described in clause
(C) of the proviso in the definition of "Extraordinary Receipts")
after making such payment, certified by the Chief Financial Officer of
the Parent.
(ii) Senior Debt Ratio. (A) Commencing on the last day of the
fiscal quarter ending December 31, 2003 and, measured on the last day
of each fiscal quarter thereafter until the Termination Date, the
Senior Debt Ratio shall not exceed 4.0x. On the date that any Senior
Debt permitted hereunder is Incurred, the Senior Debt Ratio shall not
exceed 4.0x. Whenever the Senior Debt Ratio is computed for any
purpose under this Agreement, if the computation is being made with
respect to a period that ends (1) on the last day of a fiscal quarter,
then the Senior Debt and EBITDA, for purposes of such computation,
shall be the Senior Debt and EBITDA for the twelve-month period ended
on such last day of such fiscal quarter, or (2) on a day other than
the last day of a fiscal quarter, then the Senior Debt and EBITDA, for
purposes of such computation, shall be the Senior Debt and EBITDA for
the most recently completed twelve-month period.
(B) Solely for the purposes of calculating the Senior Debt
Ratio for purposes of clause (ii)(A) above and for purposes of
calculating the Applicable Eurodollar Rate Margin or Applicable
Base Rate Margin, EBITDA may be adjusted upward (only to the
extent that lost revenue
76
exceeds new revenue) to account for any reduction in EBITDA
resulting from lost revenue from PRI accounts of the Borrower and
its Subsidiaries and IFN accounts related to the sale of capacity
along the fiber network during the period commencing December 31,
2002 and ending June 30, 2004, determined on the last day of each
fiscal quarter during such period, for the period of the four
consecutive fiscal quarters then ended, in an aggregate amount
not to exceed the amount set forth opposite such date below:
Period Amount
----------------- ----------
December 31, 2003 $7,800,000
March 31, 2004 $7,300,000
June 30, 2004 $3,100,000
Any such adjustment to EBITDA under this clause (ii)(B) shall be
calculated on a pro-rated net revenue basis multiplied by 90% for the
applicable period pursuant to a compliance schedule reasonably
satisfactory to the Administrative Agent.
(iii) Total Leverage Ratio. On December 31, 2003, the Total
Leverage Ratio shall not exceed 5.75x and commencing on the last day
of the fiscal quarter ending March 31, 2004, and measured on the last
day of each fiscal quarter thereafter until the Termination Date, the
Total Leverage Ratio shall not exceed the ratio set forth below
opposite the applicable date:
The last day of the fiscal quarter ending: Ratio
------------------------------------------ -----
March 31, 2004 - June 30, 2004 5.5x
September 30, 2004- December 31, 2004 5.0x
March 31, 2005 - June 30, 2006 4.5x
Whenever the Total Leverage Ratio is computed for any purpose
under this Agreement, if the computation is being made with respect to
a period that ends (A) on the last day of a fiscal quarter, then the
Consolidated debt and Consolidated EBITDA, for purposes of such
computation, shall be the Consolidated debt and Consolidated EBITDA
for the twelve-month period ended on such last day of such fiscal
quarter, or (B) on a day other than the last day of a fiscal quarter,
then the Consolidated debt and Consolidated EBITDA, for purposes of
such computation, shall be the Consolidated debt and Consolidated
EBITDA for the most recently completed twelve-month period
(iv) Interest Coverage Ratio. Commencing on the last day of the
fiscal quarter ending December 31, 2003, and measured on the last day
of each fiscal quarter thereafter until the Termination Date, the
Interest Coverage Ratio shall not be less than the ratio set forth
below opposite the applicable date:
77
The last day of the fiscal quarter ending: Ratio
------------------------------------------ -----
December 31, 2003 - June 30, 2004 2.5x
September 30, 2004- December 31, 2004 3.0x
March 31, 2005 - June 30, 2005 3.5x
September 30, 2005- June 30, 2006 4.0x
(v) Minimum Cash. Permit the sum of (A) cash-on-hand and (B) Cash
Equivalents, in each case not subject to a Lien (other than Liens in
favor of the Collateral Agent pursuant to the Loan Documents and Liens
in favor of the Collateral Agent pursuant to the Second Lien Loan
Documents) or the use of which is otherwise restricted, to be less
than (1) $10,000,000 from the Amendment Effective Date through October
29, 2003, (2) $19,250,000 from October 30, 2003 through such date on
which the Borrower is no longer required to maintain a segregated
account pursuant to Section 5.01(n)(iv) and (3) $10,000,000
thereafter. The amount on deposit in the segregated account maintained
pursuant to Section 5.01(n)(iv) shall not be deemed to constitute
cash-on-hand or Cash Equivalents for the purposes of this Section
5.02(q)(v).
In the event that the Borrower reverses any restructuring charge
previously included in EBITDA and used in the calculation of maximum Capital
Expenditures or the Senior Debt Ratio pursuant to this Section 5.02(q), it shall
be required to demonstrate retroactive compliance with such financial covenants
set forth above in this Section 5.02(q) for the affected periods.
