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CREDIT AGREEMENT
dated as of June 4, 1999
by and among
CAIS, INC.
as Borrower
and
NORTEL NETWORKS INC.
as Administrative Agent
and
THE LENDERS NAMED HEREIN
$30,000,000 ADVANCING TERM LOAN FACILITY
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TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions. . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1 Definitions, etc.. . . . . . . . . . . . . .1
Section 1.2 Other Definitional Provisions. . . . . . . 21
Section 1.3 Accounting Terms and Determinations. . . . 21
Section 1.4 Financial Covenants and Reporting. . . . . 22
ARTICLE 2
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.1 Commitments. . . . . . . . . . . . . . . . 22
Section 2.2 Notes. . . . . . . . . . . . . . . . . . . 22
Section 2.3 Repayment of Loans . . . . . . . . . . . . 23
Section 2.4 Interest . . . . . . . . . . . . . . . . . 24
Section 2.5 Borrowing Procedure. . . . . . . . . . . . 24
Section 2.6 Optional Prepayments, Conversions
and Continuations of Loans . . . . . . . . 25
Section 2.7 Mandatory Prepayments. . . . . . . . . . . 25
Section 2.8 Minimum Amounts. . . . . . . . . . . . . . 26
Section 2.9 Certain Notices. . . . . . . . . . . . . . 26
Section 2.10 Use of Proceeds. . . . . . . . . . . . . . 27
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . 27
Section 2.12 Computations . . . . . . . . . . . . . . . 27
Section 2.13 Termination or Reduction of Commitments. . 28
ARTICLE 3
Payments . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.1 Method of Payment. . . . . . . . . . . . . 28
Section 3.2 Pro Rata Treatment . . . . . . . . . . . . 29
Section 3.3 Sharing of Payments, Etc.. . . . . . . . . 29
Section 3.4 Non-Receipt of Funds
by the Administrative Agent . . . . . . . .29
Section 3.5 Taxes. . . . . . . . . . . . . . . . . . . 30
Section 3.6 Withholding Tax Exemption. . . . . . . . . 31
Section 3.7 Reinstatement of Obligations . . . . . . . 31
Section 3.8 No Force Majeure, Disputes . . . . . . . . 31
Section 3.9 Return of Notes upon Payment in Full . . . 32
ARTICLE 4
Yield Protection and Illegality . . . . . . . . . . . . . 32
Section 4.1 Additional Costs . . . . . . . . . . . . . 32
Section 4.2 Limitation on Types of Loans . . . . . . . 34
Section 4.3 Illegality . . . . . . . . . . . . . . . . 34
Section 4.4 Treatment of Affected Loans. . . . . . . . 34
Section 4.5 Compensation . . . . . . . . . . . . . . . 35
Section 4.6 Capital Adequacy . . . . . . . . . . . . . 35
Section 4.7 Additional Interest on Eurodollar Loans. . 36
ARTICLE 5
Security . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.1 Collateral . . . . . . . . . . . . . . . . 36
Section 5.2 Guaranties.. . . . . . . . . . . . . . . . 37
Section 5.3 New Subsidiaries.. . . . . . . . . . . . . 37
Section 5.4 Further Assurances . . . . . . . . . . . . 37
Section 5.5 Landlord Waivers.. . . . . . . . . . . . . 37
Section 5.6 Setoff.. . . . . . . . . . . . . . . . . . 37
ARTICLE 6
Conditions Precedent. . . . . . . . . . . . . . . . . . . 38
Section 6.1 Initial Extension of Credit. . . . . . . . 38
Section 6.2 All Extensions of Credit . . . . . . . . . 41
Section 6.3 Closing Certificates . . . . . . . . . . . 42
ARTICLE 7
Representations and Warranties. . . . . . . . . . . . . . 42
Section 7.1 Existence. . . . . . . . . . . . . . . . . 42
Section 7.2 Financial Statements . . . . . . . . . . . 43
Section 7.3 Corporate Action; No Breach. . . . . . . . 43
Section 7.4 Operation of Business; Licenses. . . . . . 43
Section 7.5 Intellectual Property. . . . . . . . . . . 44
Section 7.6 Litigation and Judgments . . . . . . . . . 44
Section 7.7 Rights in Properties; Liens. . . . . . . . 44
Section 7.8 Enforceability . . . . . . . . . . . . . . 44
Section 7.9 Approvals. . . . . . . . . . . . . . . . . 45
Section 7.10 Debt . . . . . . . . . . . . . . . . . . . 45
Section 7.11 Taxes. . . . . . . . . . . . . . . . . . . 45
Section 7.12 Margin Securities. . . . . . . . . . . . . 45
Section 7.13 ERISA. . . . . . . . . . . . . . . . . . . 45
Section 7.14 Disclosure . . . . . . . . . . . . . . . . 46
Section 7.15 Loan Parties . . . . . . . . . . . . . . . 46
Section 7.16 Compliance with Laws . . . . . . . . . . . 46
Section 7.17 Investment Company Act . . . . . . . . . . 46
Section 7.18 Public Utility Holding Company Act . . . . 47
Section 7.19 Environmental Matters. . . . . . . . . . . 47
Section 7.20 Year 2000 Compliance.. . . . . . . . . . . 48
Section 7.21 Acts of God. . . . . . . . . . . . . . . . 48
Section 7.22 Material Contracts . . . . . . . . . . . . 48
Section 7.23 Bank Accounts. . . . . . . . . . . . . . . 49
Section 7.24 Outstanding Securities . . . . . . . . . . 49
Section 7.25 Solvency . . . . . . . . . . . . . . . . . 49
Section 7.26 Employee Matters . . . . . . . . . . . . . 49
Section 7.27 Insurance. . . . . . . . . . . . . . . . . 49
Section 7.28 Common Enterprise. . . . . . . . . . . . . 49
ARTICLE 8
Affirmative Covenants . . . . . . . . . . . . . . . . . . 50
Section 8.1 Reporting Requirements . . . . . . . . . . 50
Section 8.2 Maintenance of Existence;
Conduct of Business . . . . . . . . . . . .53
Section 8.3 Maintenance of Properties and Permits. . . 53
Section 8.4 Taxes and Claims . . . . . . . . . . . . . 53
Section 8.5 Insurance. . . . . . . . . . . . . . . . . 53
Section 8.6 Inspection Rights. . . . . . . . . . . . . 55
Section 8.7 Keeping Books and Records. . . . . . . . . 55
Section 8.8 Compliance with Laws . . . . . . . . . . . 55
Section 8.9 Compliance with Agreements . . . . . . . . 55
Section 8.10 Further Assurances . . . . . . . . . . . . 55
Section 8.11 ERISA. . . . . . . . . . . . . . . . . . . 56
Section 8.12 Non-Consolidation. . . . . . . . . . . . . 56
Section 8.13 Year 2000 Compliance.. . . . . . . . . . . 56
Section 8.14 Delivery of Certain Amendments . . . . . . 56
Section 8.15 Interest Rate Protection.. . . . . . . . . 56
Section 8.16 Ownership of Assets; Holdings to Remain a
Holding Company . . . . . . . . . . . . . .57
Section 8.17 Service Agreement Revenues . . . . . . . . 57
ARTICLE 9
Negative Covenants . . . . . . . . . . . . . . . . . . . 57
Section 9.1 Debt. . . . . . . . . . . . . . . . . . . 57
Section 9.2 Limitation on Liens. . . . . . . . . . . . 58
Section 9.3 Mergers, Etc.. . . . . . . . . . . . . . . 58
Section 9.4 Restricted Payments. . . . . . . . . . . . 58
Section 9.5 Investments. . . . . . . . . . . . . . . . 59
Section 9.6 Limitation on Operating
Leases of the Borrower . . . . . . . . . . 60
Section 9.7 Transactions with Affiliates.. . . . . . . 60
Section 9.8 Disposition of Property. . . . . . . . . . 60
Section 9.9 Sale and Leaseback.. . . . . . . . . . . . 61
Section 9.10 Lines of Business. . . . . . . . . . . . . 61
Section 9.11 Environmental Protection.. . . . . . . . . 61
Section 9.12 Intercompany Transactions. . . . . . . . . 61
Section 9.13 Management Fees. . . . . . . . . . . . . . 62
Section 9.14 Master Purchase Agreement. . . . . . . . . 62
Section 9.15 Modification of Certain Agreements.. . . . 62
Section 9.16 ERISA. . . . . . . . . . . . . . . . . . . 62
Section 9.17 No Prepayment of Debt, Etc.. . . . . . . . 62
ARTICLE 10
Financial Covenants . . . . . . . . . . . . . . . . . . . 63
Section 10.1 Total Debt to Total Capitalization.. . . . 63
Section 10.2 Total Debt to Annualized EBITDA. . . . . . 63
Section 10.3 Fixed Charge Coverage. . . . . . . . . . . 63
Section 10.4 Quarterly Minimum Revenue Levels . . . . . 64
ARTICLE 11
Default . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 11.1 Events of Default. . . . . . . . . . . . . 64
Section 11.2 Remedies . . . . . . . . . . . . . . . . . 66
Section 11.3 Performance by the Administrative
Agent, etc . . . . . . . . . . . . . . . . 67
ARTICLE 12
The Administrative Agent. . . . . . . . . . . . . . . . . 67
Section 12.1 Appointment, Powers and Immunities . . . . 67
Section 12.2 Rights of Administrative Agent as a Lender 68
Section 12.3 Defaults . . . . . . . . . . . . . . . . . 68
Section 12.4 INDEMNIFICATION. . . . . . . . . . . . . . 69
Section 12.5 Independent Credit Decisions . . . . . . . 70
Section 12.6 Several Commitments. . . . . . . . . . . . 70
Section 12.7 Successor Administrative Agent . . . . . . 70
ARTICLE 13
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 71
Section 13.1 Expenses . . . . . . . . . . . . . . . . . 71
Section 13.2 INDEMNIFICATION. . . . . . . . . . . . . . 71
Section 13.3 Limitation of Liability. . . . . . . . . . 72
Section 13.4 No Duty. . . . . . . . . . . . . . . . . . 73
Section 13.5 No Fiduciary Relationship. . . . . . . . . 73
Section 13.6 Equitable Relief . . . . . . . . . . . . . 73
Section 13.7 No Waiver; Cumulative Remedies . . . . . . 73
Section 13.8 Successors and Assigns . . . . . . . . . . 73
Section 13.9 Survival . . . . . . . . . . . . . . . . . 77
Section 13.10 ENTIRE AGREEMENT . . . . . . . . . . . . . 77
Section 13.11 Amendments . . . . . . . . . . . . . . . . 77
Section 13.12 Maximum Interest Rate. . . . . . . . . . . 78
Section 13.13 Notices. . . . . . . . . . . . . . . . . . 79
Section 13.14 GOVERNING LAW; SUBMISSION TO
JURISDICTION; SERVICE OF PROCESS . . . . . 79
Section 13.15 Counterparts . . . . . . . . . . . . . . . 80
Section 13.16 Severability . . . . . . . . . . . . . . . 80
Section 13.17 Headings . . . . . . . . . . . . . . . . . 80
Section 13.18 Construction . . . . . . . . . . . . . . . 80
Section 13.19 Independence of Covenants. . . . . . . . . 80
Section 13.20 Confidentiality. . . . . . . . . . . . . . 80
Section 13.21 WAIVER OF JURY TRIAL . . . . . . . . . . . 81
Section 13.22 Approvals and Consent. . . . . . . . . . . 81
Section 13.23 Service of Process.. . . . . . . . . . . . 81
INDEX TO EXHIBITS
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Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowings, Conversions, Continuations
and Prepayments
Exhibit D - Form of Compliance Certificate
INDEX TO SCHEDULES
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Schedule 1.1(a) - Certain Permitted Holders
Schedule 1.1(b) - Certain Permitted Liens
Schedule 7.4 - Permits, Franchises and Authorizations required by
Governmental Requirements or issued by Governmental
Authorities
Schedule 7.5 - Intellectual Property
Schedule 7.6 - Litigation, Etc.
Schedule 7.7 - Real Property
Schedule 7.10 - Existing Debt
Schedule 7.13 - Plans
Schedule 7.15 - Subsidiaries
Schedule 7.22 - Material Contracts
Schedule 7.23 - Bank Accounts
Schedule 7.26 - Employee Matters
Schedule 7.27 - Insurance
Schedule 7.29 - Capitalization
Schedule 8.13 - Year 2000 Compliance
Schedule 8.17 - Assets Used in the Telecommunications Business of the
Borrower, Holdings and Their Subsidiaries Not Owned by
the Borrower
Schedule 9.5 - Certain Investments
Schedule 9.7 - Existing Relationships with Affiliates
Schedule 10. - Financial Covenants
CREDIT AGREEMENT
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THIS CREDIT AGREEMENT, dated as of June 4, 1999, is by and among CAIS,
INC. (the "Borrower"), a Virginia corporation, each of the lending entities
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which is a party hereto (as evidenced by the signature pages of this Agreement)
or which may from time to time become a party hereto as a lender or any
successor or assignee thereof (individually, a "Lender" and, collectively,
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the "Lenders"), and NORTEL NETWORKS INC., a Delaware corporation, as
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administrative agent for itself and the other Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
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RECITALS:
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A. The Borrower desires to obtain a $30,000,000 advancing term loan
facility to finance a portion of its costs to purchase Nortel Networks Goods and
Services.
B. The Lender(s) identified on the signature pages of this Agreement desire
to provide such credit facilities with the assistance of the Administrative
Agent upon and subject to the terms and provisions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
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Section 1.1 Definitions, etc. As used in this Agreement, the
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following terms shall have the following meanings:
"Additional Costs" means as specified in Section 4.1(a).
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"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
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Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of one percent) determined by the Administrative Agent to be
equal to (a) the Eurodollar Rate for such Eurodollar Loan for such Interest
Period divided by (b) one minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.
"Adjusted Net Income" means for any period, Consolidated Net Income
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excluding the following (without duplication) to the extent that any of the
following shall have been included in Consolidated Net Income for such period:
(a) any net gain arising from the sale of capital assets, (b) any net gain
arising from any write-up or write-down of assets, (c) earnings of any other
Person, substantially all of the assets of which have been acquired by Holdings
or a Consolidated Subsidiary of Holdings in any manner, to the extent that such
earnings were realized by such other Person prior to the date of such
acquisition, (d) earnings of any Person (other than a Consolidated
Subsidiary of Holdings) in which Holdings or a Consolidated Subsidiary has an
ownership interest, unless such earnings have actually been received by Holdings
or such Consolidated Subsidiary in the form of cash distributions, and (e) any
net gain arising from the acquisition of any securities of Holdings or a
Consolidated Subsidiary of Holdings.
"Administrative Agent" means as specified in the introductory paragraph
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of this Agreement.
"Administrative Agent's Letter" means the letter agreement dated as of
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June 4, 1999 between the Administrative Agent and the Borrower.
"Advances" means the Loans made under this Agreement.
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"Affiliate" means, as to any Person, any other Person (a) that directly
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or indirectly through one or more intermediaries controls or is controlled by,
or is under direct or indirect common control with, such first Person, (b) that
directly or indirectly beneficially owns or holds ten percent or more of any
class of voting Capital Stock of such first Person, or (c) ten percent or more
of the voting Capital Stock of which is directly or indirectly beneficially
owned or held by such first Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the Loan Documents, neither the Administrative Agent nor any Lender
shall be deemed to be an Affiliate of the Borrower or any Loan Party.
"Agreement" means this Agreement and any and all amendments,
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modifications, supplements, renewals, extensions or restatements hereof.
"Amortization Commencement Date" means the last day of the calendar
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quarter following the calendar quarter in which the Commitment Termination
Date occurs.
"Annualized EBIDTA" means EBITDA for the two most recently completed
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fiscal quarters multiplied by two.
"Applicable Lending Office" means for each Lender and each Type of Loan,
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the lending office of such Lender (or an Affiliate of such Lender) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the
Administrative Agent as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means the rate per annum equal to (a) with respect to
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each Base Rate Loan, three and three-fourths of one percent (3.75%) and (b) with
respect to each Eurodollar Loan, four and three-fourths of one percent (4.75%).
"Asset Disposition" means the disposition of any or all of the Property
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of the Borrower or any of its Subsidiaries, whether by sale, lease, transfer,
assignment, condemnation or otherwise, but excluding (a) sales of inventory in
the ordinary course of business, (b) the grant of a Lien as security, (c) any
involuntary disposition resulting from casualty damage to Property, and (d)
dispositions of equipment if and to the extent that the equipment disposed of
is, concurrently therewith, exchanged or replaced by equipment of equal or
greater value.
"Assignee" means as specified in Section 13.8(b).
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"Assigning Lender" means as specified in Section 13.8(b).
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"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and its Assignee and accepted by the Administrative Agent
pursuant to Section 13.8(e), in substantially the form of Exhibit A hereto.
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"Bankruptcy Code" means as specified in Section 11.1(e).
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"Base Rate" means, at any time, the greater of (a) the rate of interest
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per annum then most recently announced or established by the Reference Bank at
its principal office in New York City as its highest commercial prime or base
rate then in effect, or (b) the Federal Funds Rate then in effect plus one-half
of one percent (0.50%). The Base Rate may not necessarily be the lowest rate of
interest charged by the Reference Bank to its commercial borrowers. Each change
in any interest rate provided for herein based upon the prime or base rate or
the Federal Funds Rate resulting from a change in the prime or base rate or the
Federal Funds Rate, respectively, shall take effect without notice to the
Borrower at the time of such change in the prime or base rate or the Federal
Funds Rate, respectively.
"Base Rate Loans" means Loans that bear interest at rates based upon the
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Base Rate.
"Basle Accord" means the proposals for risk-based capital framework
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described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented and
otherwise modified and in effect from time to time, or any replacement thereof.
"Board of Directors" means the board of directors of the Borrower.
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"Board Resolution" means a copy of a resolution certified by the
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Secretary or an Assistant Secretary of the Borrower to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.
"Borrower" means as specified in the initial paragraph of this Agreement.
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"Business Day" means (a) any day other than a Saturday, Sunday or other
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day on which commercial banks are authorized or required by law to close in New
York, New York or Dallas, Texas, and (b) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods and notices in connection
with Eurodollar Loans, any day which is a Business Day described in clause (a)
above and which is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.
"Business Plan" means the Borrower's marketing and build-out plans,
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budget and schedule, including financial projections of Holdings, the Borrower
and the Consolidated Subsidiaries for the seven year period beginning on the
Closing Date, certified as being prepared generally in accordance with GAAP
(except for the absence of footnotes), such projections giving effect to the
Debt to be incurred under this Agreement as well as the other Debt to be
incurred by Holdings, the Borrower and the Consolidated Subsidiaries during such
period.
"Capital Expenditures" means amounts paid or Debt incurred by Holdings
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and/or any of its Subsidiaries in connection with the purchase or lease by any
such Person or Persons of Property that would be required to be capitalized and
shown on the balance sheet of such Person or Persons in accordance with GAAP.
"Capital Lease Obligations" means, as to any Person, the obligations of
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such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations are
classified as a capital lease on a balance sheet of such Person under GAAP. For
purposes of this Agreement, the amount of such Capital Lease Obligations shall
be the capitalized amount thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all securities, shares,
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partnership interests, limited partnership interests, limited liability company
interests, membership interests, equity interests, participations, rights or
other equivalents (however designated) of corporate stock or any of the
foregoing issued by any entity (whether a corporation, a partnership or another
entity)and includes, without limitation, securities convertible into Capital
Stock and rights or options to acquire Capital Stock.
"Change in Control" means the existence or occurrence of any of the
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following: (a) any of the Capital Stock of the Borrower is owned by any Person
other than Holdings; (b) any Capital Stock of any Subsidiary of the Borrower is
owned by any Person other than the Borrower or any Wholly-Owned Subsidiary of
the Borrower, (c) any Person or two or more Persons (other than the Permitted
Holders) acting as a group (as defined in Section 13d-3 of the Exchange Act)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Exchange Act) of 35% or more of
the outstanding shares of Voting Stock of Holdings; (d) individuals who, as of
the Closing Date, constitute the Board of Directors of
Holdings (the "Holdings Incumbent Board") cease for any reason to constitute
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at least a majority of the Board of Directors of Holdings; provided, however,
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that any individual becoming a director of Holdings subsequent to the Closing
Date whose election, or nomination for election by Holdings' shareholders was
approved by a vote of at least a majority of the directors then comprising the
Holdings Incumbent Board shall be considered as though such individual were a
member of the Holdings Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or contest by or on behalf of a Person other
than the Board of Directors of Holdings or (e) the consummation of any
transaction the result of which is that any Person or group beneficially owns
more of the Voting Stock of Holdings than is beneficially owned, in the
aggregate, by the Permitted Holders.
"Closing Date" means June 4, 1999, the date of this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended, and the
----
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any Person of any nature whatsoever
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upon which a Lien is created or purported to be created by any Loan Document as
security for the Obligations or any portion thereof.
"Commitment" means, as to any Lender, the obligation of such Lender to
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make or continue Loans hereunder in an aggregate principal amount up to but not
exceeding the amount set forth opposite the name of such Lender on the signature
pages hereto under the heading "Commitment" or, if such Lender is a party to an
Assignment and Acceptance, the amount of the "Commitment" set forth in the most
recent Assignment and Acceptance of such Lender, as the same may be reduced or
terminated pursuant to Section 2.13 or 11.2, and
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"Commitments" means such obligations of all Lenders. As of the Closing Date,
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the aggregate principal amount of the Commitments is $30,000,000.