In the event that the actual Capital Expenditures, the Senior Debt
Ratio or the Total Leverage Ratio exceeds the applicable amount set forth above
in this Section 5.02(q), or the Interest Coverage Ratio no longer exceeds the
applicable amount set forth above in this Section 5.02(q), or the aggregate
amount of cash and Cash Equivalents is less than the required amount set forth
above in this Section 5.02(q), then within 60 days after the date of the
applicable Financial Covenants Certificate, the Borrower shall (i) in the case
of an excess with respect to Capital Expenditures, prepay the Advances by the
amount by which such actual Capital Expenditures exceed the maximum Capital
Expenditures, as set forth in Section 2.05(b)(v), (ii) in the case of an excess
with respect to the Senior Debt Ratio, the Total Leverage Ratio or the Interest
Coverage Ratio, as the case may be, prepay the Advances to the extent necessary
to comply with the Senior Debt Ratio, the Total Leverage Ratio or the Interest
Coverage Ratio, as applicable, as set forth in Section 2.05(b)(vi), or (iii)
increase the amount of cash and Cash Equivalents to no less than the amount
required by this Section 5.02(q), as applicable, and the Borrower's failure to
comply with the applicable covenant in this Section 5.02(q) shall not constitute
a Default unless the Borrower fails to take the applicable corrective action
specified above within such 60-day period.
SECTION 5.03. Reporting Requirements. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid
or any Lender
78
Party shall have any Commitment hereunder, the Borrower shall furnish to the
Agents and the Lender Parties:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the Chief Financial Officer
of the Borrower setting forth details of such Default or any such event,
development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto.
(b) Annual Financials. As soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of an annual report on Form
10-K for such year for the Parent and its Subsidiaries, including therein a
Consolidated balance sheet of the Parent and its Subsidiaries as of the end
of such Fiscal Year and Consolidated statement of income and a Consolidated
statement of cash flows of the Parent and its Subsidiaries for such Fiscal
Year, in each case accompanied by an opinion acceptable to the Required
Lenders of BDO ▇▇▇▇▇▇▇, LLP or other independent public accountants of
recognized standing acceptable to the Required Lenders, together with (i) a
certificate of such accounting firm to the Lender Parties stating that in
the course of the regular audit of the business of the Parent and its
Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, (ii) a report setting
forth all of the Borrower's IFN revenues and PRI revenues by circuit (or as
otherwise agreed by the Administrative Agent), (iii) a Financial Covenants
Certificate stating the Borrower's calculation of the ratios set forth in
Section 5.02(q) for the last quarter of such Fiscal Year, a statement as to
the amount of proceeds from any sale of assets, including obsolete
equipment, received during such Fiscal Year (provided, that any such sale
of assets individually or as part of a series of related transactions
resulted in receipt of proceeds in excess of $100,000 in such Fiscal Year),
and a statement of the Borrower's calculation of Excess Cash Flow for such
Fiscal Year, each with supporting documentation and in reasonable detail,
and (iv) a Financial Covenants Certificate stating that the representations
and warranties in each Loan Document are correct in all material respects
on and as of such date, other than any such representations or warranties
that, by their terms, refer to a specific date other than such date, in
which case as of such date and that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto.
(c) Quarterly Financials. As soon as available and in any event within
45 days after the end of each of the first three quarters of each Fiscal
Year, (i) Consolidated balance sheet of the Parent and its Subsidiaries as
of the end of such quarter and Consolidated statement of income and a
Consolidated statement of cash flows of the Parent and its Subsidiaries for
the period commencing at the end of the previous fiscal quarter and ending
with the end of such fiscal quarter and Consolidated statement of
79
income and a Consolidated statement of cash flows of the Parent and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding date or
period of the preceding Fiscal Year, (ii) a report setting forth all of the
Borrower's IFN revenues and PRI revenues by circuit (or as otherwise agreed
by the Administrative Agent) for the preceding twelve months, and (iii) a
Financial Covenants Certificate stating the Borrower's calculation of the
ratios set forth in Section 5.02(q) for such fiscal quarter with supporting
documentation, all in reasonable detail and duly certified (subject to
normal year-end audit adjustments) by the Chief Financial Officer of the
Parent as having been prepared in accordance with GAAP (with respect to
item (i)), and stating that the representations and warranties in each Loan
Document are correct in all material respects on and as of such date, other
than any such representations or warranties that, by their terms, refer to
a specific date other than such date, in which case as of such date and
that no Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and the
action that the Parent has taken and proposes to take with respect thereto.
(d) Monthly Financials. As soon as available and in any event within
30 days after the end of each month, (i) a Consolidated balance sheet of
the Parent and its Subsidiaries as of the end of such month, a Consolidated
statement of income and a Consolidated statement of cash flows of the
Parent and its Subsidiaries for the period commencing at the end of the
previous month and ending with the end of such month, and a Consolidated
statement of income and a Consolidated statement of cash flows of the
Parent and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth
in each case in comparative form the corresponding figures for the
preceding month, all in reasonable detail and duly certified by the Chief
Financial Officer of the Parent, and (ii) a condensed receivables aging
report, prepared in accordance with the Borrower's customary practice from
time to time, for the Borrower, BTI and the Subsidiaries of the Borrower
and BTI for such month with respect to their major lines of business and
any significant specific accounts review necessary to support bad debt
allowances, certified by the Chief Financial Officer of the Parent as
fairly and accurately reporting the information described therein, and
(iii) a certificate of the Chief Financial Officer of the Parent setting
forth EBITDA for the last twelve months then ended.
(e) Forecasts and Budgets. As soon as available and in any event no
later than 45 days after the end of each Fiscal Year, the following
prepared by management of the Borrower, in form satisfactory to the
Administrative Agent (i) balance sheets, income statements and cash flow
statements on a monthly and annual basis for the Fiscal Year following such
prior Fiscal Year; (ii) balance sheets, income statements and cash flow
statements on an annual basis for each Fiscal Year thereafter until the
Termination Date; and (iii) a selling, general and administrative expense
budget and a capital expenditure budget for the Borrower, BTI and the
Subsidiaries of the Borrower and BTI for each Fiscal Year in form and
substance reasonably satisfactory to the Administrative Agent.
80
(f) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f), and promptly
after the occurrence thereof, notice of any adverse change in the status or
the financial effect on any Loan Party or any of its Subsidiaries of the
Disclosed Litigation from that described on Schedule 4.01(f) hereto.
(g) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any
Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration
statements, that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that may
be substituted therefor, or with any national securities exchange.
(h) Creditor Reports. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of Debt securities of any
Loan Party or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lender Parties pursuant to any other clause of this
Section 5.03.
(i) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Material Contract or material
instrument, indenture, loan or credit or similar agreement and, from time
to time upon request by the Administrative Agent, such information and
reports regarding the related documents, the Material Contracts and such
instruments, indentures and loan and credit and similar agreements as the
Administrative Agent may reasonably request.
(j) Revenue Agent Reports. Within 10 days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section 1504(a)(1)
of the Internal Revenue Code) of which the Borrower is a member aggregating
$2,000,000 or more.
(k) Tax Certificates. (x) Promptly, and in any event within 15
Business Days after the due date (with extensions) for filing the final
Federal income tax return in respect of each taxable year, a certificate (a
"Tax Certificate"), signed by the President or the Chief Financial Officer
of the Borrower, stating that the Borrower has paid to the Internal Revenue
Service or other taxing authority, the full amount that the Borrower is
required to pay in respect of Federal income tax for such year and that the
Borrower, BTI and the Subsidiaries of the Borrower and BTI have received
any amounts payable to them, and have not paid amounts in respect of taxes
(Federal, state, local or foreign) in excess of the amount they are
required to pay, under the Tax Agreement in respect of such taxable year,
and (y) all correspondence between the Borrower and the Internal
81
Revenue Service or other taxing authority relating to any request for,
grant of and compliance with any extensions granted with respect to the
filing of any income tax returns.
(l) ERISA. (i) ERISA Events and ERISA Reports. (A) Promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the
Chief Financial Officer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto and (B) on the date any records,
documents or other information must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA, a copy of such records,
documents and information.
(ii) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention
to terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) Plan Annual Reports. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (C) the amount of liability incurred, or that is reasonably
expected to be incurred, by such Loan Party or any ERISA Affiliate in
connection with any event described in clause (A) or (B).
(m) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(n) Real Property. (i) As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(w) and 4.01(x) hereto, including an identification of all owned and
leased real property disposed of by the Borrower, BTI or any Subsidiaries
of the Borrower or BTI during such Fiscal Year, a list and description
(including the street address, county or other relevant jurisdiction,
state, record owner, book value thereof and, in the case of leases of
property, lessor, lessee, expiration date and annual rental cost thereof)
of all real property acquired or
82
leased during such Fiscal Year and a description of such other changes in
the information included in such Schedules as may be necessary for such
Schedules to be accurate and complete and (ii) promptly inform the
Administrative Agent of any investments in any of the real property listed
on Schedule 4.01(w) hereto proposed to be made by any Loan Party or Loan
Parties such that thereafter, the value thereof shall exceed $1,000,000
individually.
(o) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for each Loan
Party and its Subsidiaries and containing such additional information as
any Agent, or any Lender Party through the Administrative Agent, may
reasonably specify.
(p) Intentionally omitted.
(q) New Accounts. Promptly after opening an account with a bank or
other financial institution not subject to an account control agreement
referred to in Section 3.01(b)(ii)(H), notification thereof.