"Commitment Percentage" means, as to any Lender and its Commitment, the
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percentage equivalent of a fraction, the numerator of which is the amount of the
outstanding Commitments of such Lender (or, if such Commitment has terminated or
expired, the outstanding principal amount of Loans of such Lender) and the
denominator of which is the aggregate amount of the outstanding Commitments of
all Lenders (or, if such Commitments have terminated or expired, the aggregate
outstanding principal amount of Loans of all Lenders), as adjusted from time to
time in accordance with Section 13.8.
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"Commitment Termination Date" means the earlier to occur of (a) eighteen
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months after the Closing Date or (b) the initial date upon which the Loans have
become fully funded in an aggregate amount equal to the Commitments (as
such Commitments may be reduced or terminated pursuant to Section 2.13 or
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11.2).
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"Communications Act" means the Communications Act of 1934, and any
------------------
similar or successor federal statute, and the rules and regulations of the FCC
thereunder, all as amended and as the same may be in effect from time to time.
"Consolidated Fixed Charges" means, for any period, the sum of (a)
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Consolidated Interest Expense for Holdings and its Consolidated Subsidiaries
paid or payable in cash during such period, plus (b) all scheduled payments (as
such scheduled payments are reduced by application of any prepayments) of
principal with respect to the Loans and other outstanding Debt during such
period, plus (c) taxes of Holdings and its Consolidated Subsidiaries paid or
payable in cash during such period, plus (d) the scheduled amount paid or
payable by Holdings and its Consolidated Subsidiaries in cash during such period
on account of Capital Expenditures.
"Consolidated Interest Expense" means, for any period, all interest on
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Debt of Holdings and its Consolidated Subsidiaries paid in cash during such
period, including the interest portion of payments under capital lease
obligations.
"Consolidated Net Income" means, for any period, the net income (or loss)
-----------------------
of Holdings and its Consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means, with respect to any Person, any
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Subsidiary the financial attributes of which is or would be consolidated with
those of such Person in the consolidated financial statements of such Person in
accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
-------- ------------ ---------
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 13.12(a).
-------------
"Contributed Capital" means, for any period, the sum of (a) equity
-------------------
contributions during such period (including equity contributed on or before the
Closing Date), minus (b) any distributions of cash or Property (other than
Capital Stock) made during such period minus (c) all cash interest paid on
Subordinated Debt during such period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Current Date" means (a) a date occurring no more than 30 days prior to
------------
the Closing Date or other relevant date as may be specified herein (as
applicable) or (b) such earlier date which is acceptable to the Administrative
Agent.
"Debt" means as to any Person at any time (without duplication): (a) all
----
indebtedness, liabilities and obligations of such Person for borrowed money, (b)
all indebtedness, liabilities and obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable of such Person arising in
the ordinary course of business that are not past due by more than 90 days, (d)
all Capital Lease Obligations of such Person, (e) all Debt of others Guaranteed
by such Person, (f) all indebtedness, liabilities and obligations secured by a
Lien existing on Property owned by such Person, whether or not the indebtedness,
liabilities or obligations secured thereby have been assumed by such Person or
are non-recourse to such Person, (g) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds and similar instruments, (h) all
indebtedness, liabilities and obligations of such Person to redeem or retire
shares of Capital Stock of such Person, (i) all indebtedness, liabilities and
obligations of such Person under Interest Rate Protection Agreements, and (j)
all indebtedness, liabilities and obligations of such Person in respect of
unfunded vested benefits under any pension plans.
"Default" means an Event of Default or the occurrence of an event or
-------
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan at all
------------
times during which any Default has occurred and is continuing or in respect of
any other amount payable by the Borrower under this Agreement or any other Loan
Document which is not paid when due (whether at stated maturity, by acceleration
or otherwise), a rate per annum during the period of such Default or during the
period commencing on the due date of such other amount until such other amount
is paid in full equal to the lesser of (a) the sum of three percent (3.00%) plus
the Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans or (b) the Maximum Rate; provided,
---------
however, that if such amount in default is principal of a Eurodollar Loan and
--------
the due date is a day other than the last day of an Interest Period therefor,
the "Default Rate" for such principal shall be, for the period from and
including the due date and to but excluding the last day of the Interest Period
therefor, the lesser of the rate per annum equal to (A) the sum of three percent
(3.00%) plus the interest rate for such Eurodollar Loan for such Interest Period
as provided in clause (ii) of Section 2.4(a) hereof or (B)
----------- --------------
the Maximum Rate and, thereafter, the rate provided for above in this
definition.
"Dollars" and "$" mean lawful money of the U.S.
-------
"EBITDA" means, for any period, without duplication, the sum of the
------
following for Holdings and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP: (a) Adjusted Net
Income, plus (b) Consolidated Interest Expense, plus (c) income and franchise
taxes to the extent deducted in determining Adjusted Net Income, plus (d)
depreciation and amortization expense and other non-cash, non-tax items to the
extent deducted in determining Adjusted Net Income, minus (e) non-cash income
(or losses) to the extent included in determining Adjusted Net Income.
"Eligible Assignee" means (a) any Affiliate of a Lender, (b) any
-----------------
commercial bank, savings and loan association, savings bank, finance company,
insurance company, pension fund, mutual fund or other financial institution
(whether a corporation, partnership or other entity) which has been approved by
the Administrative Agent as a Lender under this Agreement or (c) any other
entity approved by the Administrative Agent which is (or which is managed by a
manager which manages funds which are) primarily engaged in making, purchasing
or otherwise investing in commercial loans or extending, or investing in
extensions of, credit for its own account in the ordinary course of its
business; provided, however, that (i) Eligible Assignee shall not include any
Affiliate of the Borrower and (ii) Eligible Assignee shall not include any
business competitor of Holdings or any of its Subsidiaries except after the
occurrence and during the continuance of an Event of Default.
"Environmental Law" means any federal, state, provincial, local or
-----------------
foreign law, statute, code or ordinance, principle of common law, rule or
regulation, as well as any Permit, order, decree, judgment or injunction
issued, promulgated, approved or entered thereunder, relating to pollution
or the protection, cleanup or restoration of the environment or natural
resources, or to the public health or safety, or otherwise governing the
generation, use, handling, collection, treatment, storage, transportation,
recovery, recycling, discharge or disposal of Hazardous Materials, including,
without limitation as to U.S. laws, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., the
Superfund Amendment and Reauthorization Act of 1986, 99-499, 100 Stat. 1613,
the Resource Conservation and Recovery Act of 1976, 42 U. S. C. ss. 6901
et seq., the Occupational Safety and Health Act, 29 U S.C. ss. 651 et seq., the
Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Clean Water Act, 33 U. S. C. ss.
1251 et seq., the Emergency Planning and Community Right to Know Act, 42 U. S.
C. ss. 11001 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. ss. 136 et seq., and the Toxic Substances Control Act, 15 U.S.C. ss. 2601
et seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
-------------------------
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal, penal or civil statute, including,
without limitation, any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
---------------
member of a group of entities, organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon the
----------------
Eurodollar Rate or the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
---------------
therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16
of 1%) appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars in the approximate amount of the
proposed Eurodollar Loan at approximately 11:00 a.m. (London time)two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If such rate ceases to be available from Telerate News
Service, the Eurodollar Rate shall be determined by the Administrative Agent in
good faith from another financial reporting service, which service shall be
reasonably acceptable to the Borrower.
"Event of Default" has the meaning specified in Section 11.1.
----------------
"Excess Cash Flow" means for any fiscal year EBITDA for such fiscal year
----------------
minus (a) taxes payable in cash for such fiscal year, (b) all principal and cash
interest payments on Debt made during such fiscal year whether optional,
mandatory or scheduled payments, and (c) capital expenditures (but only to the
extent paid in cash and not financed) made during such fiscal year.
"Excess Proceeds Amount" means as specified in Section 2.7(a).
----------------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended (or
------------
any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"FCC" means the Federal Communications Commission and any successor
---
agency.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of 1%))
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if such
rate is not so published on such next succeeding Business Day, the Federal Funds
Rate for any day shall be the average rate which would be charged to the
Reference Bank on such day on such transactions as determined by the
Administrative Agent.
"GAAP" means generally accepted accounting principles, applied on a
----
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state,
----------------------
provincial or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Requirement" means any law, statute, code, ordinance,
------------------------
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, license, authorization or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Gross Revenues" means, for any period, gross revenues, determined on a
--------------
consolidated basis, of Holdings and its Consolidated Subsidiaries determined in
accordance with GAAP for such period.
"Guarantee" by any Person means any obligation, contingent or otherwise,
---------
of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any
indebtedness, liability or obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other indebtedness,
liability or obligation as to the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"Guarantors" means Holdings, each Subsidiary of the Borrower at any time
----------
existing and each other Person which has executed a Guaranty (each individually
a "Guarantor" and collectively the "Guarantors").
"Guaranty" means a guaranty agreement guaranteeing payment and
--------
performance of the Obligations in form and substance satisfactory to the
Administrative Agent executed by a Guarantor in favor of the Administrative
Agent and the Lenders, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"▇▇▇▇▇▇▇ Contract" means that certain Master Agreement for Hotel Internet
----------------
Service dated as of May 18, 1999, by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels, LP,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Hotels Two, LP and the Borrower, as the same may have been
amended or modified prior to the Closing Date and as may thereafter be amended
or modified as permitted by this Agreement.
"Hazardous Material" means any substance, product, liquid, waste,
------------------
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is, or
is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic,
a pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any Environmental Law, including, without limitation,
asbestos, petroleum, underground storage tanks (whether empty or containing any
substance) and polychlorinated biphenyls.
"Hilton Contract" means that certain Master License Agreement dated as of
---------------
December 23, 1998, by and between Hilton Hotels Corporation and the Borrower, as
the same may have been amended or modified prior to the Closing Date and as may
thereafter be amended or modified as permitted by this Agreement.
"Holdings" means CAIS Internet, Inc., a Delaware corporation.
--------
"Inline Contract" means that certain Agreement for Cooperative Use of
---------------
Communications Patents dated as of November 5, 1996 among Inline Connection
Corporation, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the Borrower, as the same may have been
amended or modified prior to the Closing Date and as may thereafter be amended
or modified as permitted by this Agreement.
"Insurance Recovery" means, with respect to any Property of the Borrower
------------------
or any of its Subsidiaries and any single occurrence or related occurrences with
respect thereto, the receipt or constructive receipt by such Loan Party, or the
payment by an insurance company to the Administrative Agent, of proceeds of any
such Property or casualty insurance.
"Intellectual Property" means any U.S. or foreign patents, patent
---------------------
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service ▇▇▇▇ registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
"Intercompany Subordinated Debt" means Subordinated Debt of the Borrower
------------------------------
owed to Holdings which by its terms provides that no amount of principal or
interest (other than payments in kind) shall be payable until a date subsequent
to the date the Obligations have been paid in full and which is otherwise on
terms satisfactory to the Administrative Agent.
"Interest Period" means, with respect to any Eurodollar Loan, each period
---------------
commencing on the date such Loan is made or Converted from a Base Rate Loan or
(if Continued) the last day of the next preceding Interest Period with respect
to such Loan, and ending on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the Borrower may select as
provided in Section 2.9 hereof, except that each such Interest Period which
commences on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (a) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Maturity Date shall end on the
Maturity Date; (c) no more than five Interest Periods for Eurodollar Loans shall
be in effect at the same time; (d) no Interest Period shall have a duration of
less than one month and, if the Interest Period for any Eurodollar Loans would
otherwise be a shorter period, such Loans shall not be available hereunder; and
(e) no Interest Period for a Term Loan may commence before, and end after, any
principal payment date unless, after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans having Interest Periods that end after
such principal payment date shall be equal to or less than the amount of the
applicable Loans scheduled to be outstanding hereunder after such principal
payment date.
"Interest Rate Protection Agreements" means, with respect to the
-----------------------------------
Borrower, an interest rate swap, cap or collar agreement or similar arrangement
between the Borrower and one or more counterparties rated in one of the three of
the highest rating categories of Standard & Poors Corporation or ▇▇▇▇▇'▇
Investors Services, Inc. and otherwise reasonably acceptable to the
Administrative Agent providing for the transfer or mitigation of interest rate
risks either generally or under specified contingencies.
"Investments" means as specified in Section 9.5.
-----------
"Lender" and "Lenders" means as specified in the initial paragraph of
------ -------
this Agreement.
"Lien" means, with respect to any Property, any mortgage or deed of
----
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, tax lien, financing statement, pledge, charge, hypothecation or other
lien, charge, easement (other than any easement not materially impairing
usefulness), encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property (including, without limitation, any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Loan Documents" means this Agreement, the Notes, the Security Documents,
--------------
the Administrative Agent's Letter and all other agreements, documents,
instruments and certificates now or hereafter executed and/or delivered pursuant
to or in connection with any of the foregoing, and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof.
"Loan Party" means the Borrower, Holdings, any Guarantor or any Person
----------
who grants a Lien on any Property to secure the payment or performance of the
Obligations or any portion thereof, and "Loan Parties" means all of such
Persons.
"Loans" means as specified in Section 2.1(a).
-----
"Master Purchase Agreement" means the that certain Global Purchase
-------------------------
Agreement dated as of April 1, 1999, by and between the Borrower and Nortel
Networks, as amended, supplemented or restated from time to time.
"Material Adverse Effect" means any event, development or circumstance
-----------------------
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, financial condition, results of operations or
prospects of Holdings and its Subsidiaries taken as a whole, (b) the business,
assets, financial condition, results of operations or prospects of the Borrower
individually or of the Borrower and its Subsidiaries, if any, taken as a whole,
(c) the validity or enforceability of any of the Loan Documents or the rights
and remedies of the Administrative Agent and the Lenders thereunder, (d) the
ability of any Loan Party to pay and perform its indebtedness, liabilities
and/or obligations under any of the Loan Documents, or (e) the value of
Collateral available to the Administrative Agent and the Lenders after giving
effect to Liens in favor of other Persons.
"Material Contracts" means, as to any Loan Party, any supply, purchase,
------------------
service, employment, tax, indemnity, shareholder or other agreement or contract
for which the aggregate amount or value of services performed or to be performed
for or by, or funds or other Property transferred or to be transferred to or by,
any Loan Party to such agreement or contract, or by which any Loan Party or any
of its Properties is otherwise bound, during any fiscal year of the Borrower
exceeds $250,000 (or the equivalent amount in any currency) and any and all
amendments, modifications, supplements, renewals or restatements thereof.
"Maturity Date" means the fifth anniversary of the Closing Date.
-------------
"Maximum Rate" means, with respect to any Lender, the maximum
------------
non-usurious interest rate or an amount computed in reference to such rate (as
applicable), if any, that any time or from time to time may be contracted for,
taken, reserved, charged or received with respect to the particular Obligations
as to which such rate is to be determined, payable to such Lender pursuant to
this Agreement or any other Loan Document, under laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow. The Maximum
Rate shall be calculated in a manner that takes into account any and all fees,
payments and other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate.
"Monthly Date" means the last day of each month of each year the first of
------------
which shall be September 30, 1999.
"Multiemployer Plan" means a multiemployer plan defined as such in
------------------
Section 3(37) of ERISA to which contributions have been made by or are required
from the Borrower or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
------------
gross amount of cash received by the Borrower or any of its Subsidiaries from
such Asset Disposition, minus (b) the amount, if any, of all taxes paid or
payable by the Borrower or any of its Subsidiaries directly resulting from such
Asset Disposition (including the amount, if any, estimated by the Borrower in
good faith at the time of such Asset Disposition for taxes payable by the
Borrower or any of its Subsidiaries on or measured by net income or gain
resulting from such Asset Disposition), minus (c) the reasonable out-of-pocket
costs and expenses incurred by the Borrower or such Subsidiary in connection
with such Asset Disposition (including reasonable brokerage fees paid to a
Person other than an Affiliate of the Borrower) excluding any fees or expenses
paid to an Affiliate of the Borrower, minus (d) amounts applied to the repayment
of indebtedness (other than the Obligations) secured by any Permitted Lien (if
any) on the Property subject to the Asset Disposition. "Net Proceeds" with
respect to any Asset Disposition shall also include proceeds (after deducting
any amounts specified in clauses (b), (c) and (d) of the preceding sentence) of
insurance with respect to any actual or constructive loss of Property, an agreed
or compromised loss of Property or the taking of any Property under the power of
eminent domain and condemnation awards and awards in lieu of condemnation for
the taking of Property under the power of eminent domain.
"Nortel Networks" means Nortel Networks Inc., a Delaware corporation.
---------------
"Nortel Networks Equipment" means all equipment sold to the Borrower
-------------------------
pursuant to the Master Purchase Agreement.
"Nortel Networks Goods and Services" means sales, installation and
----------------------------------
commissioning of Nortel Networks Equipment and related software, and project
management, system design and services performed by Nortel Networks personnel.
"Nortel Networks Software" means any and all software sold or licensed by
------------------------
Nortel Networks to the Borrower, including, without limitation, all source code
and object code and all manuals and other documentation relating thereto and
each copy thereof regardless of the media in which they are stored.
"Notes" means the Notes in the form of Exhibit B hereto made by the
-----
Borrower evidencing the Loans and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof and all substitutions
therefor (including promissory notes issued by the Borrower pursuant to Section
13.8), and "Note" means any such promissory note.
"Notice of Borrowing" means as specified in Section 2.9.
-------------------
"Obligations" means any and all (a) indebtedness, liabilities and
obligations of the Borrower or any other Loan Party to the Administrative Agent
and the Lenders, or any of them, evidenced by and/or arising pursuant to any of
the Loan Documents (including, without limitation, this Agreement and the
Notes), now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint
and several, including, without limitation, (i) the obligations of the Borrower
or any other Loan Party to repay the Loans, to pay interest on the Loans
(including, without limitation, interest accruing after any, if any, bankruptcy,
insolvency, reorganization or other similar filing) and to pay all fees,
indemnities, costs and expenses (including attorneys' fees) provided for in the
Loan Documents and (ii) the indebtedness constituting the Loans and such
interest, fees, indemnities, costs and expenses, and (b) indebtedness,
liabilities and obligations of the Borrower or any other Loan Party under any
and all Interest Rate Protection Agreements that it may enter into with any
Lender with the prior written consent of the Administrative Agent and the
Required Lenders.
"OverVoice System" means the patented and proprietary technology licensed
----------------
by and/or owned by the Borrower that allows delivery of high speed internet
access over copper wire, simultaneous internet and telephone usage and ethernet
local area networking, which technology the Borrower is deploying primarily in
hotels and multiple dwelling units.
"OverVoice System Properties" means properties, including hotels and
---------------------------
multiple dwelling units, at which the Borrower has installed or will install the
OverVoice System.
"Payor" means as specified in Section 3.4.
-----
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to all or any of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
------------
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the case
of a Multiemployer Plan, at any time since September 2, 1974, by any Borrower or
any ERISA Affiliate for employees of any Borrower or any ERISA Affiliate.
"Permit" means any permit, certificate, approval, order, license,
------
right-of-way (whether an easement, contract or agreement in any form) or other
authorization.
"Permitted Holders" means (a) the Persons identified on Schedule 1.1(a)
-----------------
hereto and (b) any spouse, parent, sibling, child or grandchild of any of the
aforesaid individuals (in each case, whether such relationship arises from
birth, adoption or through marriage) or any trust established for the benefit of
any such individuals or any spouse, parent, sibling, child or grandchild of any
such individuals (in each case whether such relationship arises from birth,
adoption or through marriage).
"Permitted Liens" mean:
---------------
(a) Liens disclosed on Schedule 1.1(b) hereto;
(b) Liens securing the Obligations in favor of the Administrative
Agent (for the benefit of the Administrative Agent and the Lenders)
pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, rights-of-way, zoning
restrictions or other restrictions on the use of real Property or
imperfections to title that do not (individually or in the aggregate)
materially affect the value of the Property encumbered thereby or
materially impair the ability of the Borrower or any of its Subsidiaries to
use such Property in its businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(d) Liens for taxes, assessments or other governmental charges
that are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the Property subject to such Liens, and for which
adequate reserves (as determined under GAAP consistently applied) have been
established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords or other similar statutory Liens securing obligations that are
not yet due and are incurred in the ordinary course of business or which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
Property subject to such Liens, and for which adequate reserves (as
determined under GAAP consistently applied) have been established;
(f) Liens resulting from good faith deposits or pledges to secure
payment of worker's compensation or other social security programs or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, contracts (other than for payment of Debt) or leases, all in
the ordinary course of business;
(g) Liens on Property other than (i) the Collateral and (ii) the
Service Agreements; and
(h) Any extension, renewal or replacement of any of the
foregoing, provided that Liens permitted hereunder shall not be extended or
spread to cover any additional indebtedness or Property.
"Person" means any individual, corporation, trust, association, company,
------
partnership, joint venture, limited liability company, joint stock company,
Governmental Authority or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
----
ERISA established or maintained or contributed to by any Loan Party or any ERISA
Affiliate, including any Pension Plan.