(r) Other Information. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Agent, or any
Lender Party through the Administrative Agent, may from time to time
reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail
to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Loan Document, in each case under this clause
(ii) within three Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any term, covenant
or agreement contained in ▇▇▇▇▇▇▇ ▇.▇▇(▇), ▇.▇▇, ▇.▇▇(▇), (▇), (▇), (▇) or
(m), 5.02 or 5.03; provided, that (i) failure to comply with the covenant
set forth in Section 2.05(b)(ii) or (iii) shall not constitute an Event of
Default unless and until such failure shall remain unremedied for three
Business Days and (ii) failure to comply with the covenant set forth
83
in Section 2.05(b)(iv) shall not constitute an Event of Default unless and
until such failure shall remain unremedied for 10 Business Days; provided,
further, that failure to comply with the covenant set forth in Section
5.02(q)(i), (ii), (iii, (iv) or (v) shall not constitute an Event of
Default unless the Borrower fails to prepay the Advances to the extent
specified in Section 2.05(b)(v) or Section 5.02(b)(vi) or increase the
aggregate amount of cash and Cash Equivalents to no less than the amount
required by Section 5.02(q)(v), as applicable, within the 60-day period
referred to therein; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 30 days
after the earlier of the date on which (i) a Responsible Officer becomes
aware of such failure or (ii) written notice thereof shall have been given
to the Borrower by any Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal amount (or, in the case of
any Hedge Agreement, an Agreement Value) of at least $2,000,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder)
of such Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
any Loan Party or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above
in this subsection (f); or
84
(g) any judgments or orders for the payment of money (individually or
in the aggregate) in excess of $5,000,000 (other than in connection with
the Contingent Payments) shall be rendered against any Loan Party or any of
its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgments or orders or (ii) there shall
be any period of 10 consecutive days during which a stay of enforcement of
any such judgments or orders, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could be reasonably likely to
have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 or 5.01(j) shall for any reason cease to be valid and
binding on or enforceable against any Loan Party to it, or any such Loan
Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to Section
3.01 or 5.01(j) shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of the Loan Parties and the ERISA Affiliates related to such
ERISA Event) exceeds $2,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $2,000,000 or requires
payments exceeding $1,000,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately
85
preceding the plan year in which such reorganization or termination occurs
by an amount exceeding $1,000,000; or
(o) an "Event of Default" (as defined in any Mortgage) shall have
occurred and be continuing; or
(p) an "Event of Default" shall have occurred and be continuing under
the Second Lien Credit Agreement; or
(q) any party to the Merger Agreement shall fail to perform or observe
any term, covenant or agreement contained in Section 8.21 of the Merger
Agreement on its part to be performed or observed and such failure shall
remain unremedied for 15 Business Days;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the Bankruptcy Code, the Notes,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
GUARANTY
SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor,
jointly and severally, hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent or any other Secured Party in enforcing any rights under
this Agreement or any other Loan Document. Without limiting the generality of
the foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
86
(b) Each Guarantor, and by its acceptance of this Agreement, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Agreement and the Obligations of
each Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Administrative Agent, the
other Lender Parties and the Guarantors hereby irrevocably agree that the
obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such Guarantor under
this Agreement not constituting a fraudulent transfer or conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Agreement or any other guaranty, such Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Lender with respect thereto. The obligations of each Guarantor under or in
respect of this Agreement are independent of the Guaranteed Obligations or any
other obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Agreement, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Agreement shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral,
or any taking, release or amendment or waiver of, or consent to departure
from, any other guaranty, for all or any of the Guaranteed Obligations;
87
(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any
manner of sale or other disposition of any collateral for all or any of the
Guaranteed Obligations or any other obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party
now or hereafter known to such Secured Parties (each Guarantor waiving any
duty on the part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver this
Agreement, any Guaranty Supplement or any other guaranty or agreement or
the release or reduction of liability of any Guarantor or other guarantor
or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
any Secured Party that might otherwise constitute a defense available to,
or a discharge of, any Loan Party or any other guarantor or surety.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Secured Party
or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Loan Party or otherwise, all as though such payment had
not been made.
SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Agreement and any requirement that
any Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Agreement and acknowledges that this Agreement is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the
88
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Loan Parties, any other guarantor or any other Person or any
collateral and (ii) any defense based on any right of set-off or counterclaim
against or in respect of the Obligations of such Guarantor hereunder.
(d) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to such Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
(e) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 7.02 and this Section
7.03 are knowingly made in contemplation of such benefits.
SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower or any other Loan Party or any other inside
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Agreement or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Agreement shall have been paid in full in cash. If any amount shall be paid to
any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of
(a) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Agreement, and (b) the Termination Date, such
amount shall be received and held in trust for the benefit of the Secured
Parties, shall be segregated from other property and funds of such Guarantor and
shall forthwith be paid or delivered to the Administrative Agent in the same
form as so received (with any necessary endorsement or assignment) to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Agreement, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or to be held as collateral for any Guaranteed
Obligations or other amounts payable under this Agreement thereafter arising. If
(i) any Guarantor shall make payment to any Secured Party of all or any part of
the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Agreement shall have been paid in full in cash, and
(iii) the Termination Date shall have occurred, the Secured Parties will, at
such Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by
89
subrogation to such Guarantor of an interest in the Guaranteed Obligations
resulting from such payment made by such Guarantor pursuant to this Agreement.