"Principal Office" means the principal office of the Administrative Agent
----------------
in Richardson, Texas, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇.
"Prohibited Transaction" means any transaction set forth in Section 406
----------------------
of ERISA or Section 4975 of the Code.
"Property" means property and assets of all kinds, real, personal or
--------
mixed, tangible or intangible (including, without limitation, all rights
relating thereto), whether owned or acquired on or after the Closing Date.
"Quarterly Date" means the last day of each March, June, September and
--------------
December of each year, the first of which shall be September, 1999.
"Receivables" means, as at any date of determination thereof, each and
-----------
every "account" as such term is defined in the UCC and includes, without
limitation, the unpaid portion of the obligation, as stated on the respective
invoice, or, if there is no invoice, other writing, of a customer of the
Borrower or any of its Subsidiaries in respect of services rendered by the
Borrower or any of its Subsidiaries.
"Reference Bank" means Citibank, N.A.
--------------
"Register" means as specified in Section 13.8(d).
--------
"Registered Note" means as specified in Section 2.2(b).
---------------
"Registered Note Register" means as specified in Section 13.8(h).
------------------------
"Regulation D" means Regulation D of the Board of Governors of the
------------
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Lender, any change after
-----------------
the Closing Date in any U.S. federal or state or foreign laws or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives or requests applying to a class of lenders including
such Lender of or under any U.S. federal or state or foreign laws or regulations
(whether or not having the force of law) by any Governmental Authority charged
with the interpretation or administration thereof.
"Release" means, as to any Person, any release, spill, emission, leaking,
-------
pumping, injection, deposit, discharge, disposal, dispersement, leaching or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water or
ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
---------------
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform
post-remedial monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043(b)
----------------
of ERISA other than any such event for which the 30-day notice requirement has
been waived in regulations issued by the PBGC.
"Required Lenders" means, at any date of determination, Lenders holding
----------------
at least two-thirds (in Dollar amount) of the sum of (a) the outstanding
principal amount of the Loans, plus (b) the principal amount of the outstanding
Commitments.
"Required Payment" means as specified in Section 3.4.
----------------
"Reserve Requirement" means, for any Eurodollar Loan of any Lender for
-------------------
any Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $1,000,000 against "Eurocurrency Liabilities" as such term is used in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
Lenders by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate or
the Adjusted Eurodollar Rate is to be determined or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Responsible Officer" means, as to the Borrower, the chief executive
-------------------
officer, the president, any vice president, the chief financial officer, the
chief operating officer or the treasurer of such Person.
"Restricted Payment" means (a) any dividend or other distribution
------------------
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries now or hereafter outstanding;
(c) any payment or prepayment of principal of, premium, if any, or interest on,
or any redemption, conversion, exchange, purchase, retirement or defeasance of,
or payment with respect to, any subordinated debt; (d) any loan, advance or
payment to any officer, director or shareholder of the Borrower or any of its
Subsidiaries (other than a shareholder consisting of the Borrower or a
Wholly-Owned Subsidiary of the Borrower),
exclusive of reasonable compensation paid to officers or directors paid in the
ordinary course of business; and (e) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
now or hereafter outstanding.
"Security Agreements" means security agreements, pledge agreements,
-------------------
securities pledge agreements and other agreements, documents or instruments
evidencing or creating a Lien as security for the Obligations or any portion
thereof in form and substance satisfactory to the Administrative Agent executed
by any Loan Party, in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders, and any such agreement, document or
instrument subsequently executed in accordance or connection with this Agreement
or any other Loan Document, and any and all amendments, modifications,
supplements, renewals, extensions or restatements thereof.
"Security Documents" means the Security Agreements, as they may be
------------------
amended, modified, supplemented, renewed, extended or restated from time to
time, and any and all other agreements, deeds of trust, mortgages, chattel
mortgages, security agreements, pledges, guaranties, assignments of proceeds,
assignments of income, assignments of contract rights, assignments of
partnership interests, assignments of royalty interests, assignments of
performance or other collateral assignments, subordination agreements,
undertakings and other agreements, documents, instruments and financing
statements now or hereafter executed and/or delivered by any Person in
connection with or as security or assurance for the payment or performance of
the Obligations or any part thereof.
"Service Agreement" means any service agreement, license agreement or
-----------------
other agreement, including, without limitation, the Hilton Contact and the
▇▇▇▇▇▇▇ Contract, relating to any hotel property, multiple dwelling unit
property or other property at which Nortel Networks Equipment is utilized by the
Borrower to operate an OverVoice System and/or to provide internet services.
"Service Agreement Revenues" means the revenues, payments, accounts
--------------------------
receivable, proceeds, monies or other amounts received by or payable to the
Borrower under any Service Agreement.
"Solvent" means, with respect to any Person as of the date of any
-------
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and
anticipated future business conduct and the prevailing practice in the industry
in which such Person is engaged. In computing the amount of contingent
liabilities at any time, such liabilities shall be computed at the amount which,
in light of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means, unsecured Debt the payment of which is
-----------------
structurally or contractually subordinated to the payment of the Loans on terms
satisfactory to the Administrative Agent and the Required Lenders and as to
which the payment of principal of (and premium, if any) and interest and other
payment obligations in respect of such Debt shall be subordinate to the prior
payment in full of the Obligations to at least the following extent: (a) no
payments of principal of (or premium, if any) or interest on or otherwise due in
respect of such Debt may be permitted for so long as any Default in the payment
of principal (or premium, if any) or interest on the Obligations exists; and (b)
such Debt may not (i) provide for payments of principal of such Debt at the
stated maturity thereof or by way of a sinking fund applicable thereto or by way
of any mandatory redemption, defeasance, retirement or repurchase thereof
(including any redemption, retirement or repurchase which is contingent upon
events of circumstances but excluding any retirement required by virtue of
acceleration of such Debt upon any event of default thereunder), in each case
prior to 6 months after the final stated maturity of the Loans or (ii) permit
redemption or other retirement (including pursuant to an offer to purchase made
by the obligor thereon) of such other Debt at the option of the holder thereof
prior to the final stated maturity of the Loans, other than a redemption or
other retirement at the option of the holder of such Debt (including pursuant to
an offer to purchase made by the obligor thereon) which is conditioned upon a
change of control of the obligor thereon pursuant to provisions set forth in the
instruments evidencing such Debt.
"Subsidiary" means, with respect to any Person, any corporation or other
----------
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms hereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar functions) of
such corporation or entity (irrespective of whether or not at the time, in the
case of a corporation, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more of its Subsidiaries or by sch Person and one or more of
its Subsidiaries .
"Total Capitalization" means, as of any date, Total Debt of Holdings and
--------------------
its Consolidated Subsidiaries as of that date plus Contributed Capital of
Holdings as of that date.
"Total Debt" means, as of any date, the aggregate principal amount of all
----------
Debt of Holdings and its Consolidated Subsidiaries outstanding.
"Type" means any type of Loan (i.e., a Base Rate Loan or Eurodollar
----
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of New
---
York and/or any other jurisdiction, the laws of which may be applicable to or in
connection with the creation, perfection or priority of any Lien on any Property
created pursuant to any Security Document.
"U.S." means the United States of America.
----
"U.S. Person" means a citizen or resident of the U.S., a corporation,
-----------
partnership or other entity created or organized in or under any laws of the
U.S. or any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"U.S. Taxes" means any present or future tax, assessment or other charge
----------
or levy imposed by or on behalf of the U.S. or any taxing authority thereof.
"Vendor" means Nortel Networks in its capacity as vendor under the Supply
------
Agreement.
"Voting Stock" of any Person means Capital Stock of such Person which
------------
ordinarily has voting power for the election of directors, managers or general
partners (or persons performing similar functions) of such Person, whether at
all times or only for so long as no senior class of securities has such voting
power by reason of any contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, a Subsidiary
-----------------------
of such Person all of whose outstanding Capital Stock (other than directors'
qualifying shares, if any) shall at the time be owned by such Person and/or one
or more of its Wholly-Owned Subsidiaries .
"Year 2000 Compliant" means that (a) the services, products or other
-------------------
item(s) at issue accurately process, provide and/or receive all date/time data
(including calculating, comparing, sequencing, processing and outputting)
within, from, into and between centuries (including the twentieth and
twenty-first centuries and the years 1999 and 2000), including leap year
calculations, and (b) neither the performance nor the functionality nor the
business' provision of the services, products and other item(s) at issue will be
affected by any dates/times prior to, on, after or spanning January 1, 2000. The
design of the services, products and other item(s) at issue to ensure compliance
with the "year 2000" representations and warranties and covenants contained in
this Agreement includes proper date/time data century recognition and
recognition of 1999 and 2000, calculations that accommodate single century and
multi-century formulae and date/time values before, on, after and spanning
January 1, 2000, and date/time data interface values that reflect the century,
1999 and 2000. In particular, but without limitation, such design means that (i)
no value for current date/time will cause any error, interruption or decreased
performance in or for such services, products and other item(s), (ii) all
manipulations of date and time related data (including calculating, comparing,
sequencing processing and outputting) will produce correct results for all valid
dates and times when used independently or in combination with other services,
products and/or items, (iii) date/time elements in interfaces and data storage
will specify the century to eliminate date ambiguity without human intervention,
including leap year calculations,
(iv) where any date/time element is represented without a century, the correct
century will be unambiguous for all manipulations involving that element, (v)
authorization codes, passwords and zaps (purge functions) will function normally
and in the same manner during, prior to, on and after January 1, 2000, including
the manner in which they function with respect to expiration dates and CPU
serial numbers, and (vi) the business' supply of the services, products and
other item(s) will not be interrupted, delayed, decreased or otherwise affected
by the advent of the year 2000.
Section 1.2 Other Definitional Provisions. All definitions contained
-----------------------------
in this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. The term "continuing",
"continuation" or "continuance" means, in reference to any Default or Event of
Default that has occurred, that such Default or Event of Default has not been
either cured to the reasonable satisfaction of the Administrative Agent within
the applicable grace period (if any) specified in this Agreement or the other
Loan Documents (as applicable) or waived in writing by the requisite Lenders in
accordance with Section 13.11. Unless otherwise specified, all Article and
Section references pertain to this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein, shall have the meanings specified
in the UCC. All references in this Agreement to any agreement shall be deemed to
mean and refer to such agreement as it may be amended, modified or supplemented
from time to time if (but only if) such amendment, modification or supplement
has been approved by the Administrative Agent and the Required Lenders, is
expressly referred to in such reference or is otherwise expressly permitted by
the terms of this Agreement.
Section 1.3 Accounting Terms and Determinations.
-----------------------------------
(a) All accounting terms not specifically defined herein shall be construed
in accordance with GAAP (subject to year end adjustments, if applicable)
consistent with such accounting principles applied in the preparation of the
audited financial statements referred to in Section 7.2(a). All financial
information delivered to the Administrative Agent pursuant to Section 8.1 shall
be prepared in accordance with GAAP (subject to year end adjustments, if
applicable) applied on a basis consistent with such accounting principles
applied in the preparation of the audited financial statements of such Person
referred to in Section 7.2 or in accordance with Section 8.7.
(b) The Borrower shall deliver to the Administrative Agent (who shall
deliver the same to the Lenders), at the same time as the delivery of any annual
or quarterly financial statement under Section 8.1, (i) a description, in
reasonable detail, of any material variation between the application of GAAP
employed in the preparation of the next preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of subsection (a) preceding and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance with the
covenants set forth in this Agreement, the Borrower will not change the last day
of its fiscal year from December 31 or the last days of the first three fiscal
quarters of the Borrower in each of its fiscal years from March 31, June 30 and
September 30, respectively.
(d) Unless otherwise expressly provided herein to the contrary, all
references herein to the Closing Date shall be deemed to mean and refer to the
Closing Date after giving effect to all transactions which occur on or before
such date.
Section 1.4 Financial Covenants and Reporting. All financial
----------------------------------
statements and reports required to be delivered pursuant to this Agreement and
the other Loan Documents, and all financial covenants (if any) contained in this
Agreement, shall be prepared or determined (as applicable) in accordance with
GAAP (except as may be expressly provided to the contrary herein) and, if and to
the extent that such statements, reports or covenants are to be prepared or
determined on a consolidated basis, shall be prepared or determined on a
consolidated basis for Holdings and its Subsidiaries (except as may be expressly
provided to the contrary herein).
ARTICLE 2
Loans
-----
Section 2.1 Commitments.
------------
(a) Loans. Subject to the terms and conditions of this Agreement
-----
(including, without limitation, Section 2.13(a)), each Lender severally agrees
---------------
to make one or more loans to the Borrower from time to time from and including
the Closing Date to but excluding the Commitment Termination Date up to but not
exceeding the amount of such Lender's Commitment as then in effect. (Such loans
referred to in this Section 2.1(a) now or hereafter made by the Lenders
--------------
to the Borrower, including, without limitation, such loans which remain
outstanding after the Commitment Termination Date, are hereinafter
collectively called the "Loans".) The Borrower may not reborrow the Loans
-----
which have been repaid.
(b) Continuation and Conversion of Loans. Subject to the terms and
------------------------------------
conditions of this Agreement, the Borrower may borrow the Loans as Base Rate
Loans or Eurodollar Loans and, until the Maturity Date, the Borrower may
Continue Eurodollar Loans or Convert Loans of one Type into Loans of the other
Type.
(c) Lending Offices. Loans of each Type made by each Lender shall be
----------------
made and maintained at such Lender's Applicable Lending Office for Loans of such
Type.
Section 2.2 Notes.
------
(a) Notes. The Loans made by each Lender shall be evidenced by a single
------
promissory note of the Borrower in substantially the form of Exhibit B hereto
dated the Closing Date (or such later date on which such Lender becomes a party
to this Agreement), payable to the order of such Lender in a principal amount
equal to the sum of (i) the aggregate principal amount of Loans of such Lender
plus (ii) the aggregate principal amount of the unfunded Commitment of such
Lender as originally in effect. Each Lender is hereby authorized by the Borrower
to endorse on the schedule (or a continuation thereof) attached to
the Notes of such Lender, to the extent applicable, the date, amount and Type of
and the Interest Period for each applicable Loan made by such Lender to the
Borrower and the amount of each payment or prepayment of principal of such Loan
received by such Lender, provided that any failure by such Lender to make any
such endorsement shall not affect the obligations of the Borrower under any such
Note or this Agreement in respect of any such Loan.
(b) Registered Notes. Any Lender that is not a U.S. Person and that
----------------
could become completely exempt from withholding of U.S. Taxes in respect of
payment of any Obligations due to such Lender hereunder relating to any of its
Loans if such Loans were in registered form for U.S. Federal income tax purposes
may request the Borrower (through the Administrative Agent), and the Borrower
agrees thereupon, to exchange such Lender's Note evidencing its Loans for a
promissory note registered as provided in Section 13.8(h) hereof (a
--------------
"Registered Note"). Registered Notes may not be exchanged for Notes that are
---------------
not in registered form.
Section 2.3 Repayment of Loans. The Borrower shall pay to the
------------------
Administrative Agent for the account of each Lender the principal of the Loans
outstanding as of the Commitment Termination Date (and the principal of such
Loans outstanding as of such date shall be due and payable) in 14 quarterly
installments, commencing on the Amortization Commencement Date, and continuing
on each Quarterly Date thereafter through and including the Maturity Date, each
of which installments shall be in an amount equal to the percentage of the
aggregate principal amount of such Loans outstanding as of such applicable date
specified opposite such installment in the following table:
Principal Installment Percentage of the Aggregate Principal Amount
of each of the Loans Due and Payable
1 5.00%
2 5.00%
3 5.00%
4 5.00%
5 6.50%
6 6.50%
7 6.50%
8 6.50%
9 9.00%
10 9.00%
11 9.00%
12 9.00%
13 9.00%
14 9.00%
In addition, the Borrower shall pay to the Administrative Agent for the account
of each Lender all outstanding principal of the Loans (and all outstanding
principal of the Loans shall be due and payable) on the Maturity Date.
Section 2.4 Interest.
--------
(a) Interest Rate. The Borrower shall pay to the Administrative Agent
-------------
for the account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender (or deemed made by such Lender with respect to a Loan
assigned to such Lender after the making of such Loan) to the Borrower for the
period commencing on the date of such Loan to, but excluding, the date such Loan
shall be paid in full, at the following rates per annum:
(i) during the periods such Loan is a Base Rate Loan, the lesser
of (A) the Base Rate plus the Applicable Margin or (B) the Maximum Rate;
and
(ii) during the periods such Loan is a Eurodollar Loan, the
lesser of (A) the Adjusted Eurodollar Rate plus the Applicable Margin or
(B) the Maximum Rate.
(b) Payment Dates. Accrued interest on Loans shall be due and payable
--------------
as follows:
(i) in the case of Base Rate Loans, on each Monthly Date;
(ii) in the case of each Eurodollar Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the first
day of such Interest Period;
(iii) upon the payment or prepayment (whether mandatory or
optional) of any such Loan or the Conversion of any such Loan to a
Variable Rate Loan of the other Type (but only on the principal amount so
paid, prepaid or Converted); and
(iv) with respect to all such Loans, on the Maturity Date.
(c) Default Interest. Notwithstanding the foregoing, the Borrower shall
----------------
pay to the Administrative Agent for the account of each Lender interest at the
applicable Default Rate (i) at all times during which any Default has occurred
and is continuing, on any principal of any Loan outstanding, and (ii) to the
fullest extent permitted by law, any other amount payable by the Borrower under
this Agreement or any other Loan Document to or for the account of such Lender
which is not paid in full when due (whether at stated maturity, by acceleration
or otherwise) for the period from and including the due date thereof to but
excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand by the Administrative Agent.
Section 2.5 Borrowing Procedure. The Borrower shall give the
-------------------
Administrative Agent notice of each borrowing hereunder in accordance with
Section 2.9. Not later than 1:00 p.m. (New York, New York time) on the date
specified for each borrowing hereunder, each Lender will make available the
amount of the Loan to be made by it on such date to the Administrative Agent, at
the Principal Office, in immediately available funds, for the account of the
Borrower. The amount of each borrowing hereunder so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available, for and on behalf of the Borrower, in
immediately available funds by no later than 1:00 p.m. (New York, New York
time); provided, however, that the Administrative Agent may, in its discretion,
cause such amount to be made available directly to or for the benefit of the
Person who is to receive the proceeds of such Loan in accordance with Section
2.10. Notwithstanding anything to the contrary contained in this Agreement, if
and to the extent that Nortel Networks is a Lender under this Agreement, the
Borrower further hereby irrevocably agrees that each Loan to be advanced by
Nortel Networks to the Borrower in accordance with this Agreement (and only in
accordance with this Agreement and after the Administrative Agent's receipt of a
Notice of Borrowing executed by the Borrower) may (in the discretion of Nortel
Networks and if and to the extent that the proceeds of such Loan are to be paid
to Nortel Networks) be effectively disbursed on the date set forth in the Notice
of Borrowing for such disbursement to the Borrower by virtue of a credit in the
amount of such Loan given to the Borrower under the Master Purchase Agreement.
Section 2.6 Optional Prepayments, Conversions and Continuations of
--------------------------------------------------------
Loans. Subject to Section 2.7, the Borrower shall have the right from time to
------
time to prepay the Loans in whole or in part, to Convert all or part of a Loan
of one Type into a Loan of another Type or to Continue Eurodollar Loans;
provided that: (a) the Borrower shall give the Administrative Agent notice of
each such prepayment, Conversion or Continuation as provided in Section 2.9,
------------
(b) Eurodollar Loans may only be Converted on the last day of the Interest
Period and any prepayment of Eurodollar Loans on any day other than the last day
of the Interest Period shall be subject to payment of the additional
compensation specified in Section 4.5, (c) except for Conversions of
-----------
Eurodollar Loans into Base Rate Loans, no Conversions or Continuations shall be
made while a Default has occurred and is continuing, and (d) optional
prepayments of the Loans shall be applied pro rata to the principal of the Loans
in the inverse order of the maturities of the then remaining installments of
such Loans. No amounts prepaid pursuant to this Section 2.6
-----------
may be reborrowed.
Section 2.7 Mandatory Prepayments.
---------------------
(a) Asset Dispositions, etc. The Borrower shall, within two Business
------------------------
Days after it receives any Net Proceeds of any Asset Disposition of Collateral,
proceeds of any Insurance Recovery with respect to Collateral or proceeds of
condemnation awards with respect to Collateral, pay to the Administrative Agent,
as a prepayment of the Loans, the amount received by the Borrower.
(b) Excess Cash Flow. The Borrower shall, commencing on the first March
----------------
31 following the Commitment Termination Date, and on each anniversary
thereafter, pay (or cause to be paid) to the Administrative Agent, as a
prepayment of the Loans and other Obligations then outstanding, an aggregate
amount equal to fifty percent (50%) of Excess Cash Flow for the fiscal year then
most recently ended.
(c) Pro-Rata Prepayment of Debt. In the event the Borrower shall prepay
---------------------------
any Debt that is permitted to be prepaid under Section 9.17 hereof, the
------------
Borrower shall, as a condition to such prepayment, prepay a "Pro Rata Amount"
---------------
of the Obligations. For purposes hereof, "Pro Rata Amount" shall mean an
---------------
amount of the Obligations determined by multiplying (i) the total outstanding
amount of the Obligations prior to such prepayment by (ii) the quotient of (y)
the amount of other Debt to be prepaid divided by (z) the total amount of such
other Debt outstanding immediately prior to such prepayment. Notwithstanding the
above, no prepayment under this Section 2.7(c) shall be required in the
--------------
event the prepayment of other Debt is a result of the Borrower's receipt of an
Insurance Recovery with respect to Property other than the Collateral or the
Borrower's receipt of Net Proceeds of any Asset Disposition of Property other
than the Collateral (which Asset Disposition is undertaken in compliance with
Section 9.8 hereof).
-----------
(d) Application of Mandatory Prepayments. All prepayments pursuant to
-------------------------------------
Section 2.7(a), Section 2.7(b) or Section 2.7(c) shall be applied pro rata to
-------------- ------------- --------------
the principal of the Loans in the inverse order of the maturities of the then
remaining installments of the Loans and then to the remaining outstanding
Obligations in such order as the Administrative Agent may determine.
(e) No Reborrowing. No amounts of the Loans prepaid pursuant to this
--------------
Section 2.7 may be reborrowed.
Section 2.8 Minimum Amounts. Except for Conversions and prepayments
---------------
pursuant to Section 2.7 and Article 4, each borrowing, Conversion and each
------------ ---------
optional prepayment of principal of the Loans shall be in an amount at least
equal to $1,000,000 or an integral multiple of $100,000 in excess thereof
(borrowings, prepayments or Conversions of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder shall be deemed separate borrowings, prepayments and Conversions
for purposes of the foregoing, one for each Type or Interest Period).
Section 2.9 Certain Notices. Notices by the Borrower to the
---------------
Administrative Agent of terminations or reductions of Commitments, of
borrowings, Conversions, Continuations and prepayments of Loans and of the
duration of Interest Periods shall be irrevocable and shall be effective only if
received by the Administrative Agent not later than 11:00 a.m. (New York, New
York, time) on the Business Day prior to the date of the relevant termination,
reduction, borrowing, Conversion, Continuation or prepayment or the first day of
such Interest Period specified below:
Notice Number of
Business Days Prior
Terminations or Reductions of Commitments 1
Borrowings of Loans which are Base Rate Loans 2
Borrowings of Loans which are Eurodollar Loans 3
Prepayments of Loans 3
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 2.8 hereof)
-----------
and Type of the Loans to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day). Each such notice of termination, reduction, borrowing,
Conversion, Continuation or prepayment shall be in the form of Exhibit C
----------
hereto, appropriately completed as applicable. Each notice of borrowing (a
"Notice of Borrowing") (a) shall certify that all proceeds of the requested
-------------------
Loans are, concurrently with the making of such Loans, being used by the
Borrower for the purpose specified in Section 2.10 and (b) shall be
------------
accompanied by such other evidence as to use of the proceeds of such borrowing,
as the Administrative Agent may reasonably request from time to time. Each
notice which includes reference to the duration of an Interest Period shall
specify the Loans to which such Interest Period is to relate. The Administrative
Agent shall promptly notify the Lenders of the contents of each such notice. In
the event the Borrower fails to select the Type of Loan, or the duration of any
Interest Period for any Eurodollar Loan, within the time period and otherwise as
provided in this Section 2.9, such Loan (if outstanding as Eurodollar Loan) will
-----------
be automatically Converted into a Base Rate Loan on the last day of preceding
Interest Period for such Loan or (if outstanding as a Base Rate Loan) will
remain as, or (if not then outstanding) will be made as, a Base Rate Loan. The
Borrower may not borrow any Eurodollar Loans, Convert any Loans into Eurodollar
Loans or Continue any Loans as Eurodollar Loans if the interest rate for such
Eurodollar Loans would exceed the Maximum Rate.
Section 2.10 Use of Proceeds.
---------------
(a) Loans. The Borrower agrees that all proceeds of the Loans shall be
-----
used to finance the purchase price for Nortel Networks Goods and Services
provided by Nortel Networks under the Master Purchase Agreement.
(b) Margin Stock. None of the proceeds of any Loan have been or will be
------------
used to acquire any security in any transaction that is subject to Section 13 or
14 of the Exchange Act or to purchase or carry any margin stock (within the
meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System).
Section 2.11 Fees.
----
(a) Subject to Section 13.12, the Borrower shall, commencing effective
-------------
January 1, 2000 and for all periods thereafter, pay to the Administrative Agent
for the account of each applicable Lender a commitment fee on the daily average
unused or unfunded amount of each of such Lender's Commitments (as the same may
be reduced or terminated pursuant to Section 2.13), for the period
------------
from and including the date on which such Lender (or its predecessor in interest
with respect to Commitments assigned to such Lender as to which a
commitment fee has not previously been paid during the applicable period) became
a party hereto but excluding the Commitment Termination Date (i) in the case of
any Lender other than Nortel Networks (including any Assignee of Nortel
Networks), at one and one-quarter percent (1.25%) per annum and (ii) in the case
of Nortel Networks as a Lender, at one-half of one percent (0.50%), in each case
based on a 360 day year and the actual number of days elapsed, which accrued
commitment fees shall be payable in arrears on each Quarterly Date and on the
Commitment Termination Date.
(b) Subject to Section 13.12, the Borrower agrees to pay to the
-------------
Administrative Agent and Nortel Networks such additional fees as are specified
in the Administrative Agent's Letter, which fees shall be payable in such
amounts and on such dates as are specified therein.
Section 2.12 Computations. Interest and fees payable by the Borrower
------------
hereunder and under the other Loan Documents on all Loans shall be computed on
the basis of a year of 360 days and the actual number of days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable unless, in the case of interest, such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be.
Section 2.13 Termination or Reduction of Commitments.
---------------------------------------
(a) Notwithstanding anything to the contrary contained in this Agreement,
each of the Commitments shall automatically terminate upon the occurrence of any
Change in Control.
(b) The Borrower shall have the right to terminate or reduce in part the
unused portion of the Commitments at any time and from time to time prior to the
Commitment Termination Date; provided, however, that no such termination
-----------------
or reduction shall be effective unless the Borrower shall have given notice of
each such termination or reduction as provided in Section 2.9 and each partial
-----------
reduction of the Commitments shall be in an aggregate amount at least equal to
$1,000,000 or an integral multiple of $100,000 in excess thereof.
(c) The Commitments may not be reinstated after they have been terminated
or increased after they have been reduced.
ARTICLE 3
Payments
--------
Section 3.1 Method of Payment. All payments of principal, interest,
-----------------
fees and other amounts to be made by the Borrower under this Agreement and the
other Loan Documents shall be made to the Administrative Agent at the Principal
Office for the account of each Lender's Applicable Lending Office in Dollars and
in immediately available funds, without setoff, deduction or counterclaim, not
later than 1:00 p.m. (New York, New York time) on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The Borrower
shall, at the time of making each such payment, specify to the Administrative
Agent the sums payable by the Borrower under
this Agreement and the other Loan Documents to which such payment is to be
applied (and in the event that the Borrower fails to so specify, or if an Event
of Default has occurred and is continuing, the Administrative Agent may apply
such payment to the Obligations in such order and manner as the Administrative
Agent may elect, subject to Section 3.2). Upon the occurrence
-----------
and during the continuation of an Event of Default, all proceeds of any
Collateral and all other funds of the Borrower in the possession of the
Administrative Agent or any Lender, may be applied by the Administrative Agent
to the Obligations in such order and manner as the Administrative Agent may
elect, subject to Section 3.2. Each payment received by the Administrative
-----------
Agent under this Agreement or any other Loan Document for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds,
for the account of such Lender's Applicable Lending Office. Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest and commitment fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
------------------
provided in this Agreement: (a) each Loan shall be made by the Lenders under
Section 2.1, each payment of commitment fees under Section 2.11(a) shall be
----------- ---------------
made for the account of the Lenders, and each termination or reduction of the
Commitments under Section 2.13 shall be applied to the Commitments of the
Lenders, pro rata according to the respective unused Commitments; (b) the
making, Conversion and Continuation of Loans of a particular Type (other than
Conversions provided for by Section 4.4) shall be made pro rata among the
-----------
Lenders holding Loans of such Type according to the amounts of their respective
Commitments; (c) each payment and prepayment by the Borrower of principal of or
interest on Loans of a particular Type shall be made to the Administrative Agent
for the account of the Lenders holding Loans of such Type pro rata in accordance
with the respective unpaid principal amounts of such Loans held by such Lenders;
and (d) Interest Periods for Loans of a particular Type shall be allocated among
the Lenders holding Loans of such Type pro rata according to the respective
principal amounts held by such Lenders.
Section 3.3 Sharing of Payments, Etc. If a Lender shall obtain
-------------------------
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders participations in the Obligations held by the other Lenders in
such amounts, and make such adjustments from time to time, as shall be equitable
to the end that all the Lenders shall share pro rata in accordance with the
unpaid principal and interest on the Obligations then due to each of them. To
such end, all of the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if all or any portion of
such excess payment is thereafter rescinded or must otherwise be restored. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any Lender so purchasing a participation in the Obligations by the
other Lenders may exercise all rights of setoff, banker's lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the
right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness, liability or obligation of the
Borrower.
Section 3.4 Non-Receipt of Funds by the Administrative Agent. Unless
------------------------------------------------
the Administrative Agent shall have been notified by a Lender or the Borrower
(the "Payor") prior to the date on which such Lender is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder or the
Borrower is to make a payment to the Administrative Agent for the account of one
or more of the Lenders, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Administrative Agent,
the Administrative Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to the Administrative Agent, the
recipient of such payment shall, on demand, pay to the Administrative Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such period.
Section 3.5 Taxes.
-----
(a) All payments by the Borrower of principal of and interest on the Loans
and of all fees and other amounts payable under the Loan Documents shall be made
free and clear of, and without withholding or deduction by reason of, any
present or future taxes, levies, duties, imposts, assessments or other charges
levied or imposed by any Governmental Authority (other than franchise taxes and
taxes on the overall net income of any Lender). If any such taxes, levies,
duties, imposts, assessments or other charges are so levied or imposed, the
Borrower will (i) make additional payments in such amounts so that every net
payment of principal of and interest on the Loans and of all other amounts
payable by it under the Loan Documents, after withholding or deduction for or on
account of any such present or future taxes, levies, duties, imposts,
assessments or other charges (including any tax imposed on or measured by net
income of a Lender attributable to payments made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest
-----------
attributable to such payments), will not be less than the amount provided for
herein or therein absent such withholding or deduction (provided that the
Borrower shall not have any obligation to pay such additional amounts to any
Lender to the extent that such taxes, levies, duties, imposts, assessments or
other charges are levied or imposed by reason of the failure of such Lender to
comply with the provisions of Section 3.6), (ii) make such withholding or
-----------
deduction and (iii) remit the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law. Without limiting the
generality of the foregoing, the Borrower will, upon written request of any
Lender delivered to the Administrative Agent and delivered by the Administrative
Agent to the Borrower, reimburse each such Lender for the amount of (A) such
taxes, levies, duties, imports, assessments or other charges so levied or
imposed by any Governmental Authority and paid by such Lender as a result of
payments made by the Borrower under or with respect to the Loans other than such
taxes, levies, duties, imports, assessments and other charges previously
withheld or deducted by the Borrower which have previously resulted in the
payment of the required additional amount
to such Lender, and (B) such taxes, levies, duties, assessments and other
charges so levied or imposed with respect to any Lender reimbursement under the
foregoing clause (A), so that the net amount received by such Lender (net
----------
of payments made under or with respect to the Loans) after such reimbursement
will not be less than the net amount such Lender would have received if such
taxes, levies, duties, assessments and other charges on such reimbursement had
not been levied or imposed. The Borrower shall furnish promptly to the
Administrative Agent for distribution to each affected Lender, as the case may
be, upon request of such Lender delivered to the Administrative Agent, official
receipts evidencing any such payment, withholding or reduction.
(b) The Borrower will indemnify the Administrative Agent and each Lender
(without duplication) against, and reimburse the Administrative Agent and each
Lender for, all present and future taxes, levies, duties, imposts, assessments
or other charges (including interest and penalties) levied or collected (whether
or not legally or correctly imposed, assessed, levied or collected), excluding,
however, any taxes imposed on the overall net income of the Administrative Agent
or such Lender or any lending office of the Administrative Agent or such Lender
by any jurisdiction in which the Administrative Agent or such Lender or any such
lending office is located, on or in respect of this Agreement, any of the Loan
Documents or the Obligations or any portion thereof (the "reimbursable taxes").
------------------
Any such indemnification shall be on an after-tax basis, taking into account any
such reimbursable taxes imposed on the amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or provision of
this Agreement, the obligations of the Borrower under this Section 3.5 shall
survive the payment of the Loans and the other Obligations and termination of
the Commitments.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
-------------------------
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Closing Date or the date upon
which it initially becomes a party to this Agreement and if it is legally able
to do so, deliver to the Administrative Agent for further delivery to the
Borrower, two duly completed copies of U.S. Internal Revenue Service Form 1001,
4224 or W-8, as appropriate, certifying in any case that such Lender is entitled
to receive payments from the Borrower under any Loan Document without deduction
or withholding of any U.S. federal income taxes. Each Lender which so delivers a
Form 1001, 4224 or W-8 further undertakes to deliver to the Administrative Agent
for further delivery to the Borrower, two additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Administrative Agent, in
each case certifying that such Lender is entitled to receive payments from the
Borrower under any Loan Document without deduction or withholding of any U.S.
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Administrative Agent, who
shall further advise the Borrower, that such Lender is not capable of receiving
such payments without any deduction or withholding of U.S. federal income tax.
Section 3.7 Reinstatement of Obligations. Notwithstanding anything to
---------------------------- the contrary contained in
this Agreement or any other Loan Document, if the payment of any amount of
principal of or interest with respect to the Loans or any other amount of the
Obligations, or any portion thereof, is rescinded, voided or must otherwise be
refunded by the Administrative Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise for any reason
whatsoever, then each of (a) the Obligations, (b) the Loan Documents (including,
without limitation, this Agreement, the Notes and the Security Documents), (c)
the indebtedness, liabilities and obligations of the Borrower and any other Loan
Parties and (d) all Liens for the benefit of the Administrative Agent and the
Lenders created under or evidenced by the Loan Documents, will be automatically
reinstated and become automatically effective and in full force and effect, all
to the extent that and as though such payment so rescinded, voided or otherwise
refunded had never been made.
Section 3.8 No Force Majeure, Disputes. The Borrower's obligation to
--------------------------
pay all amounts due under the Loans and the other Obligations shall not be
affected by (a) any set-off, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right which the Borrower may
have against the Vendor for any reason whatsoever arising under or pursuant to
the Master Purchase Agreement or otherwise relating to the purchase of goods or
services from the Vendor, (b) any defect in the condition, design, operation or
fitness for use of, or any damage to or loss or destruction of, any equipment or
material or service provided by the Vendor, (c) any insolvency, bankruptcy,
reorganization or similar proceedings by or against the Borrower or affecting
any of its Properties, (d) any action of any Governmental Authority or any
damage to or destruction of or any taking of the Borrower's Property or any part
thereof, (e) any change, waiver, extension, indulgence or failure to perform or
comply with, or other action or omission herein or in the other Loan Documents
(except for express written modifications to this Agreement or other Loan
Documents as and in the manner permitted under this Agreement or the other Loan
Documents), (f) any dissolution of the Borrower, (g) any inability or illegality
with respect to the use or ownership of the Borrower's Property, (h) any failure
to obtain, or expiration, suspension or other termination of, or interruption
to, any required licenses, permits, consents, authorizations, approvals or other
legal requirements, (i) the invalidity or unenforceability of any of the Loan
Documents or any other infirmity therein or any lack of power or authority of
the Administrative Agent or any Lender or the Borrower, or (j) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing and
whether or not the Borrower shall have notice or knowledge of any of the
foregoing, it being the intention of the Administrative Agent and the Lenders
and the Borrower that the Obligations of the Borrower shall be absolute and
unconditional and shall be separate and independent covenants and agreements and
shall continue unaffected unless the requirements to pay or perform the same
shall have been terminated pursuant to an express provision thereof or of any of
the other Loan Documents.
Section 3.9 Return of Notes upon Payment in Full. Upon the payment in full
of all Obligations arising under the Loan Documents, each Lender shall ▇▇▇▇ the
Note held by it as "Paid in Full" and shall return such Note to the Borrower.
ARTICLE 4
Yield Protection and Illegality
-------------------------------
Section 4.1 Additional Costs.
----------------
(a) The Borrower shall pay directly to each Lender from time to time,
promptly upon the request of such Lender delivered to the Administrative
Agent, and further delivered to the Borrower by the Administrative Agent, the
costs incurred by such Lender which such Lender determines are attributable to
its making or maintaining of any Eurodollar Loans or its obligation to make any
of such Loans, or any reduction in any amount receivable by such Lender
hereunder in respect of any such Loans or obligations (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
----------------
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Notes in respect of any of such Loans
(other than taxes imposed on the overall net income of such Lender or its
Applicable Lending Office for any of such Loans by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any extensions of
credit or other assets of, or any deposits with or other liabilities or
commitments of, such Lender (including any of such Loans or any deposits
referred to in the definition of "Eurodollar Rate" in Section 1.1 hereof,
-----------
but excluding the Reserve Requirement to the extent it is included in the
calculation of the Adjusted Eurodollar Rate); or
(iii) imposes any other condition affecting this Agreement or the
Notes or any extensions of credit or liabilities or commitments contemplated
hereunder or thereunder.
Each Lender will notify the Administrative Agent who shall notify the Borrower,
of any event occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 4.1(a) as promptly as
-------------
practicable after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the Borrower) will designate a different
Applicable Lending Office for the Eurodollar Loans of such Lender if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule or
regulation or be in any way disadvantageous to such Lender, provided that such
--------
Lender shall have no obligation to so designate an Applicable Lending Office
located in the U.S. Each Lender will furnish the Administrative Agent, for
further delivery to the Borrower, with a certificate setting forth the basis and
the amount of each request of such Lender for compensation under this
Section 4.1(a). If any Lender requests compensation from the Borrower under this
--------------
Section 4.1(a), the Borrower may, by notice to the Administrative Agent, who
-------------
shall promptly deliver a copy of such notice to such Lender, suspend the
obligation of such Lender to make or Continue making, or Convert Base Rate Loans
into, Eurodollar Loans until the Regulatory Change giving rise to such request
ceases to be in effect (in which case the provisions of Section 4.4 hereof shall
-----------
be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 4.1, in the event that, by reason of any Regulatory Change, any Lender
-----------
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities
of such Lender which includes deposits by reference to which the interest rate
on Eurodollar Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such
a category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Administrative Agent (who shall notify the Borrower),
the obligation of such Lender to make or Continue making, or Convert Base Rate
Loans into, Eurodollar Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 4.4 hereof shall be applicable).
-----------
(c) Determinations and allocations by any Lender for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs of maintaining
its obligation to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be conclusive
in the absence of manifest error, provided that such determinations and
allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
----------------------------
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate" in
Section 1.1 hereof are not being provided in the relative amounts or for the
-----------
relative maturities for purposes of determining the rate of interest for such
Loans as provided in this Agreement; or
(b) the Required Lenders determine (which determination shall be conclusive
absent manifest error) and notify the Administrative Agent that the relevant
rates of interest referred to in the definition of "Eurodollar Rate" or
"Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis of which the
-----------
rate of interest for such Loans for such Interest Period is to be determined do
not accurately reflect the cost to the Lenders of making or maintaining such
Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof and,
so long as such condition remains in effect, the Lenders shall be under no
obligation to make Eurodollar Loans or to Convert Base Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or Convert such Loans into Base Rate Loans in accordance with the terms of
this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of this
-----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
or (b) maintain Eurodollar Loans, then such Lender shall promptly notify the
Administrative Agent thereof (and the Administrative Agent shall promptly notify
the Borrower) and such Lender's obligation to make or maintain Eurodollar Loans
and to Convert Base Rate Loans into Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of Section 4.4 hereof
shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
---------------------------
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
is suspended pursuant to Section 4.1 or 4.3 hereof, such Lender's
----------- ---
Eurodollar Loans shall be automatically Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans (or,
in the case of a Conversion required by Section 4.1(b) or 4.3 hereof, on
-------------- ---
such earlier date as such Lender may specify to the Administrative Agent (and
the Administrative Agent shall promptly notify the Borrower) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 4.1 or 4.3 hereof which gave rise to such Conversion no
----------- ---
longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans which would otherwise be made or Continued by such Lender as
Eurodollar Loans shall be made as or Converted into Base Rate Loans and all
Loans of such Lender which would otherwise be Converted into Eurodollar Loans
shall be Converted instead into (or shall remain as) Base Rate Loans. If such
Lender gives notice to the Administrative Agent that the circumstances specified
in Section 4.1 or 4.3 hereof which gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 4.4 no longer exist (which such Lender
agrees to do promptly upon such circumstances ceasing to exist) at a time when
Eurodollar Loans are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by the Lenders holding
Eurodollar Loans and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective Commitments.