SECTION 7.05. Guaranty Supplements. Upon the execution and delivery by
any Person of a guaranty supplement in substantially the form of Exhibit I
hereto (each, a "Guaranty Supplement"), (a) such Person shall be referred to as
an "Additional Guarantor" and shall become and be a Guarantor hereunder, and
each reference in this Agreement to a "Guarantor" shall also mean and be a
reference to such Additional Guarantor, and each reference in any other Loan
Document to a "Subsidiary Guarantor" shall also mean and be a reference to such
Additional Guarantor, and (b) each reference herein to "this Guaranty,"
"hereunder," "hereof" or words of like import referring to this Agreement, and
each reference in any other Loan Document to the "Guaranty," "thereunder,"
"thereof" or words of like import referring to this Agreement, shall mean and be
a reference to this Agreement as supplemented by such Guaranty Supplement.
SECTION 7.06. Subordination. Each Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "Subordinated Obligations") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 7.06:
(a) Prohibited Payments, Etc. Except during the continuance of a
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Default (including the commencement and continuation
of any proceeding under any bankruptcy law relating to any other Loan
Party), however, unless the Required Lenders otherwise agree, no Guarantor
shall demand, accept or take any action to collect any payment on account
of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees
that the Secured Parties shall be entitled to receive payment in full in
cash of all Guaranteed Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any bankruptcy law,
whether or not constituting an allowed claim in such proceeding
("Post-Petition Interest")) before such Guarantor receives payment of any
Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any
Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for
the Secured Parties and deliver such payments to the Administrative Agent
on account of the Guaranteed Obligations (including all Post-Petition
Interest), together with any necessary endorsements or other instruments of
90
transfer, but without reducing or affecting in any manner the liability of
such Guarantor under the other provisions of this Agreement.
(d) Administrative Agent Authorization. After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name
of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to
the Guaranteed Obligations (including any and all Post-Petition Interest),
and (ii) to require each Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any
amounts received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all
Post-Petition Interest).
SECTION 7.07. Continuing Guaranty; Assignments. This Agreement is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Agreement and (ii) the Termination Date, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Secured Parties and their successors,
transferees and assigns. Without limiting the generality of clause (c) of the
immediately preceding sentence, subject to Section 9.07, any Secured Party may
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in Section 9.07. No Guarantor shall
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Secured Parties.
SECTION 7.08. Release of Guarantor. In the event that all of the
capital stock of one or more Guarantors is sold or otherwise disposed of (except
to the Borrower, BTI or any Subsidiary of the Borrower or BTI) or liquidated in
compliance with the requirements of the this Agreement (or such sale or other
disposition or liquidation has been approved in writing by the Required Lenders)
and the proceeds of such sale, disposition or liquidation are applied in
accordance with the provisions of this Agreement, to the extent applicable, such
Guarantor shall be released from this Agreement and this Agreement shall, as to
each such Guarantor or Guarantors, terminate, and have no further force or
effect (it being understood and agreed that the sale of one or more persons that
own, directly or indirectly, all of the capital stock or partnership interests
of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes
of this Section 7.08).
91
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law. Each Agent agrees to give to each Lender Party prompt notice
of each notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 8.02. Agents' Reliance, Etc. Neither any Agent nor any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 9.07; (b) may consult with legal counsel (including counsel
for any Loan Party), 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; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; 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 (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. ▇▇▇▇▇ Fargo and Affiliates. With respect to any
Commitments, any Advances made by it and any Notes issued to it, ▇▇▇▇▇ Fargo
shall have the same rights and
92
powers under the Loan Documents as any other Lender Party and may exercise the
same as though it were not an Agent; and the term "Lender Party" or "Lender
Parties" shall, unless otherwise expressly indicated, include ▇▇▇▇▇ Fargo in its
individual capacity. ▇▇▇▇▇ Fargo and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person that may do business with or own
securities of any Loan Party or any such Subsidiary, all as if ▇▇▇▇▇ Fargo was
not an Agent and without any duty to account therefor to the Lender Parties.
SECTION 8.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender Party 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.
SECTION 8.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify each Agent (to the extent not promptly reimbursed by the Borrower)
from and against such Lender Party's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Agent under the Loan Documents; provided, however, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 9.04 (other than under Section 9.04(c)),
to the extent that such Agent is not promptly reimbursed for such costs and
expenses by the Borrower.
(b) For purposes of this Section 8.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (i) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties and (ii) the Commitments of the
respective Lender Parties at such time. The failure of any Lender Party to
reimburse any Agent promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to such Agent as provided herein shall
not relieve any other Lender Party of its obligation hereunder to reimburse such
Agent for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse such Agent
for such other Lender Party's ratable share of such amount. Without prejudice to
the survival of any other agreement of any Lender Party hereunder, the agreement
and obligations of each Lender Party contained in this Section 8.05
93
shall survive the payment in full of principal, interest and all other amounts
payable hereunder and under the other Loan Documents.