Section 4.5 Compensation. The Borrower shall pay to the
------------
Administrative Agent for the account of each Lender, promptly upon the request
of such Lender through the Administrative Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of such Lender) to compensate it for
any loss, cost or expense incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the outstanding Loans
pursuant to Section 11.2) on a date other than the last day of an
------------
Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 6 to
---------
be satisfied) to borrow, Convert or prepay a Eurodollar Loan on the date for
such borrowing, Conversion or prepayment specified in the relevant notice of
borrowing, prepayment or Conversion under this Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Lender
----------------
shall have determined that the adoption or implementation of any applicable law,
rule or regulation regarding capital adequacy (including, without limitation,
any law, rule or regulation implementing the Basle Accord), or any change
therein, or any change in the interpretation or administration thereof by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or compliance by such Lender (or its parent) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any central bank or other Governmental Authority
(including, without limitation, any guideline or other requirement implementing
the Basle Accord), has or would have the effect of reducing the rate of return
on such Lender's (or its parent's) capital as a consequence of its obligations
hereunder or the transactions contemplated hereby to a level below that which
such Lender (or its parent) could have achieved but for such adoption,
implementation, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time, after demand by such Lender
delivered to the Administrative Agent, who shall promptly deliver a copy to the
Borrower, the Borrower shall, within ten Business Days after receipt of a notice
of such demand, pay to such Lender such additional amount or amounts as will
compensate such Lender (or its parent) for such reduction. A certificate of such
Lender claiming compensation under this Section 4.6 and setting forth the
-----------
additional amount or amounts to be paid to it hereunder shall be conclusive
absent manifest error, provided that the determination thereof is made on a
--------
reasonable basis. In determining such amount or amounts, such Lender may use any
reasonable averaging and attribution methods.
Section 4.7 Additional Interest on Eurodollar Loans. Without
---------------------------------------
duplication of Section 2.4 or amounts directly included in the definition of the
term "Adjusted Eurodollar Rate", the Borrower shall pay, directly to each Lender
from time to time, additional interest on the unpaid principal amount of each
Eurodollar Loan held by such Lender, from the date of the making of such
Eurodollar Loan until such principal amount is paid in full, at an interest rate
per annum determined by such Lender in good faith equal to the positive
remainder (if any) of (a) the Adjusted Eurodollar Rate applicable to such
Eurodollar Loan minus (b) the Eurodollar Rate applicable to such Eurodollar
Loan. Each payment of additional interest pursuant to this Section 4.7 shall be
-----------
payable by the Borrower on each date upon which interest is payable on such
Eurodollar Loan pursuant to Section 2.4(b); provided, however, that the Borrower
--------------- -------- -------
shall not be obligated to make any such payment of additional interest until the
first Business Day after the date when the Borrower has been informed (i) that
such Lender is subject to a Reserve Requirement and (ii) of the amount of such
Reserve Requirement (after which time the Borrower shall be obligated to make
all such payments of additional interest, including, without limitation, such
payment of additional interest that otherwise would have been payable by the
Borrower on or prior to such time had the Borrower been earlier informed).
ARTICLE 5
Security
--------
Section 5.1 Collateral. To secure the full and complete payment and
----------
performance of the Obligations, the Borrower will grant to the Administrative
Agent for the benefit of the Administrative Agent and the Lenders a perfected,
first priority Lien on all of its right, title and interest in and to the
Collateral, whether now owned or hereafter acquired, pursuant to the Security
Documents, consisting of the following:
(a) all Nortel Networks Equipment purchased under the Master Purchase
Agreement and owned by the Borrower or any Subsidiary of the Borrower and any
and all additions, substitutions and replacements of any of the foregoing,
wherever located and whether the same constitute personal property or fixtures,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto;
(b) all Nortel Networks Software;
(c) all Service Agreement Revenues; and
(d) all cash and non-cash proceeds and products of any of the foregoing.
Section 5.2 Guaranties. The Borrower will cause Holdings and each of
----------
the Subsidiaries of the Borrower (whether owned as of the Closing Date or
thereafter organized or created) to Guarantee the payment and performance of the
Obligations pursuant to the Guaranties.
Section 5.3 New Subsidiaries. Contemporaneously with the creation or
----------------
acquisition of any Subsidiary of the Borrower after the Closing Date, the
Borrower shall:
(a) cause each such Subsidiary of the Borrower to Guarantee the payment and
performance of the Obligations by executing and delivering to the Administrative
Agent a Guaranty or a joinder therein acceptable to the Administrative Agent;
and
(b) cause each such Subsidiary of the Borrower to execute and deliver to
the Administrative Agent a Security Agreement and such other Security Documents,
in form and substance acceptable to the Administrative Agent, as the
Administrative Agent may request to grant the Administrative Agent, for the
benefit of itself and the Lenders, a perfected, first priority Lien on all
Collateral owned by such Subsidiary of the Borrower.
Section 5.4 Further Assurances. In addition to the foregoing, the
------------------
Borrower shall, and shall cause each of its Subsidiaries and other appropriate
Persons (as applicable) to, execute and/or deliver such further agreements,
documents and instruments (including, without limitation, financing
statements) as the Administrative Agent may reasonably request in order for it
to obtain and maintain the perfected, first priority Liens to be granted in
accordance with this Article 5.
---------
Section 5.5 Landlord Waivers. With respect to each lease of real
----------------
Property where Collateral is or will be located and each OverVoice System
Property where Collateral is or will be located, the Borrower will use its
reasonable best efforts to obtain, in form and substance reasonably
satisfactory to the Administrative Agent, waivers, subordinations or other
agreements from each lessor and/or owner of the OverVoice System Property
necessary or appropriate to ensure Administrative Agent's perfected, first
priority Lien on the Collateral and the Administrative Agent's access to such
Collateral; provided, however, that the Borrower shall not be required to
-----------------
obtain waivers, subordinations or other agreements from owners of OverVoice
System Properties with respect to OverVoice System Properties under contract
with the Borrower as of the Closing Date and provided, that the Borrower and
---------
the Administrative Agent agree that the inclusion of the contract provision
shown in Schedule 5.5 in the Borrower's Service Agreements shall satisfy the
requirements of this Section 5.5 for OverVoice System Properties.
-----------
Section 5.6 Setoff. If an Event of Default shall have occurred and be
------
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived by
the Borrower), to set off and apply any and all deposits (general or special,
time or demand, provisional or final excluding any trust accounts) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the Obligations of
the Borrower now or hereafter existing under this Agreement, such Lender's Note
or any other Loan Document, irrespective of whether or not the Administrative
Agent or such Lender shall have made any demand under this Agreement, such
Lender's Note or any such other Loan Document and although such Obligations may
be unmatured. Each Lender agrees promptly to notify the Administrative Agent
(and the Administrative Agent shall promptly notify the Borrower) after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights and remedies of
each Lender hereunder are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender may have.
ARTICLE 6
Conditions Precedent
--------------------
Section 6.1 Initial Extension of Credit. The obligation of each
----------------------------
Lender to make its initial Loan under this Agreement is subject to completion of
Lenders' due diligence review of the Borrower and Holdings and the receipt by
the Administrative Agent, on or before the Closing Date, of all of the following
in form and substance satisfactory to the Administrative Agent and, in the case
of actions to be taken, the taking of the following required actions and
evidence that such actions have been taken to the satisfaction of the
Administrative Agent:
(a) Resolutions. Resolutions of the board of directors or equivalent
-----------
governing body (as applicable) certified by the Secretary or an Assistant
Secretary or equivalent officer or representative of each Loan Party which
authorize the execution, delivery and performance by such Loan Party of the Loan
Documents to which it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified by
----------------------
the Secretary or an Assistant Secretary (or other analogous officer) of each
Loan Party certifying as to the name of each officer or other representative of
such Loan Party (i) who is authorized to sign the Loan Documents to which it is
or is to be a party (including any certificates contemplated therein), together
with specimen signatures of each such officer or other representative, and (ii)
who will, until replaced by other officers or representatives duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with the
Loan Documents and the transactions contemplated thereby;
(c) Articles of Incorporation. The articles of incorporation of each
-------------------------
Loan Party certified by the Secretary of State or other applicable Governmental
Authority of the state of incorporation of such corporation and dated as of a
Current Date;
(d) Bylaws. The bylaws of each Loan Party certified by its Secretary or
-------
an Assistant Secretary (or other analogous officer or representative);
(e) Governmental Certificates. Certificates of appropriate officials as
-------------------------
to the existence and good standing of each of the Loan Parties in its
jurisdiction of incorporation and in all jurisdictions in which such Loan Party
is qualified or is required to qualify to do business as a foreign entity, each
such certificate to be dated as of a Current Date;
(f) Notes. The Notes duly completed and executed by the Borrower (one
------
payable to the order of each Lender with respect to each of its Commitments);
(g) Security Agreements and Other Security Documents. Security
------------------------------------------------
Agreements and other Security Documents executed by the Borrower pertaining to
the Collateral sufficient to create a Lien;
(h) Insurance Certificates and Policies. Certificates evidencing all
-----------------------------------
insurance policies required by this Agreement and the other Loan Documents and,
if requested by the Administrative Agent, copies of all such insurance policies;
(i) Lien Searches. Lien searches in the name of each of the Loan
-------------
Parties (and in all names under which any of them has done business within the
last five years) in each jurisdiction where such Loan Party maintains an office
or has Property, showing no financing statements or other Lien instruments of
record affecting the Collateral except for Permitted Liens and Liens being
released prior to or concurrently with the making of the initial Loan, and
financing statement terminations executed by ING Bank pursuant to which ING Bank
releases its security interests in and to all of the Collateral;
(j) Master Purchase Agreement. The Administrative Agent shall have
-------------------------
received a photocopy of the Master Purchase Agreement as so executed and
delivered, certified by a Responsible Officer of the Borrower as being a true
and correct copy of such document as of the Closing Date;
(k) Payment of Fees and Expenses. The Borrower shall have paid all fees
----------------------------
due on or before the Closing Date as specified in this Agreement or in the
Administrative Agent's Letter;
(l) Compliance with Laws. As of the Closing Date, the Borrower and the
--------------------
other Loan Parties shall have complied in all material respects with all
Governmental Requirements necessary to consummate the transactions contemplated
by this Agreement and the other Loan Documents;
(m) No Prohibitions. No Governmental Requirement shall prohibit the
----------------
consummation of the transactions contemplated by this Agreement or any other
Loan Document, and no order, judgment or decree of any Governmental Authority or
arbitrator shall, and no litigation or other proceeding shall be pending or to
the Borrower's knowledge, threatened which would, enjoin, prohibit, restrain or
otherwise adversely affect in any material manner the consummation of the
transactions contemplated by this Agreement and the other Loan Documents or
otherwise have a Material Adverse Effect;
(n) Financial Statements. Copies of each of the financial statements
--------------------
referred to in Section 7.2;
(o) Opinions of Counsel. Favorable legal opinions of counsel for the
-------------------
Loan Parties, in form and substance and issued by law firms satisfactory to the
Administrative Agent, with respect to the Loan Parties and with respect to the
Loan Documents;
(p) Legal Matters and Loan Documents. All matters of a legal nature
--------------------------------
relating to the Borrower and the Loan Documents shall be reasonably satisfactory
to the Administrative Agent and its counsel, and the Administrative Agent shall
have received all such other agreements, documents and instruments, each in form
and substance and executed and delivered by all parties, as the Administrative
Agent may have reasonably requested to receive;
(q) Business Plan. A copy of the Business Plan in form and substance
-------------
satisfactory to the Administrative Agent;
(r) Material Contracts. A true and correct and fully executed copy of
------------------
each of the Material Contracts in existence as of the Closing Date, in form
and substance satisfactory to the Administrative Agent;
(s) Permits. Copies of all material Permits affecting each Loan Party
-------
or any Subsidiary of such Loan Party in connection with its businesses or any of
the Properties owned or leased by it and in connection with its businesses to be
conducted and Properties to be owned or leased as contemplated by the Business
Plan, and evidence reasonably satisfactory to the Administrative Agent that the
Borrower and each Loan Party is able to conduct its businesses as currently
conducted and as to be conducted as contemplated by the Business Plan with the
use of such licenses and Permits in full force and effect; and the
Administrative Agent shall be satisfied that (i) the Borrower and each Loan
Party has the exclusive, unrestricted right to use each of such licenses and
Permits pursuant to license agreements or other agreements, documents or
instruments in form and substance reasonably satisfactory to the Administrative
Agent and (ii) the Borrower and each Loan Party has complied with all initial
and on-going conditions of the issuance and use of all such licenses and Permits
and all other terms and provisions thereof;
(t) Waivers and Consents. To the extent not referred to in clause (g)
--------------------
preceding, copies of all material waivers and consents necessary for the
execution, delivery and performance by the Loan Parties of the Loan Documents to
which it is a party, including, without limitation, any waivers and consents in
connection with the Master Purchase Agreement as the Administrative Agent may
require, which waivers and consents shall be certified by a Responsible Officer
of the Borrower as true and correct copies of such consents as of the Closing
Date;
(u) Regulatory Approvals. Evidence satisfactory to the Administrative
--------------------
Agent that all filings, consents or approvals with or of Governmental
Authorities necessary to consummate the transactions contemplated by the Loan
Documents have been made and obtained, as applicable;
(v) No Material Adverse Change. As of the Closing Date, (i) no material
---------------------------
adverse change shall have occurred with respect to the financial condition,
results of operations, businesses, operations, capitalization, indebtedness,
liabilities, obligations, profitability or prospects or Properties or of the
general affairs or management of Holdings and its Subsidiaries, taken as a
whole, or of the Borrower, in each case since December 31, 1998, (ii) no
disruption or adverse change in the capital markets generally or in the market
for loan syndications in particular shall have occurred since December 31, 1998,
which disruption or adverse change is deemed material in the judgment of the
Administrative Agent, and (iii) the Administrative Agent shall be satisfied that
the financial performance of Holdings and its Subsidiaries and of the Borrower
to the Closing Date is not materially different from the financial projections
for such Person(s) through the Closing Date that were previously submitted to
the Administrative Agent;
(w) Registration Statement. The filing by Holdings of a registration
----------------------
statement on Form S-1 with the United States Securities and Exchange Commission
for an initial public offering of Holdings common stock, which registration
statement is not subject to a "stop order" and has not been withdrawn;
(x) Accountant's Letter. A letter from Holdings authorizing the
-------------------
independent public accountants of Holdings and its Subsidiaries to communicate
with the Administrative Agent and the Lenders (provided that the Borrower shall
have notice of any such proposed communication and the right to be present
and/or participate in such communication) and acknowledging reliance with the
Administrative Agent and the Lenders on past, present and future financial
statements;
(y) Solvency. A certificate from Holdings and the Borrower certifying
--------
that each of Holdings and the Borrower is Solvent, together with contribution
agreements between and among Holdings and the Borrower.
(z) Subordination Agreement. A Subordination Agreement executed by
-----------------------
Holdings in respect of the Intercompany Subordinated Debt that may from time to
time be owed by the Borrower to Holdings.
The Borrower shall deliver, or cause to be delivered, to the Administrative
Agent sufficient counterparts of each agreement, document or instrument to be
received by the Administrative Agent under this Section 6.1 to permit the
------------
Administrative Agent to distribute a copy of the same to each of the Lenders.
After the request of the Borrower, the Administrative Agent shall inform the
Borrower in writing as to the status of satisfaction of the conditions precedent
set forth in this Section 6.1.
------------
Section 6.2 All Extensions of Credit. The obligation of each Lender
-------------------------
to make any Loan (including the initial Loan) under this Agreement is subject to
the continued satisfaction of each of the conditions precedent set forth in
Section 6.1 and each of the following additional conditions precedent:
-----------
(a) No Default or Material Adverse Effect. No Default or Material
--------------------------------------
Adverse Effect shall have occurred and be continuing, or would result from
such Loan;
(b) Representations and Warranties. All of the representations and
-------------------------------
warranties of the Borrower contained in this Agreement and in the other Loan
Documents shall be true and correct in all material respects on and as of the
date of such Loan with the same force and effect as if such representations and
warranties had been made on and as of such date unless they relate solely to an
earlier date;
(c) Use of Proceeds. The Borrower shall have certified to the
---------------
Administrative Agent that all proceeds of the Loans then being made by the
Lenders are, concurrently with the making of such Loans, being used by the
Borrower for the purposes specified in Section 2.10, and the Borrower shall have
delivered to the Administrative Agent such further evidence thereof (if any) as
the Administrative Agent may reasonably request;
(d) Master Purchase Agreement. The Master Purchase Agreement shall not
-------------------------
have been terminated by the Borrower;
(e) Full Disclosure. Neither the Borrower nor any other Loan Party
---------------
shall have failed to disclose to the Administrative Agent or any Lender any
material fact with respect to their business or their respective financial
conditions (including any contingent liabilities), or shall have failed to
disclose any information the absence of which makes any information previously
disclosed to the Administrative Agent or any Lender materially misleading; and
(f) Additional Documentation. The Administrative Agent shall have
-------------------------
received such additional approvals, agreements, documents and instruments as the
Administrative Agent may reasonably request. Each notice of borrowing by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower that the conditions precedent set forth in this Section 6.2 have been
satisfied (both as of the date of such notice and, unless the Borrower otherwise
notifies the Administrative Agent prior to the date of such borrowing, as of the
date of such borrowing).
Section 6.3 Closing Certificates. The Borrower shall, concurrently
--------------------
with the Closing Date (with respect to the conditions precedent set forth in
Section 6.1) and concurrently with the date of the making of each other Loan,
-----------
execute and deliver to the Administrative Agent a certificate in form and
substance reasonably satisfactory to the Administrative Agent certifying as to
the satisfaction of each of the conditions precedent set forth in this Article
-------
6 which are required to be satisfied on or before such date (without regard to
-
whether such matters are, in fact, satisfactory to the Administrative Agent to
the extent that such satisfaction is required hereunder).
ARTICLE 7
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Administrative Agent and the
Lenders that the following statements are and, after giving effect to the
funding of the initial Loans on the Closing Date, will be true, correct and
complete:
Section 7.1 Existence. Each Loan Party (a) is a corporation duly
----------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has all requisite corporate power and
authority to own its Properties and carry on its business as now conducted, and
(c) is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a Material Adverse Effect. Each of the Loan Parties has the power and
authority and legal right to execute, deliver and perform its obligations under
the Loan Documents to which it is or may become a party.
Section 7.2 Financial Statements.
---------------------
(a) The Borrower has delivered to the Administrative Agent, for further
delivery to the Lenders, (i) the audited consolidated and consolidating
financial statements (including balance sheet and statements of income or
operations, shareholders' equity and cash flows) of Holdings and its
Subsidiaries as of and for the fiscal year ended December 31, 1998 and (ii) an
unaudited pro forma balance sheet of Holdings and its Subsidiaries dated as of
the Closing Date which gives effect to the initial Loans made on the Closing
Date and the other transactions to occur on such date. Such financial statements
are true and correct, have been prepared in accordance with GAAP and fairly and
accurately present, on a consolidated and consolidating (where applicable)
basis, the financial condition of Holdings and its Subsidiaries as of such dates
and the results of operations for the respective periods indicated therein.
There has not been, as of the Closing Date, any material adverse change in the
financial condition, results of operations, businesses, operations, Properties,
capitalization, assets, liabilities or prospects of Holdings and its
Subsidiaries, taken as a whole, or of the Borrower on an individual basis, since
December 31, 1998.
(b) The Business Plan (including, without limitation, the financial
projections contained therein) represents, as of the Closing Date, the good
faith estimate of the Borrower and its senior management concerning the probable
financial condition and performance of Holdings, the Borrower and their
Subsidiaries for the time period covered thereunder based upon the assumptions
believed to be reasonable at the time made.
Section 7.3 Corporate Action; No Breach. The execution, delivery and
----------------------------
performance by each of the Loan Parties of the Loan Documents to which it is or
may become a party and compliance with the terms and provisions hereof and
thereof have been duly authorized by all requisite entity action and do not and
will not (a) violate or conflict with, or result in a breach of, or require any
consent under (i) the articles of incorporation, articles of organization,
bylaws, regulations or other constitutional documents of such Loan Party, (ii)
any material Governmental Requirement or any material order, writ, injunction or
decree of any Governmental Authority or arbitrator, or (iii) any material
agreement, document or instrument to which any Loan Party is a party or by which
any Loan Party or any of its Property is bound or subject, or (b) constitute a
default under any such material agreement, document or instrument, or result in
the creation or imposition of any Lien (except a Lien in favor of the
Administrative Agent for and on behalf of the Lenders under the Security
Documents as provided in Article 5) upon any of the revenues or Property of any
Loan Party.
Section 7.4 Operation of Business; Licenses. Each Loan Party and its
--------------------------------
Subsidiaries (a) possesses all material Permits necessary or appropriate to
conduct its businesses substantially as now conducted and as to be conducted as
contemplated by the Business Plan, and (b) has complied with all initial and
on-going conditions to the issuance and use of all such Permits, except where
failure to comply could not reasonably be expected to have a Material Adverse
Effect. None of such Persons is in violation of any such material Permits in a
manner which reasonably could be expected to result in any termination or
cessation thereof. Such Permits are summarized by category or type, as relevant
to the operation of each Loan Party and its Subsidiaries, on Schedule 7.4. Such
Permits set forth on Schedule 7.4 have been duly issued by the appropriate
Governmental Authority (as applicable) and are in full force and effect, and all
provisions of such Permits have been complied with in all material respects. No
such Permit is subject to any pending or, to the knowledge of the Borrower,
threatened revocation or termination proceeding or action.
Section 7.5 Intellectual Property. Each material item of Intellectual
----------------------
Property owned or used by each Loan Party and its Subsidiaries in the operation
of its business (including each item of Intellectual Property for which an
application for registration or protection has been filed with a Governmental
Authority) is set forth on Schedule 7.5. Each Loan Party and its Subsidiaries
-------------
owns or possesses (or will be licensed or have the full right to use) all
Intellectual Property which is reasonably necessary or appropriate for the
operation of its businesses as presently conducted and as proposed to be
conducted, without any known conflict with the rights of others. The
consummation of the transactions contemplated by this Agreement and the other
Loan Documents will not materially alter or impair, individually or in the
aggregate, any of such rights of such Persons. No product or service of any Loan
Party or any of its Subsidiaries infringes upon any Intellectual Property of any
other Person, and no claim or litigation is pending or, to the knowledge of the
Borrower, threatened against any such Person contesting its
right to sell or otherwise use any product or material or service which could
reasonably be expected to have a Material Adverse Effect. There is no violation
by any Loan Party or any of its Subsidiaries of any right of such Person with
respect to any material Intellectual Property owned or used by such Person.
Section 7.6 Litigation and Judgments. Each material action, suit,
------------------------
investigation or proceeding before or by any Governmental Authority or
arbitrator pending or, to the knowledge of the Borrower, threatened against or
affecting any Loan Party, or that relates to any of the Loan Documents as of the
Closing Date, is disclosed on Schedule 7.6. None of such actions, suits,
------------
investigations or proceedings could, if adversely determined, reasonably be
expected to have a Material Adverse Effect. Except as may be disclosed on
Schedule 7.6, as of the Closing Date, there are no outstanding judgments
------------
against any Loan Party. No Loan Party has received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed to any
liability or disadvantage that could reasonably be expected to have a Material
Adverse Effect.
Section 7.7 Rights in Properties; Liens. Except as disclosed on
---------------------------
Schedule 7.7, none of the Loan Parties owns any right, title or interest in
------------
any real Property. Each Loan Party has good and marketable title to or, with
respect to leasehold interests, valid leasehold interests in all of its material
Properties and assets, real and personal, including the material Properties,
assets and leasehold interests reflected in the financial statements described
in Section 7.2(a), except where failure to have good and
--------------
marketable title or valid leasehold interests could not reasonably be expected
to have a Material Adverse Effect, and none of the Properties or leasehold
interests of any of the Loan Parties is subject to any Lien, except Permitted
Liens. No Loan Party has granted or voluntarily allowed or permitted to exist
any Lien to or in favor of any Person (other than the Administrative Agent for
and on behalf of the Lenders as security for the Obligations) which attaches or
relates to any of the Collateral and the Liens on the Collateral in favor of the
Administrative Agent are perfected, first priority Liens.
Section 7.8 Enforceability. The Loan Documents have been duly and
--------------
validly executed and delivered by each of the Loan Parties that is a party
thereto, and such Loan Documents constitute the legal, valid and binding
obligations of such Persons, enforceable against each such Person in accordance
with their respective terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of, and
----------
no filing or registration with or notice to, any Governmental Authority or third
party is or will be necessary for the execution, delivery or performance by any
Loan Party of any of the Loan Documents or any of the Material Contracts to
which it is or will be a party or for the validity or enforceability thereof,
except for such consents, approvals and filings as have been validly obtained or
made and are in full force and effect or as to which the failure to obtain is
not, individually or in the aggregate, material. The consummation of the
transactions contemplated by the Loan
Documents and the Material Contracts does not require the consent or approval of
any other Person, except such consents and approvals (a) as have been validly
obtained and are in full force and effect or (b) as to which the failure to
obtain is not, individually or in the aggregate, material. No Loan Party has
failed to obtain any material consent, approval or Permit of any Governmental
Authority necessary for the ownership or use of any of its Properties, conduct
of its business and performance of the Business Plan.
Section 7.10 Debt. As of the Closing Date, Holdings and the Borrower
----
do not have any Debt other than (a) the Obligations, and (b) the Debt disclosed
on Schedule 7.10 hereto.
Section 7.11 Taxes. Each of the Loan Parties has filed (a) all tax
------
returns (federal, state and local) and reports required to be filed including
all income, franchise, employment, Property and sales tax returns, and (b) all
other material tax returns and reports required to be filed, in each case except
where failure to file could not reasonably be expected to have a Material
Adverse Effect, and has paid all federal and other material taxes (shown on such
returns or reports to be due and payable), assessments, fees and other
governmental charges levied or imposed upon it or its Properties, income or
assets otherwise due and payable before they become delinquent, except those
which are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP and no notice of
Lien has been filed or recorded or, as to such Loan Parties only, except where
failure to pay could not reasonably be expected to have a Material Adverse
Effect. There is no proposed tax assessment against any Loan Party which could,
if the assessment were made, reasonably be expected to have a Material Adverse
Effect.
Section 7.12 Margin Securities. None of the Loan Parties is engaged
-----------------
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
Section 7.13 ERISA. None of the Loan Parties or any ERISA Affiliate
-----
maintains or contributes to, or has any obligation under, any Pension Plan
other than the Pension Plans identified on Schedule 7.13. Each Plan of the
-------------
Loan Parties is in compliance in all material respects with all applicable
provisions of ERISA and the Code. Neither a Reportable Event nor a Prohibited
Transaction has occurred within the last 60 months with respect to any Plan that
could reasonably be expected have a Material Adverse Effect. No notice of intent
to terminate a Pension Plan has been filed, nor has any Pension Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Pension Plan, nor has the PBGC instituted any such proceedings. None of the Loan
Parties, any Subsidiary of any Loan Party or any ERISA Affiliate has completely
or partially withdrawn from a Multiemployer Plan. Each Loan Party and its
Subsidiaries and each ERISA Affiliate have met their minimum funding
requirements under ERISA and the Code or with respect to all of their Pension
Plans subject to such requirements, and, as of the Closing Date except as
specified on Schedule 7.13, the present value of all vested
--------------
benefits under each funded Plan (exclusive of any Multiemployer Plan) does not
and will not exceed the fair market value of all such Plan assets allocable to
such benefits, as determined on the most recent valuation date of such Plan and
in accordance with ERISA. None of the Loan Parties, any Subsidiary of any Loan
Party or any ERISA Affiliate has incurred any liability to the PBGC under ERISA.
No litigation is pending or, to the Borrower's knowledge, threatened concerning
or involving any Plan that could reasonably be expected to have a Material
Adverse Effect. There are no unfunded or unreserved liabilities (on either a
going-concern basis or a wind-up basis) relating to any Plan that could,
individually or in the aggregate, have a Material Adverse Effect if the Borrower
were required to fund or reserve such liability in full. As of the Closing Date,
no funding waivers have been or will have been requested or granted under
Section 412 of the Code with respect to any Plan. No unfunded or unreserved
liability for benefits under any Plan or Plans (exclusive of any Multiemployer
Plans) exceeds $100,000, with respect to any such Plan, or $200,000 with respect
to all such Plans, in the aggregate as of the Closing Date, on either a
going-concern basis or a wind-up basis.
Section 7.14 Disclosure. No written statement, information, report,
-----------
representation or warranty made by any Loan Party in any Loan Document or
furnished to the Administrative Agent or any Lender by or on behalf of any Loan
Party in connection with the Loan Documents or any transaction contemplated
hereby or thereby contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements herein or therein, in
light of the circumstances in which made, not misleading. There is no fact known
to the Borrower which has had a Material Adverse Effect, and there is no fact
known to the Borrower which in the future could reasonably be expected to have a
Material Adverse Effect except as may have been disclosed in writing to the
Administrative Agent.
Section 7.15 Loan Parties. Schedule 7.15 attached hereto contains, as
------------ -------------
of the Closing Date, complete and accurate information regarding (a) the
identities of each Loan Party and (b) the jurisdiction of incorporation or other
organization of each Loan Party.
Section 7.16 Compliance with Laws. None of the Loan Parties or any
--------------------
Subsidiary of any Loan Party is in violation of any Governmental Requirement
(including, without limitation, the Communications Act, any rule or regulation
of the FCC or any rule or regulation of any federal or state public utility
commission or other Governmental Authority), except for instances of
non-compliance that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 7.17 Investment Company Act. No Loan Party is an "investment
----------------------
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 7.18 Public Utility Holding Company Act. No Loan Party is a
----------------------------------
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 7.19 Environmental Matters.
---------------------
(a) Except for instances of noncompliance with or exceptions to any of the
following representations and warranties that could not have, individually or in
the aggregate, a Material Adverse Effect:
(i) Each Loan Party and its Subsidiaries and all of their
respective Properties and operations are in compliance with all
Environmental Laws in all material respects. The Borrower is not aware of,
and no Loan Party or any Subsidiary of a Loan Party has received written
notice of, any past, present or future conditions, events, activities,
practices or incidents which may interfere with or prevent the compliance
or continued compliance by the Loan Party and its Subsidiaries with all
Environmental Laws;
(ii) Each Loan Party and its Subsidiaries have obtained all
Permits that are required under applicable Environmental Laws, and all such
Permits are in good standing and all such Persons are in compliance with
all of the terms and conditions thereof;
(iii) No Hazardous Materials exist on, about or within or have
been (to the knowledge of the Borrower) or are being used, generated,
stored, transported, disposed of on or Released from any of the Properties
of each Loan Party and its Subsidiaries except in compliance with
applicable Environmental Laws. The use which each Loan Party and its
Subsidiaries make and intend to make of their respective Properties will
not result in the use, generation, storage, transportation, accumulation,
disposal or Release of any Hazardous Material on, in or from any of their
currently owned Properties except in compliance with applicable
Environmental Laws;
(iv) There are no conditions or circumstances associated with the
currently owned or leased Properties or operations of each Loan Party and
its Subsidiaries that could reasonably be expected to give rise to any
Environmental Liabilities or claims resulting in any Environmental
Liabilities;
(v) None of the Loan Parties and none of their respective
currently or previously owned or leased Properties or operations are
subject to any outstanding or, to the knowledge of the Borrower, threatened
order from or agreement with any Governmental Authority or other Person or
subject to any judicial or administrative proceeding with respect to (A)
any failure to comply with Environmental Laws, (B) any Remedial Action, or
(C) any Environmental Liabilities;
(vi) None of the Loan Parties is subject to, or has received
written notice of any claim from any Person alleging that it is or will be
subject to, any Environmental Liabilities;
(vii) None of the Properties of any of the Loan Parties is a
treatment facility (except for the recycling of Hazardous Materials
generated on-site and the treatment of liquid wastes subject to the Clean
Water Act or other applicable Environmental Law for temporary storage of
Hazardous Materials generated on-site prior to their disposal off-site) or
disposal facility requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901 et seq., regulations thereunder or any
comparable provision of state law. The Loan Parties are in compliance with
all applicable financial responsibility requirements of all Environmental
Laws; and
(viii) None of the Loan Parties has failed to file any notice
required under applicable Environmental Law reporting a Release.
(b) No Lien arising under any Environmental Law that could have,
individually or in the aggregate, a Material Adverse Effect has attached to any
Property or revenues of any of the Loan Parties.
Section 7.20 Year 2000 Compliance. Each Loan Party has (a) initiated a
--------------------
review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers and vendors) that
could reasonably be expected to be relevant to whether the Loan Party and its
Subsidiaries are Year 2000 Compliant, (b) developed a plan and timeline intended
to ensure that the Loan Party and its Subsidiaries are Year 2000 Compliant on a
timely basis, and (c) to date, implemented that plan in accordance with that
timetable. Based upon the foregoing, each Loan Party reasonably believes that it
and its Subsidiaries are Year 2000 Compliant as of the Closing Date except to
the extent described in Schedule 8.13.
Section 7.21 Acts of God. Neither the business nor the Properties of
-----------
any of the Loan Parties are affected by any fire, explosion, accident, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that is having or could
reasonably be expected to have a Material Adverse Effect.
Section 7.22 Material Contracts. Attached hereto as Schedule 7.22 is a
------------------
complete list, as of the Closing Date, of all Material Contracts of each Loan
Party, other than the Loan Documents. All of the Material Contracts are in full
force and effect and no Loan Party is in default under any Material Contract
and, to the knowledge of the Borrower after due inquiry, no other Person that is
a party thereto is in default under any of the Material Contracts. None of the
Material Contracts prohibits the transactions contemplated under the Loan
Documents. Except as may be provided on Schedule 7.22, each of the Material
-------------
Contracts is currently in the name of a Loan Party. The Borrower has delivered
to the Administrative Agent a complete and current copy of each Material
Contract (other than purchase orders entered into in the ordinary course of
business) existing on the Closing Date and, with respect to each Material
Contract (other than purchase orders entered into in the ordinary course of
business) entered into after the Closing Date, will deliver to the
Administrative Agent a complete and current copy of such Material Contract in a
reasonably prompt fashion after the creation thereof.
Section 7.23 Bank Accounts. As of the Closing Date, Schedule 7.23 sets
------------- -------------
forth the account numbers and location of all bank accounts (including lock box
and special deposit accounts) of the Loan Parties.
Section 7.24 Outstanding Securities. As of the Closing Date, all
----------------------
outstanding securities (as defined in the Securities Act of 1933, as amended, or
any successor thereto, and the rules and regulations of the Securities and
Exchange Commission thereunder) of the Loan Parties have been offered, issued,
sold and delivered in compliance with all applicable Governmental Requirements.
Section 7.25 Solvency. Each of the Loan Parties, as a separate entity,
---------
is Solvent, both before and after giving effect to the Loans.
Section 7.26 Employee Matters. Except as set forth on Schedule 7.26,
----------------
as of the Closing Date (a) no Loan Party nor any of their employees is subject
to any collective bargaining agreement, and (b) no petition for certification or
union election is pending with respect to the employees of any Loan Party, and
no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of any such Person. There are no
strikes, slowdowns, work stoppages or controversies pending or, to the best
knowledge of the Borrower after due inquiry, threatened against, any Loan Party
or its respective employees which could have, either individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.26, as
of the Closing Date, none of the Loan Parties is subject to an employment
contract.
Section 7.27 Insurance. Schedule 7.27 sets forth a complete and
---------- -------------
accurate description of all policies of insurance that relate to the Collateral.
To the extent such policies have not been replaced, no notice of cancellation
has been received for such policies and the Borrower and the owner and holder of
each such policy are in compliance with all of the terms and conditions of such
policies in all material respects.
Section 7.28 Common Enterprise. The Borrower and each Loan Party are
-----------------
members of an affiliated group with each other such Person and are collectively
engaged in a common enterprise with one another. Each of the Loan Parties
expects to derive substantial benefit (and may reasonably be expected to derive
substantial benefit), directly and indirectly, from the Loans contemplated by
this Agreement, both in its separate capacity and as a member of an affiliated
and integrated group.
Section 7.29 Loan Parties; Capitalization. Schedule 7.29 attached
----------------------------- -------------
hereto contains, as of the Closing Date, complete and accurate information
regarding (a) the identities of each Subsidiary of the Loan Parties, (b) the
number of issued and outstanding shares (or other units) of each class of
Capital Stock issued by the Borrower and each of its Subsidiaries and the
identities of, and number and percentage of each of such shares (or other units)
held by, the owner(s) (both of record and beneficially) of such Capital Stock,
and (c) the jurisdiction of incorporation or other organization of each of the
Loan Parties.
ARTICLE 8
Affirmative Covenants
---------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it will
perform and observe, or cause to be performed and observed, the following
covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish (or
----------------------
will cause to be furnished) to the Administrative Agent for further delivery
to each Lender:
(a) Annual Financial Statements. As soon as available, and in any event
---------------------------
within 90 days after the end of each fiscal year of the Borrower, beginning with
the fiscal year ending December 31, 1998, either (i) a copy of the form
10-K (including all financial statements contained therein) filed by Holdings as
of the end of and for such fiscal year then ended, together with consolidating
schedules for each of Holdings and its Subsidiaries (including, without
limitation, the Borrower) with respect to the financial statements contained
therein, or (ii) a copy of the annual audit report of Holdings and its
Subsidiaries as at the end of such year and the related consolidated statements
of income or operations, shareholders' equity and cash flows for such fiscal
year, together with consolidating schedules for Holdings and its Subsidiaries
(including, without limitation, the Borrower) with respect to each of such
financial statements, in each case (other than with respect to the consolidating
schedules) setting forth in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent
certified public accountants of recognized standing reasonably acceptable to the
Administrative Agent, which opinion shall state that such consolidated financial
statements present fairly the financial position and results of operations for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years and which opinion shall not be qualified or limited because of a
restricted or limited examination by such accountant of any material portion of
such Person's records;
(b) Quarterly Financial Statements. As soon as available, and in any
------------------------------
event within 45 days after the end of each of the quarters of each fiscal year
of the Borrower, beginning with the fiscal quarter ending March 31, 1999, either
(i) a copy of the form 10-Q (including all financial statements contained
therein) filed by Holdings as of the end of and for such fiscal quarter then
ended, together with consolidating schedules for each of Holdings and its
Subsidiaries (including, without limitation, the Borrower) with respect to each
of the financial statements contained therein, or (ii) a copy of the unaudited
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such quarter and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, together with unaudited
consolidating schedules for Holdings and its Subsidiaries (including, without
limitation, the Borrower) with respect to each of such financial statements, in
each case (other than with respect to the consolidating schedules) setting forth
in comparative form the quarterly operating budgets figures for the
corresponding period of the preceding fiscal year, and certified by an
appropriate Responsible Officer of the Borrower as fairly presenting, in
accordance with GAAP, the financial position and the results of operations of
the Borrower and its Subsidiaries (except for year-end adjustments and financial
statement footnotes required by GAAP);
(c) Compliance Certificate. Concurrently with the delivery of each of
-----------------------
the financial statements referred to in Sections 8.1(a) and 8.1(b), a
-------------- -------
Compliance Certificate of a Responsible Officer of the Borrower substantially in
the form of Exhibit D hereto, appropriately completed, stating that, to the
---------
best of such officer's knowledge, no Default has occurred and is continuing or,
if a Default has occurred and is continuing, stating the nature thereof and the
action that has been taken and is proposed to be taken with respect thereto;
(d) Notice of Actions, Suits or Proceedings. Promptly after the
----------------------------------------
commencement thereof, notice of all actions, suits and proceedings pending
before any Governmental Authority or arbitrator affecting any Loan Party or any
license or Permit, which, if determined adversely to the Borrower or any
Subsidiary of the Borrower, could reasonably be expected to have a Material
Adverse Effect;
(e) Notice of Default, etc. As soon as possible and in any event
----------------------
immediately upon the Borrower's obtaining knowledge of the occurrence of any
Default, a written notice setting forth the details of such Default and the
action that the Borrower has taken and, if and to the extent known, proposes to
take with respect thereto;
(f) ERISA Plan Reports. Promptly after the filing or receipt thereof,
------------------
copies of all reports, including annual reports, and notices which the Borrower
or any of its ERISA Affiliates files with or receives from the PBGC or the U.S.