SECTION 8.06. Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and, in the case of a
successor Collateral Agent, upon the execution and filing or recording of such
financing statements, or amendments thereto, and such amendments or supplements
to the Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. If within 45 days after written notice is given of the retiring
Agent's resignation or removal under this Section 8.06 no successor Agent shall
have been appointed and shall have accepted such appointment, then on such 45th
day (i) the retiring Agent's resignation or removal shall become effective, (ii)
the retiring Agent shall thereupon be discharged from its duties and obligations
under the Loan Documents and (iii) the Required Lenders shall thereafter perform
all duties of the retiring Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as provided above. After
any retiring Agent's resignation or removal hereunder as Agent shall have become
effective, the provisions of this Article VIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 8.07. Appointment of Subagents. Anything herein to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more subagents or
collateral co-agents (each, a "Subagent") with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent with
respect to any Collateral, (i) the Liens on such Collateral granted pursuant to
the applicable Collateral Documents shall be deemed for purposes of this
Agreement and the other Loan Documents to have been granted to such Subagent, in
addition to the Collateral Agent, for the benefit of the Secured Parties, (ii)
such Subagent shall be automatically vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent under the Loan Documents with respect to such Collateral, (iii)
the provisions of this Article 8 and of Section 9.04 that refer to each Agent
shall be deemed to be references to each Agent and/or each Subagent, as the
context may require, and (iv) the term "Collateral Agent", when used herein or
in any of the applicable Collateral Documents in relation to any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral shall include such Subagent; provided, however, that no such Subagent
shall be authorized to
94
take any action with respect to any such Collateral unless and except to the
extent expressly authorized in writing by the Collateral Agent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified in Section
3.01, (ii) change the number of Lenders or the percentage of (x) the Commitments
or (y) the aggregate unpaid principal amount of the Advances that, in each case,
shall be required for the Lenders or any of them to take any action hereunder,
(iii) reduce or limit the obligations of any Guarantor under Section 7.01 or
release such Guarantor or otherwise limit such Guarantor's liability with
respect to the Obligations owing to the Agents and the Lender Parties, (iv)
release all or substantially all of the Collateral in any transaction or series
of related transactions or permit the creation, incurrence, assumption or
existence of any Lien on all or substantially all of the Collateral in any
transaction or series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan Documents, or (v)
amend Section 2.10 or this Section 9.01, and (b) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and each Lender
(other than any Lender that is, at such time, a Defaulting Lender) that has a
Commitment under any of the Facility if such Lender is directly affected by such
amendment, waiver or consent, (i) increase the Commitments of such Lender or
subject such Lender to any additional obligations, (ii) reduce the principal of,
or interest on, the Notes held by such Lender or any fees or other amounts
payable hereunder to such Lender or (iii) postpone any date fixed for any
payment of principal of, or interest on, the Notes held by such Lender or any
fees or other amounts payable hereunder to such Lender; and provided, further,
that no amendment, waiver or consent shall, unless in writing and signed by an
Agent in addition to the Lenders required above to take such action, affect the
rights or duties of such Agent under this Agreement or the other Loan Documents.
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to the Borrower, at its address at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; if to any Amendment Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; if to the
Agent, at its address at ▇▇▇▇▇ Fargo Bank Minnesota, National Association,
Corporate Trust Services, N9303-120, Sixth
▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, T: (▇▇▇) ▇▇▇-▇▇▇▇, F: (612)
667-9825, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇; or, as to any party, at such other address
as shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, when mailed, telegraphed, telecopied
or telexed, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively, except that notices and communications to any Agent pursuant to
Article II, III or VIII shall not be effective until received by such Agent.
Manual delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of an
original executed counterpart thereof.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of each Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for each Agent with
respect thereto, with respect to advising such Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of each Agent and each Lender Party in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation, or
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent,
each Lender Party and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) any claims by third parties
involving (i) the Facilities, the actual or proposed use of the proceeds of the
Advances, the Loan Documents or any of the transactions contemplated thereby, or
(ii) the actual or alleged presence of Hazardous Materials on any property of
any Loan Party or any of its Subsidiaries or any Environmental Action relating
in any
96
way to any Loan Party or any of its Subsidiaries, except to the extent such
claim, damage, loss, liability or expense results from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Loan Documents are consummated. Each of the parties hereto also agrees not
to assert any claim against any other party hereto or any of their respective
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances, the Loan Documents or
any of the transactions contemplated by the Loan Documents.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.05, 2.08(b)(i) or 2.09(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or if the Borrower fails to make any payment or prepayment of an
Advance for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.03, 2.05 or 6.01 or
otherwise, the Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion or such failure to pay or prepay, as
the case may be, including, without limitation, any loss (including loss of any
interest that, but for such failure, such Lender would have earned with respect
to such principal amount, reduced if such Lender Party is able to redeposit or
reinvest such principal amount, by interest earned by such Lender as a result of
such redeposit or reinvestment), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advance. For the purpose of calculating amounts
payable to any Lender Party under this Section 9.04(c), each Lender Party shall
be deemed to have actually funded its Eurodollar Rate Advance through the
purchase of a deposit-bearing interest at the Eurodollar Rate in an amount equal
to the amount of that Eurodollar Rate Advance and having a maturity comparable
to the applicable Interest Period; provided, that each Lender Party may fund
each Eurodollar Rate Advance in any manner it deems appropriate, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 9.04(c).