Department of Labor under ERISA with respect to a Pension Plan or for which the
Borrower has any potential liability; and as soon as possible and in any event
within five days after the Borrower knows or has reason to know that any Pension
Plan is insolvent, or that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or Multiemployer Plan, or that the PBGC, or
the Borrower or any ERISA Affiliate has instituted or will institute proceedings
under ERISA to terminate or withdraw from or reorganize any Pension Plan, a
certificate of a Responsible Officer of the Borrower setting forth the details
as to such insolvency, withdrawal, Reportable Event, Prohibited Transaction or
termination and the action that the Borrower has taken and proposes to take with
respect thereto;
(g) Proxy Statements, Etc. As soon as available, one copy of each (if
---------------------
any) financial statement, report, notice or proxy statement sent by Holdings to
its stockholders or other security holders generally and one copy of each (if
any) regular, periodic or special report (including, without limitation, reports
on form 8-K), registration statement or prospectus filed by Holdings with any
securities exchange or the Securities and Exchange Commission or any successor
agency;
(h) Insurance. Within 60 days prior to the end of each fiscal year of
----------
the Borrower, a report in form and substance reasonably satisfactory to the
Administrative Agent summarizing all material insurance coverage maintained by
the Loan Parties as of the date of such report and all material insurance
coverage planned to be maintained by such Persons in the subsequent fiscal year;
(i) Plan Information. From time to time, as reasonably requested by the
----------------
Administrative Agent, such books, records and other documents relating to any
Pension Plan as the Administrative Agent shall specify; prior to any
termination, partial termination or merger of a Pension Plan covering employees
of the Borrower or any ERISA Affiliate, or a transfer of assets of a Pension
Plan covering employees of the Borrower or any ERISA Affiliate, written
notification thereof; promptly upon the Borrower's receipt thereof, a copy of
any determination letter or advisory opinion regarding any Pension Plan received
from any Governmental Authority and any amendment or modification thereto as may
be necessary as a condition to obtaining a favorable determination letter or
advisory opinion; and promptly upon the occurrence thereof, written notification
of any action requested by any Governmental Authority to be taken as a condition
to any such determination letter or advisory opinion;
(j) Business Plan, etc. Not later than 15 days prior to the end of each
------------------
year, an update of the Business Plan in reasonable detail generally consistent
with the form and substance of the Business Plan provided to the Administrative
Agent on or before the Closing Date, which update shall reflect the
corresponding information for the prior year;
(k) Management Letters. Promptly upon each receipt thereof by the
-------------------
Borrower or any of its Subsidiaries, a copy of any management letter or other
written report submitted to such Loan Party by independent certified public
accountants with respect to the business, condition (financial or otherwise),
operations, prospects or Properties of any such Person;
(l) Reports to Other Creditors. Promptly after the furnishing thereof,
--------------------------
copy of any financial or other material statement or report furnished by the
Borrower or any Loan Party to any other party pursuant to the terms of any
indenture, loan, stock purchase or credit or similar agreement and not otherwise
required to be furnished to the Administrative Agent pursuant to any other
subsection of this Section 8.1;
(m) Notice of Material Adverse Effect. Within three Business Days after
---------------------------------
the Borrower becomes aware thereof, written notice of any matter that could
reasonably be expected to have a Material Adverse Effect;
(n) Environmental Assessments and Notices. Promptly after the receipt
-------------------------------------
thereof, a copy of each environmental assessment (including any analysis
relating thereto) prepared with respect to any Property of the Borrower or any
Loan Party and each notice sent by any Governmental Authority relating to any
failure or alleged failure to comply with any Environmental Law or any liability
with respect thereto;
(o) Notices Under Material Contracts. Promptly after the receipt by the
--------------------------------
Borrower or any Loan Party and promptly after the delivery by the Borrower or
any Loan Party, a copy of each written notice delivered under any Material
Contract which notice (i) relates to any alleged default under or noncompliance
with or proposed termination of such Material Contract or (ii) otherwise relates
to any matter under any Material Contract which could reasonably be expected to
give rise to Material Adverse Effect;
(p) Accounts Receivable and Payable. As soon as available and in any
-------------------------------
event within 45 days after the end of each fiscal quarter, an aged trial balance
of all then-existing Receivables and all then existing accounts payable of the
Borrower and its Subsidiaries;
(q) Accountant's Letter. A letter from Holdings shall have been
-------------------
delivered to the then current independent public accountants of Holdings and its
Subsidiaries authorizing such accountants to communicate with the Administrative
Agent and the Lenders and acknowledging reliance with the Administrative Agent
and the Lenders on past, present and future financial statements; and
(r) General Information. Promptly, such other business, financial,
corporate affairs and other similar information concerning the Loan Parties
and/or the Collateral as the Administrative Agent may from time to time
reasonably request.
Section 8.2 Maintenance of Existence; Conduct of Business. The
----------------------------------------------
Borrower will, and will cause each Loan Party to, preserve and maintain its
existence and all of its leases, privileges, licenses, Permits, franchises,
qualifications, Intellectual Property, intangible Property and contract and
other rights that are reasonably necessary in the ordinary conduct of its
business except to the extent that failure to so preserve and maintain such
could not reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Borrower will maintain the Inline
Contract in full force and effect and will comply with the terms and provisions
of such contract in all material respects. The Borrower will, and will cause
each Loan Party to, conduct its business in an orderly and efficient manner in
accordance with good business practices and the Business Plan.
Section 8.3 Maintenance of Properties and Permits. The Borrower will,
-------------------------------------
and will cause each Loan Party to, maintain, keep and preserve all of its
Properties and Permits reasonably necessary in the proper conduct of its
businesses in good repair, working order and condition (ordinary wear and tear
excepted) and make all necessary repairs, renewals and replacements and
improvements thereof.
Section 8.4 Taxes and Claims. The Borrower will, and will cause each
-----------------
Loan Party to, pay or discharge before becoming delinquent (a) all taxes,
levies, assessments and governmental charges imposed on it or its income or
profits or any of its Property and (b) all lawful claims for labor, material and
supplies, which, if unpaid, might become a Lien upon any of its Property;
provided, however, that neither the Borrower nor any Loan Party shall be
required to pay or discharge any tax, levy, assessment or governmental charge,
or claim for labor, material or supplies, whose amount, applicability or
validity is being contested in good faith by appropriate proceedings being
diligently pursued and for which adequate reserves have been established under
GAAP.
Section 8.5 Insurance.
----------
(a) The Borrower will, and will cause each Loan Party to, keep insured by
financially sound and reputable insurers all Property of a character usually
insured by responsible corporations engaged in the same or a similar business
similarly situated against loss or damage of the kinds and in the amounts
customarily insured against by such corporations or entities and carry such
other insurance as is usually carried by such corporations or entities, provided
that in any event the Borrower and the other Loan Parties will maintain:
(i) Property Insurance. Insurance against loss or damage
------------------
covering substantially all of the insurable tangible real and personal
Property (including, without limitation, the Nortel Networks Equipment and
related equipment) and improvements of such Person by reason of any Peril
(as defined below) in such amounts (subject to any deductibles as shall be
satisfactory to the Administrative Agent) as shall be reasonable and
customary and sufficient to avoid the insured named
therein from becoming a co-insurer of any loss under such policy, but in
any event in such amounts as are reasonably available as determined by the
Borrower's independent insurance broker reasonably acceptable to the
Administrative Agent.
(ii) Automobile Liability Insurance for Bodily Injury and
----------------------------------------------------
Property Damage. Insurance in respect of all vehicles (whether owned,
---------------
hired or rented by such Person) at any time located at, or used in
connection with, its Properties or operations against liabilities for
bodily injury and Property damage in such amounts as are then customary
for vehicles used in connection with similar Properties and businesses,
but in any event to the extent required by applicable law.
(iii) Comprehensive General Liability Insurance. Insurance
-----------------------------------------
against claims for bodily injury, death or Property damage occurring on,
in or about the Property (and adjoining streets, sidewalks and waterways)
of such Person, in such amounts as are then customary for Property similar
in use in the jurisdictions where such Properties are located.
(iv) Worker's Compensation Insurance. Worker's compensation
-------------------------------
insurance (including employers' liability insurance) to the extent
required by applicable law, which may be self-insurance to the extent
permitted by applicable law.
Without limiting the generality of the foregoing, the Borrower shall purchase
and maintain in effect all-risk, property and casualty insurance (including
casualty insurance covering earthquake and flood damage) reasonably acceptable
and in amounts reasonably acceptable to the Administrative Agent covering all
equipment purchased by the Borrower or any of its Subsidiaries from Nortel
Networks and liability insurance covering the operations of the Borrower and its
Subsidiaries. Such insurance shall be written by financially responsible
companies selected by the Borrower and having an A.M. Best Rating of "A-" or
better and being in a financial size category of "VI" or larger, or by other
companies reasonably acceptable to the Administrative Agent. Each policy
referred to in this Section 8.5 shall name the Administrative Agent (for the
benefit of itself and the other Lenders) as loss payee (with respect to casualty
insurance policies) and as an additional insured (with respect to liability
insurance policies) and shall provide that it will not be canceled, amended or
reduced except after not less than 30 days' prior written notice to the
Administrative Agent and shall also provide that the interests of the
Administrative Agent and the Lenders shall not be invalidated by any act or
negligence of any Loan Party. The Borrower will advise the Administrative Agent
promptly of any policy cancellation, reduction or amendment. For purposes
hereof, the term "Peril" shall mean, collectively, fire, lightning, flood,
windstorm, hail, explosion, riot and civil commotion, vandalism and malicious
mischief, damage from aircraft, vehicles and smoke and other perils covered by
the "all-risk" endorsement then in use in the jurisdictions where the Properties
of the Loan Parties are located.
(b) The Borrower will pay all Insurance Recoveries with respect to
Collateral to the Administrative Agent for application against the Obligations
if and to the extent required in accordance with Section 2.7(a).
---------------
Section 8.6 Inspection Rights. The Borrower will, and will cause each
------------------
of the Loan Parties to, permit representatives and agents of the Administrative
Agent and the Lenders, during normal business hours and upon reasonable notice
to the Borrower, to examine, copy and make extracts from its books and records,
to visit and inspect its Properties and to discuss its business, operations and
financial condition with its officers and independent certified public
accountants, which items shall be at the expense of the Administrative Agent and
the Lenders unless an Event of Default has occurred and is continuing. The
Borrower will authorize, and will cause each of the Loan Parties to authorize,
its accountants in writing (with a copy to the Administrative Agent) to comply
with this Section 8.6. The Administrative Agent or its representatives may at
any time and from time to time, conduct field exams for such purposes as the
Administrative Agent may reasonably request; provided, that such field exams
shall be conducted not more than once yearly and shall be at the expense of the
Administrative Agent and the Lenders, unless an Event of Default has occurred
and is continuing in which case such field exams may be conducted at any time
and from time to time as shall be reasonable and shall be at the expense of the
Borrower.
Section 8.7 Keeping Books and Records. The Borrower will, and will
-------------------------
cause each of the Loan Parties to, maintain appropriate books of record and
account in accordance with GAAP consistently applied in which true, full and
correct entries will be made of all their respective dealings and business
affairs. If any changes in accounting principles from those used in the
preparation of the financial statements referenced in Section 8.1 are hereafter
required or permitted by GAAP and are adopted by the Borrower with the
concurrence of its independent certified public accountants and such changes in
GAAP result in a change in the method of calculation or the interpretation of
any of the covenants, standards or terms contained in this Agreement, the
Borrower and the Required Lenders agree to amend any such affected terms and
provisions so as to reflect such changes in GAAP with the result that the
criteria for evaluating the financial condition or performance of the Loan
Parties shall be the same after such changes in GAAP as if such changes in GAAP
had not been made.
Section 8.8 Compliance with Laws. The Borrower will, and will cause
--------------------
each of the Loan Parties to, comply with all Governmental Requirements
applicable to the operation of its business, except for instances of
noncompliance that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 8.9 Compliance with Agreements. The Borrower will, and will
---------------------------
cause each of the Loan Parties to, comply with all agreements, documents and
instruments binding on it or affecting its Properties or business, including,
without limitation, all Material Contracts, except for instances of
noncompliance that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 8.10 Further Assurances. The Borrower will execute and deliver
-------------------
and will cause each of the Loan Parties to execute and deliver such further
agreements, documents and instruments (including, without limitation, financing
statements and amendments to financing statements specifying each item of the
Collateral and the serial number therefor) and take such further action as may
be reasonably requested by the Administrative Agent to carry out the provisions
and purposes of this Agreement and the other Loan Documents, to evidence the
Obligations and to create, preserve, maintain and perfect the
Liens of the Administrative Agent for the benefit of itself and the Lenders in
and to the Collateral and the required priority of such Liens.
Section 8.11 ERISA. The Borrower will, and will cause each of its
-----
ERISA Affiliates to, comply with all minimum funding requirements and all other
material requirements of ERISA so as not to give rise to any material liability
thereunder.
Section 8.12 Non-Consolidation. The Borrower will, and will cause each
-----------------
other Loan Party to: (a) maintain entity records and books of account separate
from those of any other entity which is an Affiliate of such Loan Party; (b) not
commingle its funds or assets with those of any other entity which is an
Affiliate of such Loan Party; and (c) provide that its board of directors or
other analogous governing body will hold all appropriate meetings to authorize
and approve such Person's entity actions, which meetings will be separate from
those of other Loan Parties.
Section 8.13 Year 2000 Compliance. Except for such instances as
--------------------
individually or in the aggregate would not have a Material Adverse Effect, all
of the material computer software, computer hardware (whether general or special
purpose), and other similar or related items of automated, computerized or
software systems that are used or relied upon by the Borrower or any Loan Party
in the conduct of its business will be Year 2000 Compliant and, without limiting
the generality of the foregoing, will not malfunction, will not cease to
function, will not generate incorrect data and will not produce incorrect
results when processing, providing or receiving (a) date-related data into and
between the twentieth and twenty-first centuries and (b) date-related data in
connection with any valid date in the twentieth and twenty-first centuries. The
Borrower will promptly notify the Administrative Agent in the event the Borrower
discovers or determines that any computer application (including those of its
suppliers and vendors) that is material to its or any Loan Party's business and
operations will not be Year 2000 Compliant on a timely basis.
Section 8.14 Delivery of Certain Amendments. The Borrower will, and
------------------------------
will cause the other Loan Parties to, promptly deliver to the Administrative
Agent any amendment, modification or supplement to (a) the articles of
incorporation, articles of organization, bylaws, regulations or other
constitutional documents of the Borrower or any other Loan Party or (b) any
Material Contract to which it is a party or any license or Permit which it
possesses; provided, however, that any such amendment, modification, or
supplement shall be subject to the provisions of Section 9.15 hereof.
Section 8.15 Interest Rate Protection. The Borrower shall, commencing
-------------------------
on or before the thirtieth (30th) day after the Closing Date, maintain in full
force and effect through the Maturity Date one or more Interest Rate Protection
Agreements reasonably satisfactory to the Administrative Agent with one or more
counterparties reasonably acceptable to the Administrative Agent rated in one of
the three of the highest rating categories of Standard & Poors Corporation or
▇▇▇▇▇'▇ Investors Services, Inc. and otherwise reasonably acceptable to the
Administrative Agent that enable the Borrower to fix or place a limit upon a
rate of interest with respect to not less than an aggregate notional amount (not
less than zero) equal to fifty percent (50%) of Total Debt minus the amount of
such Total Debt with a fixed interest rate. The maximum amount for which
interest may be fixed or limited under all such Interest Rate Protection
Agreements shall not exceed one hundred percent
(100%) of the Total Debt bearing interest at a variable rate of the Borrower and
its Subsidiaries.
Section 8.16 Ownership of Assets; Holdings to Remain a Holding Company.
---------------------------------------------------------
The Borrower shall, at all times during the term of the Loans and except as set
forth on Schedule 8.16, own all assets used or useful in the operation of
--------------
the telecommunications business of the Borrower, Holdings and their
Subsidiaries. Holdings shall, at all times during the term of the Loans and
except as set forth on Schedule 8.16, be a holding company and shall not own
-------------
assets (other than cash and Investments) used or useful in the operation of the
telecommunications business of the Borrower, Holdings and their Subsidiaries.
Section 8.17 Service Agreement Revenues. The Borrower will, on and
--------------------------
after August 1, 1999, ensure that all cash proceeds of Service Agreement
Revenues are (a) deposited directly, as received, into a lockbox or collection
account of the Borrower as the Administrative Agent may require from time to
time and (b) on a daily basis after such deposit, transferred into a lockbox or
concentration account of the Borrower as the Administrative Agent may require
from time to time. The Borrower will maintain in effect an agreement governing
each of its lockbox accounts, collection accounts and/or concentration accounts
in a form approved by the Agent with a depository bank satisfactory to the
Agent.
ARTICLE 9
Negative Covenants
------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it will
perform and observe, or cause to be performed and observed, the following
covenants:
Section 9.1 Debt. The Borrower will not, and will not permit any
-----
Subsidiary of the Borrower to, incur, create, assume or permit to exist any
Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Subordinated Debt, which Subordinated Debt is on terms and
conditions acceptable to the Required Lenders;
(c) unsecured Debt under Interest Rate Protection Agreements entered
into in compliance with Section 8.16, provided, however, that Debt thereunder
may be secured if such Debt constitutes a part of the Obligations;
(d) (i) existing and other Debt in the principal amounts and as
otherwise described on Schedule 7.10 hereto and renewals, extensions or
-------------
refinancings of such Debt which do not increase the outstanding principal amount
of such Debt, which do not shorten the maturity of any principal of such Debt
and the terms and provisions of which are not materially more
onerous than the terms and conditions of such Debt on the Closing Date, (ii)
purchase money Debt (including Capital Lease Obligations) secured by purchase
money Liens permitted under clause (g) of the definition of Permitted Liens
----------
contained in Section 1.1, and (iii) additional unsecured Debt in an amount not
-----------
to exceed $5,000,000 to the extent that no Default exists at the time the
Borrower incurs such Debt or would result from the Borrower's incurring such
Debt;
(e) Intercompany Subordinated Debt which does not in the aggregate
exceed $50,000,000;
(f) Debt consisting of any Guarantee resulting from endorsement for
collection of any instrument executed by the Borrower in the ordinary course;
and
(g) liabilities of the Borrower in respect of unfunded vested benefits
under any Plan if and to the extent that the existence of such liabilities will
not constitute, cause or result in a Default.
Section 9.2 Limitation on Liens. The Borrower will not, and will not
-------------------
permit any Subsidiary of the Borrower to, incur, create, assume or permit to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except Permitted Liens and will not enter into any negative
pledge or similar arrangement in favor of other creditors (other than such
negative pledge or similar arrangement under purchase money Debts and Capital
Lease Obligations with respect to the assets financed or secured thereby or as
consented to in writing by the Administrative Agent, which consent shall not be
unreasonably withheld).
Section 9.3 Mergers, Etc. The Borrower will not, and will not permit
-------------
its Subsidiaries to, (a) become a party to a merger or consolidation, (b)
wind-up, dissolve or liquidate itself, or (c) purchase or acquire all or a
material or substantial part of the business or Properties of any Person;
provided, however, that any Subsidiary of the Borrower may merge with and into
the Borrower or a Subsidiary of the Borrower if the Borrower or a Subsidiary of
the Borrower is the surviving entity, provided that no consideration is given by
the surviving entity in such merger other than the issuance of any Capital Stock
of the surviving entity. The surviving entity in any such merger shall ratify
the Security Documents and other obligations of the non-surviving entity under
the Loan Documents.
Section 9.4 Restricted Payments. The Borrower will not, and will not
--------------------
permit any Subsidiary of the Borrower to, make any Restricted Payments,
except:
(a) Subsidiaries of the Borrower may make Restricted Payments to the
Borrower;
(b) the Borrower and its Subsidiaries may make temporary loans or advances
to employees, officers and directors of the Loan Parties in the ordinary course
of business that do not exceed $2,000,000 in aggregate amount at any time
outstanding; or
(c) Salaries paid in the ordinary course of business and amounts paid to
Holdings necessary to pay interest on Subordinated Debt of Holdings to the
extent that the proceeds of such Subordinated Debt have been contributed to
the Borrower as equity;
provided, however, that no Restricted Payments may be made pursuant to the
------------------
preceding clause (a) if a Default exists at the time of such Restricted Payment
or would result therefrom.
Section 9.5 Investments. The Borrower will not, and will not permit
------------
any Subsidiary of the Borrower to, make or permit to remain outstanding any
advance, loan, extension of credit or capital contribution to or investment in
any Person, or purchase or own any stock, bonds, notes, debentures or other
securities of any Person, or be or become a joint venturer with or partner of
any Person (all such transactions being herein called "Investments"), except:
(a) Investments in obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the Borrower or
another Loan Party;
(b) existing Investments identified on Schedule 9.5 hereto;
------------
(c) Investments in securities issued or guaranteed by the U.S. or any
agency thereof with maturities of one year or less from the date of acquisition;
(d) Investments in certificates of deposit and Eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000;
(e) Investments in repurchase obligations with a term of not more than
seven days for securities of the types described in clause (c) preceding with
any Lender or with any domestic commercial bank having capital and surplus in
excess of $500,000,000;
(f) Investments in commercial paper of a domestic issuer rated A-1 or
better or P-1 or better by Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Services, Inc., respectively, maturing not more than 270 days from the date of
acquisition;
(g) (i) Investments (other than Intercompany Debt referred to in clause (h)
below) by the Borrower in its Subsidiaries existing on the Closing Date or
required to occur in accordance with this Agreement, and (ii) additional
Investments by the Borrower in its Subsidiaries made after the Closing Date
which, together with intercompany Debt referred to in clause (h) below, does not
in the aggregate exceed $2,000,000;
(h) Intercompany Debt which, together with Investments referred to in
clause (g)(ii) above, does not in the aggregate exceed $2,000,000, provided that
payment of such Debt shall be fully subordinated to the Obligations;
(i) Interest Rate Protection Agreements entered into in compliance with
Section 8.16; or
(j) Temporary loans or advances to employees, officers and directors of the
Loan Parties in the ordinary course of business that do not exceed $2,000,000 at
any time outstanding in aggregate amount;
provided, however, that no Investments may be made by the Borrower pursuant to
clauses (g) or (h) preceding if a Default exists at the time of such Investment
or would result therefrom.
Section 9.6 Limitation on Operating Leases of the Borrower. Without
----------------------------------------------
the prior written consent of the Administrative Agent, which consent shall not
be unreasonably withheld, the Borrower will not, and will not permit any
Subsidiary of the Borrower to, at any time enter into or be a party to operating
leases that in the aggregate obligate the Borrower and/or its Subsidiaries to
make annual payments in excess of $1,000,000.
Section 9.7 Transactions with Affiliates. Except for the continuance
-----------------------------
of the existing relationships set forth in Schedule 9.7, without the consent of
the Administrative Agent, the Borrower will not, and will not permit any
Subsidiary of the Borrower to, enter into any transaction, including, without
limitation, the purchase, sale or exchange of Property or the rendering of any
service, with any Affiliate of the Borrower except in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's business and upon fair
and reasonable terms no less favorable to the Borrower than would be obtained in
a comparable arms-length transaction with a Person not an Affiliate of the
Borrower; provided, however, that transactions between or among the Borrower and
------------------
its Affiliates may be on terms more favorable to the Borrower than would be
obtained in a comparable arms-length transaction with a Person not an Affiliate
of the Borrower.