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.09 and 2.10 and this Section
9.04 shall survive the payment in
97
full of principal, interest and all other amounts payable hereunder and under
any of the other Loan Documents.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender Party and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender Party
or such Affiliate to or for the credit or the account of the Borrower, BTI and
the Subsidiaries of the Borrower and BTI against any and all of the Obligations
of the Borrower now or hereafter existing under the Loan Documents, irrespective
of whether such Agent or such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each Agent and each Lender Party agrees promptly to notify the Borrower after
any such set-off and application; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Agent and each Lender Party and their respective Affiliates under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
when it has been executed by the Borrower and each Agent, and the Administrative
Agent has been notified by the Required Lenders that each such Required Lender
has executed it, and thereafter this Agreement shall be binding upon and inure
to the benefit of the Borrower, each Agent and each Lender Party and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender,
an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of
all of a Lender's rights and obligations under this Agreement, the aggregate
amount of the Commitments being assigned to such Eligible Assignee pursuant to
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $1,000,000 (or such
lesser amount as shall be approved by the Administrative Agent and, so long as
no Event of Default shall have occurred and be continuing at the time of
effectiveness of such assignment, the Borrower, such approval, in the case of
the Borrower, not to be unreasonably withheld), (ii) each such assignment shall
be to an Eligible Assignee, and (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment. No processing and recordation fee shall be
due.
98
(b) Upon such execution, delivery, consent, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto 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 (ii) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.09,
2.10 and 9.04 to the extent any claim thereunder relates to an event arising
prior to such assignment) and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; (ii) such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 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 any Agent, such assigning Lender Party
or any other Lender Party 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; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the fee payable in connection with such assignment and
acceptance pursuant to the Successor Agent Agreement, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept
99
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower and each other
Agent. In the case of any assignment by a Lender, within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under each Facility pursuant to such
Assignment and Acceptance and, if any assigning Lender has retained a Commitment
hereunder under such Facility, a new Note to the order of such assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or A-2 hereto, as the case may be.
(f) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(g) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
100
SECTION 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Manual delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
SECTION 9.09. Confidentiality. Neither any Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to such Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process, (c)
as requested or required by any state, Federal or foreign authority or examiner
regulating such Lender Party, (d) to any rating agency when required by it,
provided, that, prior to any such disclosure, such rating agency shall undertake
to preserve the confidentiality of any Confidential Information relating to the
Loan Parties received by it from such Lender Party and (e) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor, provided, that prior to such disclosure,
such contractual counterparty or professional advisor to such contractual
counterparty shall undertake to preserve the confidentiality of any Confidential
Information relating to the Loan Parties received by it from such Agent or
Lender Party.
SECTION 9.10. Release of Collateral. Upon the sale, lease, transfer or
other disposition of any item of Collateral of any Loan Party (including,
without limitation, as a result of the sale, in accordance with the terms of the
Loan Documents, of the Loan Party that owns such Collateral) in accordance with
the terms of the Loan Documents, the Collateral Agent will, at the Borrower's
expense, execute and deliver to such Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral Documents
in accordance with the terms of the Loan Documents.
SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York County, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction. Notwithstanding the foregoing, no party that is a
sovereign entity shall be deemed to have waived any immunity against
pre-judgment attachment of any of its assets or properties.
101
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 9.12. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.13. Waiver of Jury Trial. Each of the Guarantors, the
Borrower, the Agents and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of any Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.
SECTION 9.14. Waiver and Consent. The Lender Parties hereby
irrevocably (i) waive any and all Defaults and Events of Default that may exist
and be continuing as of the Amendment Effective Date under and as defined in the
First Amended ITCD Credit Agreement and any other Loan Document as provided and
defined in the First Amended ITCD Credit Agreement and irrevocably waive any and
all remedies and other rights they may have under the First Amended ITCD Credit
Agreement, any other Loan Document as provided and defined in the First Amended
ITCD Credit Agreement, this Agreement or any other Loan Document or otherwise in
respect of such Defaults and Events of Defaults, (ii) agree and consent to the
consummation of each and every one of the Merger Transactions notwithstanding
that the consummation of any such Merger Transaction may, in the absence of this
Section 9.14, be deemed to violate or breach, or conflict with, this Agreement
or any other Loan Document or to constitute a Default or an Event of Default
under the First Amended ITCD Credit Agreement, any other Loan Document as
provided and defined in the First Amended ITCD Credit Agreement, this Agreement
or any other Loan Document and (iii) agree and covenant to the consummation of
the MEGAPOP Transactions notwithstanding that the consummation of the MEGAPOP
Transactions may, in the absence of this Section 9.14, be deemed to violate or
breach, or conflict with, this Agreement or any other Loan Document or to
constitute a Default or an Event of Default under this Agreement or any other
Loan Document. Notwithstanding any other provision of this Agreement to the
contrary, once this Agreement becomes effective, the provisions of this Section
9.14, as they apply to the First Amended ITCD Credit Agreement and any other
such Loan Document, shall be deemed to have become effective immediately prior
to the consummation of the Merger Transactions.
SECTION 9.15. Release of the Agent and the Lenders. Effective as of
the date hereof, the Borrower and the Subsidiary Guarantors hereby release each
Lender and each such Lender's direct and indirect stockholders and other
affiliates, officers, employees, directors and agents (collectively, the
"Releasees") from any and all claims, demands, liabilities, responsibilities,
disputes, causes of action (whether at law or in equity) and obligations of
every nature whatsoever, whether liquidated or unliquidated, known or unknown,
matured or
102
unmatured, fixed or contingent that any of the Borrower or the Subsidiary
Guarantors may have against any Lender, arising from or relating to any action
or inactions of any Releasee on or prior to the date hereof with respect to this
Agreement, any other Loan Document, the Obligations, the Collateral or any other
property securing the Obligations. For purposes of the release contained in this
paragraph, the term "Borrower" shall also include the Borrower's successors and
assigns, including, without limitation, any trustee, receiver or other
representative acting on behalf of the Borrower.
SECTION 9.16. FS Multimedia, Inc. FS Multimedia, Inc. is expected to
be merged into a Subsidiary of the Parent shortly after the Amendment Effective
Date. Consequently, FS Multimedia, Inc is executing this Agreement for the sole
purpose of agreeing to be bound by the terms of Article VII as a Guarantor until
such time as such merger has consummated. In the event such merger is
consummated within 15 Business Days after the Amendment Effective Date, FS
Multimedia, Inc., effective as of the consummation of such merger, shall no
longer be bound by, or subject to, Article VII or any term or provision of any
Loan Document. In the event such merger is not consummated within 15 Business
Days after the Amendment Effective Date, then FS Multimedia, Inc. shall execute
and deliver all Loan Documents, and perform all such other actions, as all other
Guarantors are obligated to execute and deliver or perform in connection with
the consummation of the Transactions.
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
PARENT:
ITC/\DELTACOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
BORROWER:
INTERSTATE FIBERNET, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
SUBSIDIARY GUARANTORS:
ITC/\DELTACOM COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
DELTACOM INFORMATION SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
BUSINESS TELECOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
BTI TELECOM CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
BUSINESS TELECOM OF VIRGINIA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
FS MULTIMEDIA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
ADMINISTRATIVE AGENT
AND COLLATERAL AGENT:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------------
Duly Authorized Signatory
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Corporate Trust Officer
LENDERS:
PW WILLOW FUND, L.L.C.
By Bond Street Capital LLC
By: /s/ ▇▇▇ ▇. ▇▇▇
----------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇
Title: Managing Member
Bond Street Capital, L.L.C.
ELC (CAYMAN) LTD. 2000-1
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc.,
as Collateral Manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc.,
as Investment Advisor
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
SUFFIELD CLO, LIMITED
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc.,
as Collateral Manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇ CLO LTD. 2000-1
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company Inc.,
as Collateral Manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
GOLDENTREE HIGH YIELD MASTER FUND, LTD.
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
GOLDENTREE HIGH YIELD MASTER FUND II, LTD.
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
GOLDENTREE HIGH YIELD OPPORTUNITIES I, L.P.
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
GOLDENTREE HIGH YIELD OPPORTUNITIES II, L.P.
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
DB STRUCTURED PRODUCTS INC.
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
GOLDENTREE LOAN OPPORTUNITIES I, LIMITED
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
SAFETY NATIONAL CASUALTY CORPORATION
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
ALPHA U.S. SUBFUND II, LLC
By Goldentree Asset Management, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Portfolio Manager
SANKATY ADVISORS, LLC, as Collateral
Manager for ▇▇▇▇▇ Point II CBO 2000-1 LTD., as
Term Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
SANKATY ADVISORS, LLC, as Collateral
Manager for Great Point CLO 1999-1 LTD., as Term
Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
SANKATY HIGH YIELD PARTNERS III, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
SANKATY HIGH YIELD PARTNERS II, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
SANKATY HIGH YIELD ASSET PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
SANKATY CREDIT OPPORTUNITIES, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
Sankaty Advisors, LLC as Collateral Manager for
Race Point II CLO, Limited, as Term Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Portfolio Manager
PACIFICA PARTNERS I, LP
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
ALLIANCE CAPITAL FUNDING
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ BANK
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
WESTPAC BANKING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Head of Credit
Europe & Americas
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
EXCEL BANK MINNESOTA
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
LONG LANE MASTER TRUST IV
By Fleet National Bank
As Trust Administrator
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
R/2/ TOP HAT, LTD.
By Amalgamated Gadget, L.P., its Investment
Manager
By Scepter Holdings, Inc., its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
MUZINICH CASHFLOW CBO II LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO, Muzinich & Co., Inc.
MUZINICH CASHFLOW CBO, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO, Muzinich & Co., Inc.
SANDLER ASSOCIATES
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
SANDLER ASSOCIATES II
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
SANDLER COMMUNICATION OFFSHORE
By: /s/ ▇▇▇▇▇▇ Waldhavoky
----------------------------------------------------
Name: ▇▇▇▇▇▇ Waldhavoky
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Duly Authorized Signatory
BANC OF AMERICA STRATEGIC SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
Title: Managing Director
EXPORT DEVELOPMENT CANADA
(f/k/a Export Development Corporation)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Loan Asset Manager
By /s/ ▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Loan Asset Manager
SCHEDULE I
APPLICABLE LENDING OFFICES
================================================================================
Domestic Eurodollar
Lending Lending
Name of Lender Office Office
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