Section 9.8 Disposition of Property. The Borrower will not, and will
------------------------
not permit any Subsidiary of the Borrower to, sell, lease, assign, transfer or
otherwise dispose of any of its Property (including, without limitation, the
Nortel Networks Goods and Services), except (subject to the succeeding proviso):
(a) dispositions of Inventory (other than equipment) in the ordinary
course of business;
(b) Asset Dispositions of Property, other than accounts and Receivables,
by the Borrower made in the ordinary course of business if each of the following
conditions have been satisfied: (i)(A) the Net Proceeds from any single Asset
Disposition or series of related Asset Dispositions in any fiscal year of the
Borrower do not exceed $500,000 and (B) the Borrower receives fair consideration
for such assets and (ii) no Default exists at the time of or will result from
such Asset Disposition; provided, that the Borrower may undertake an Asset
---------
Disposition of Property or series of related Asset Dispositions which would
result in Net Proceeds in excess of $500,000 with the prior written consent of
the Required Lenders, which consent shall not be unreasonably withheld.
(c) Asset Dispositions of Property, other than equipment, accounts and
Receivables, by the Borrower to any Wholly-Owned Subsidiary of the Borrower if
each of the following conditions have been satisfied: (i) the assets sold,
disposed of or otherwise transferred to a Wholly-Owned Subsidiary of the
Borrower shall continue to be subject to a perfected, first priority Lien
(except for Permitted Liens, if any, which are expressly permitted by the Loan
Documents to have priority over the Liens in favor of the Administrative Agent)
in favor of the Administrative Agent and the Lenders, and (ii) no Default exists
at the time of or will result from such Asset Disposition; and
(d) dispositions of Property no longer used or useful in the ordinary
course of business, including, without limitation, dispositions of equipment
being exchanged or replaced with comparable or better equipment;
provided, however, that the Borrower will not, and will not permit any
--------- --------
Subsidiary of the Borrower to, sell, lease, assign, transfer or otherwise
dispose of any of the equipment which constitutes Nortel Networks Goods and
Services without the prior written consent of the Required Lenders.
Section 9.9 Sale and Leaseback. Without the prior consent of the
------------------
Required Lenders, which consent shall not be unreasonably withheld, the Borrower
will not, and will not permit any Subsidiary of the Borrower to, enter into any
arrangement with any Person pursuant to which it leases from such Person real or
personal Property that has been or is to be sold or transferred, directly or
indirectly, by it to such Person.
Section 9.10 Lines of Business. Without the prior consent of the
-----------------
Required Lenders, which consent shall not be unreasonably withheld, the Borrower
will not, and will not permit any Subsidiary of the Borrower to, engage in any
line or lines of business activity other than the businesses described in and
contemplated by the Business Plan and the conduct of related telecommunications
businesses and othr reasonably related lines of business.
Section 9.11 Environmental Protection. The Borrower will not, and will
-------------------------
not permit any Loan Party to, (a) use (or permit any tenant to use) any of its
Properties for the handling, processing, storage, transportation or disposal of
any Hazardous Material except in compliance with applicable Environmental Laws,
(b) generate any Hazardous Material except in compliance with applicable
Environmental Laws, (c) conduct any activity that is likely to cause a Release
or threatened Release of any Hazardous Material in violation of any
Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that violates or is likely to violate any
Environmental Law or create any Environmental Liabilities for which the Borrower
or any Loan Party would be responsible, except for circumstances or events
described in clauses (a) through (d) preceding that could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.12 Intercompany Transactions. Except as may be expressly
-------------------------
permitted or required by the Loan Documents or as consented to by the
Administrative Agent, which consent shall not be unreasonably withheld, the
Borrower will not, and will not permit any Loan Party to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Loan Party to (a) pay dividends or
make any other distribution to the Borrower or any of its Subsidiaries in
respect of such Subsidiary's Capital Stock or with respect to any other interest
or participation in, or measured by, its profits, (b) pay any indebtedness owed
to the Borrower or any of its Subsidiaries, (c) make any loan or advance or
capital contribution to the Borrower or any of its Subsidiaries, or (d) sell,
lease or transfer any of its Property to the Borrower or any of its
Subsidiaries.
Section 9.13 Management Fees. The Borrower and its Subsidiaries shall
---------------
not pay any management fees.
Section 9.14 Master Purchase Agreement. The Borrower will not
-------------------------
terminate the Master Purchase Agreement prior to the later to occur of the
Amortization Commencement Date or the satisfaction in full of the Borrower's
purchase commitments under the Master Purchase Agreement.
Section 9.15 Modification of Certain Agreements. Without the prior
-----------------------------------
consent of the Required Lenders, which consent shall not be unreasonably
withheld, the Borrower will not, and will not permit any Loan Party to, consent
to or implement any termination, amendment, modification, supplement or waiver
of (a) the articles of incorporation, articles of organization, bylaws,
regulations or other constitutional documents of the Borrower or any Loan Party
(other than Holdings), (b) the Business Plan or (c) the Inline Contract or any
other Material Contract to which it is a party, or any Permit which it
possesses; provided, however, that the Loan Parties may amend or
-----------------
modify (i) the documents referred to in clause (a) preceding if and to the
----------
extent that such amendment or modification is not substantive or material and
could not be adverse to the Administrative Agent or the Lenders, provided,
---------
however, that none of such documents referred to in clause (a) preceding may
-------- ----------
be amended or modified as they relate to, in any way, any capital contribution
to the Borrower or any obligation or agreement relating thereto, and (ii) the
Material Contracts referred to in clause (c) preceding if and to the extent that
such amendment or modification could not reasonably be expected to be materially
adverse to any Loan Party or any of its Subsidiaries or the Administrative Agent
or any of the Lenders.
Section 9.16 ERISA. The Borrower will not, and will not permit any
-----
Loan Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any action which
would cause, any unfunded or unreserved liability for benefits under any Plan
(exclusive of any Multiemployer Plan) to exist or to be created that exceeds
$100,000 with respect to any such Plan or $200,000 with respect to all such
Plans in the aggregate on either a going concern or a wind-up basis; or
(b) with respect to any Multiemployer Plan, allow, or take (or permit any
ERISA Affiliate to take) any action which would cause, any unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or to be
created, either individually as to any such Plan or in the aggregate as to all
such Plans, that could, upon any partial or complete withdrawal from or
termination of any such Multiemployer Plan or Plans, have a Material Adverse
Effect.
Section 9.17 No Prepayment of Debt, Etc. The Borrower will not, and
---------------------------
will not permit any Subsidiary of the Borrower to, directly or indirectly, make
any optional prepayment or distribution on account of, or voluntarily purchase,
acquire, redeem or retire, any Debt, prior to 30 days before its originally
stated maturity (or its stated maturity as of the Closing Date in the case of
Debt outstanding on the Closing Date), or in the case of interest, its stated
due date, or directly or indirectly become obligated to do any of the foregoing
by amending the terms thereof or otherwise, except for:
(a) subject to Section 2.7(c) hereof, prepayments of the Loans or other
--------------
Obligations pursuant to or as permitted by the Loan Documents and prepayments of
the Debt referred to in clauses (ii) and (iii) of clause (d) of Section 9.1;
----------- ------ --------- ------------
(b) prepayments made with the proceeds of new Debt incurred for the purpose
of refinancing the Debt being prepaid, provided that (i) no portion of such new
Debt matures or is required to be prepaid, purchased or otherwise retired
earlier than the corresponding portion of the Debt being prepaid (including as a
result of any prepayment or redemption upon the occurrence of a condition), (ii)
such new Debt (A) is subordinated to the Obligations to at least the same extent
as the Debt being refinanced if such Debt is subordinated debt or (B) is
permitted in accordance with this Agreement, and (iii) no Default or Event of
Default then exists or would result from such prepayment or refinancing; and
(c) prepayments of trade payables incurred in the ordinary course of the
Borrower's or any Subsidiary's business.
In addition, the Borrower will not, and will not permit any Subsidiary of the
Borrower to, prepay any rent or other obligations under any operating lease or
any other Material Contract prior to 90 days before the originally stated due
date therefor (or the due date therefor as of the Closing Date in the case of
operating leases on Material Contracts in existence on the Closing Date).
ARTICLE 10
Financial Covenants
-------------------
The Borrower and Holdings will be subject to the following tests (measured
for Holdings, Borrower and any Subsidiaries on a consolidated basis):
Section 10.1 Total Debt to Total Capitalization. The Borrower and
-----------------------------------
Holdings will not permit the ratio of (a) Total Debt outstanding at the end of
any of the calendar quarters set forth on on Column 1 of Schedule 10 to (b)
-------- -----------
Total Capitalization on such date, to exceed the ratio set forth opposite such
date on such Schedule.
Section 10.2 Total Debt to Annualized EBITDA. The Borrower and
--------------------------------
Holdings will not permit the ratio of (a) Total Debt outstanding at the end of
any of the calendar quarters set forth on Column 2 of Schedule 10 to (b)
--------- -----------
Annualized EBITDA for the calendar quarter ending on such date, to exceed the
ratio set forth opposite such date on such Schedule.
Section 10.3 Fixed Charge Coverage. The Borrower and Holdings will not
permit the ratio of (a) Annualized EBITDA during any of the calendar quarters
ending on any of the dates set forth on Column 3 of Schedule 10 plus cash
-------- -----------
balances on such date to (b) Consolidated Fixed Charges for the immediately
succeeding calendar quarter, to be less than the ratio set forth opposite such
date on such Schedule.
Section 10.4 Quarterly Minimum Revenue Levels. The Borrower and
---------------------------------
Holdings will not permit Gross Revenues for any of the calendar quarters ending
on any of the dates set forth on Column 4 of Schedule 10 to be less
-------- -----------
than the amount set forth opposite such date on such Schedule.
ARTICLE 11
Default
-------
Section 11.1 Events of Default. Each of the following shall be deemed
-----------------
an "Event of Default":
----------------
(a) (i) The Borrower shall fail to pay, repay or prepay when due, any
amount of principal or interest owing to the Administrative Agent or any Lender
pursuant to this Agreement or any other Loan Document, or (ii) the Borrower
shall fail to pay, within two Business Days after the due date thereof, any fee,
expense or other amount or other Obligation owing to the Administrative Agent or
any Lender pursuant to this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by or on behalf of
any Loan Party in any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this Agreement or
any other Loan Document shall be false, misleading or erroneous in any material
respect when made or deemed to have been made.
(c) Any Loan Party shall fail to perform, observe or comply with any
covenant, agreement or term contained in Section 5.1, 8.1(e), 8.2 (other than
------------ ------ ----
the last sentence thereof), Article 9 or Article 10; any Loan Party shall fail
to perform, observe or comply with any covenant, agreement or term contained in
Article 5 or Section 8.1, 8.2 (the last sentence thereof), 8.3, 8.5, 8.6,
--------- ----------- --- ---- ---- ----
8.7, 8.8, 8.9, 8.10, 8.13 and 8.15, and such failure is not remedied or waived
---- ---- ---- ---- ---- ----
within ten days after such failure commenced; or any Loan Party shall fail to
perform, observe or comply with any other covenant, agreement or term contained
in this Agreement or any other Loan Document (other than covenants to pay the
Obligations) and such failure is not remedied or waived within the earlier to
occur of 30 days after such failure commenced or, if a different grace period is
expressly made applicable in such other Loan Documents, such applicable grace
period.
(d) Any Loan Party ceases to be Solvent or shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become due.
(e) Any Loan Party shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or
administrator of itself or of all or a substantial part of its Property, (ii)
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due, subject to any applicable grace periods, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy Code"), (v) file a petition seeking to take advantage of any
---------------
other law providing for the relief of debtors or relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding up,
or composition or readjustment of debts, (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or other applicable Governmental
Requirement, (vii) dissolve, or (viii) take any entity action for the purpose of
effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the application or
consent of any Loan Party in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, arrangement, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, examiner, liquidator, administrator or the like of it or of
all or any substantial part of its Property, or (iii) similar relief in respect
of it, under any law providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or composition or readjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief shall be entered
in an involuntary case under the Bankruptcy Code against any Loan Party and
shall continue unstayed and in effect for any period of 60 consecutive days.
(g) Any Loan Party shall fail to discharge within a period of 30 days after
the commencement thereof any attachment, sequestration, forfeiture or similar
proceeding or proceedings involving an aggregate amount in excess of $250,000
against any of its Properties.
(h) A final judgment or judgments for the payment of money in excess of
$250,000 in the aggregate shall be rendered by a court or courts against any
Loan Party on claims not covered by insurance and the same shall not be
discharged, bonded or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and any Loan Party shall not, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
(i) Any Loan Party shall fail to pay when due any principal of or interest
on any Debt of such Loan Party (other than the Obligations) having (either
individually or in the aggregate) a principal amount of at least $250,000 or the
maturity of any such Debt shall have been accelerated, or any such Debt shall
have been required to be prepaid prior to the stated maturity thereof, or any
event shall have occurred (and shall not have been waived or otherwise cured)
that permits (or, with the giving of notice or lapse of time or both, would
permit) any holder or holders of such Debt or any Person acting on behalf of
such holder or holders to accelerate the maturity thereof or require any such
prepayment.
(j) This Agreement or any other Loan Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party or any
Loan Party shall deny that it has further liability or obligation under any of
the Loan Documents; or any Lien created or purported to be created by
the Loan Documents shall for any reason cease to be or fail to be a valid, first
priority perfected Lien upon any of the Collateral purported to be covered
thereby.
(k) Any of the following events shall occur or exist with respect to any
Loan Party or any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan; (ii) any Reportable Event with respect to any Pension Plan; (iii) the
filing under Section 4041 of ERISA of a notice of intent to terminate any
Pension Plan or the termination of any Pension Plan; (iv) any event or
circumstance that could reasonably be expected to constitute grounds entitling
the PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer, any Pension
Plan, or the institution by the PBGC of any such proceedings; (v) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived, shall exist with respect to any Pension
Plan; or (vi) complete or partial withdrawal under Section 4201 or 4204 of ERISA
from a Multiemployer Plan or the reorganization, insolvency or termination of
any Pension Plan; and in each case above, such event or condition, together with
all other events or conditions, if any, have subjected or could in the
reasonable opinion of Required Lenders subject any Loan Party or any ERISA
Affiliate to any tax, penalty or other liability to a Plan, a Multiemployer
Plan, the PBGC or otherwise (or any combination thereof) which in the aggregate
exceed or could reasonably be expected to exceed $100,000.
(l) The occurrence of any breach or default by the Borrower under the
Supply Agreement (after giving effect to any grace or cure period specified
therein) which breach or default entitles Nortel Networks to exercise a right or
remedy under or in connection with the Master Purchase Agreement.
(m) The occurrence of any Material Adverse Effect.
(n) The occurrence of any Change in Control.
Section 11.2 Remedies. If any Event of Default shall occur and be
--------
continuing, the Administrative Agent may and, if directed by the Required
Lenders, the Administrative Agent shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and accrued and
-------------
unpaid interest on the Loans and all other amounts payable by the Borrower under
the Loan Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower;
(b) Termination of Commitments. Terminate each of the Commitments
--------------------------
without notice to the Borrower;
(c) Judgment. Reduce any claim to judgment;
---------
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
-----------
Administrative Agent for the benefit of the Administrative Agent and the Lenders
to secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; or
(e) Rights. Exercise any and all rights and remedies afforded by the
------
laws of the State of New York or any other jurisdiction, by any of the Loan
Documents, by equity or otherwise; provided, however, that upon the
--------- --------
occurrence of an Event of Default under Section 11.1(e) or Section 11.1(f),
--------------- ---------------
the Commitments of all of the Lenders shall immediately and automatically
terminate, and the outstanding principal of and accrued and unpaid interest on
the Loans and all other amounts payable by the Borrower under the Loan Documents
shall thereupon become immediately and automatically due and payable.
Section 11.3 Performance by the Administrative Agent, etc. If the
---------------------------------------------
Borrower shall fail to perform any covenant or agreement in accordance with the
terms of the Loan Documents, the Administrative Agent may perform or attempt to
perform, or may cause any Lender (with the consent of such Lender) to perform or
attempt to perform, such covenant or agreement on behalf of the Borrower. In
such event, the Borrower shall, at the request of the Administrative Agent,
promptly pay any amount expended by the Administrative Agent or the Lenders in
connection with such performance or attempted performance to the Administrative
Agent at its Principal Office, together with interest thereon at the applicable
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Administrative Agent nor any Lender shall have
any liability or responsibility for the performance of any obligation of the
Borrower or any other Person under this Agreement or any of the other Loan
Documents.
ARTICLE 12
The Administrative Agent
------------------------
Section 12.1 Appointment, Powers and Immunities. Each Lender hereby
-----------------------------------
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Neither the Administrative Agent nor any of its
Affiliates, officers, directors, employees, attorneys or agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or
otherwise in connection with this Agreement or any of the other Loan Documents
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the preceding sentence, the Administrative Agent (a)
may treat the payee of any Note as the holder thereof until the Administrative
Agent receives written notice of the assignment or transfer thereof signed by
such payee and in form satisfactory to the Administrative Agent, (b) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary for any Lender, (c) shall not be
required to initiate any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent requested by the Required Lenders,
(d) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or any other Loan
Document, or any certificate or other document referred to or provided for in,
or received by any of them under, this
Agreement or any other Loan Document, or for the value, validity, effectiveness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by any Person to perform any of its obligations hereunder or thereunder,
(e) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, and (f)
shall incur no liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate or other instrument or writing reasonably
believed by it to be genuine and signed or sent by the proper party or parties.
As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Lenders, and such instructions of the Required Lenders and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders;
provided, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to liability or which is
contrary to this Agreement or any other Loan Document or applicable law. The
Administrative Agent shall not be deemed to have any fiduciary relationship with
any Lender or any Loan Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing, the use of the term "agent" in this Agreement
with respect to the Administrative Agent is not intended to connote any
fiduciary or other express or implied obligation arising under agency doctrine
of any applicable law; instead, such term is used merely as a matter of market
custom and is intended to create or reflect only an administrative relationship
among independent contracting parties.
Section 12.2 Rights of Administrative Agent as a Lender. With respect
------------------------------------------
to its Commitments, the Loans made by it and the Note(s) issued to it, Nortel
Networks (and any successor acting as Administrative Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant banking services to, own
securities of, and generally engage in any kind of banking, trust or other
business with, the Borrower or any of its Affiliates and any other Person who
may do business with or own securities of the Borrower or any of its Affiliates,
all as if it were not acting as the Administrative Agent and without any duty to
account therefor to the Lenders.
Section 12.3 Defaults. The Administrative Agent shall not be deemed to
--------
have knowledge or notice of the occurrence of a Default (other than the
non-payment of principal of or interest on the Loans or of commitment fees)
unless the Administrative Agent has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders (and shall give each Lender prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section 12.1) take such
action with respect to such Default as shall be directed by the Required
Lenders, provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall seem advisable and in the best interest of
the Lenders.
Section 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO INDEMNIFY
----------------
THE ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENT HARMLESS
AGAINST (TO THE EXTENT NOT REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT
------------- -----
WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SECTIONS 13.1 AND 13.2),
RATABLY IN ACCORDANCE WITH ITS PRO RATA SHARE (CALCULATED ON THE BASIS OF ITS
COMMITMENT PERCENTAGE OF THE COMMITMENTS), ANY AND ALL LIABILITIES (INCLUDING,
WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY THE ADMINISTRATIVE AGENT UNDER OR IN RESPECT OF ANY OF
THE LOAN DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY
---------
PORTION OF THE FOREGOING TO THE EXTENT CAUSED BY THE ADMINISTRATIVE AGENT'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT
IS THE EXPRESS INTENTION OF THE LENDERS THAT THE ADMINISTRATIVE AGENT SHALL BE
INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
OF THE ADMINISTRATIVE AGENT (EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE
ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITING
ANY OTHER PROVISION OF THIS SECTION 12.4, EACH LENDER AGREES TO REIMBURSE THE
------------
ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON
THE BASIS OF ITS COMMITMENT PERCENTAGE OF THE COMMITMENTS) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE
ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE
BORROWER.
Section 12.5 Independent Credit Decisions. Each Lender agrees that it
----------------------------
has independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and the Subsidiaries
of the Borrower and its own decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower (or any other
Person) of this Agreement or any other Loan Document or to inspect the
Properties or books of the Borrower (or any other Person). Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder or under the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other financial
information concerning the affairs, financial condition or business of the
Borrower (or any of its Affiliates) which may come into the possession of the
Administrative Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other
--------------------
obligations of the Lenders under this Agreement are several. The default by any
Lender in making a Loan in accordance with any of its Commitments shall not
relieve the other Lenders of their obligations under this Agreement. In the
event of any default by any Lender in making any Loan, each nondefaulting Lender
shall be obligated to make its Loan but shall not be obligated to advance the
amount which the defaulting Lender was required to advance hereunder. In no
event shall any Lender be required to advance an amount or amounts with respect
to any of the Loans which would in the aggregate exceed such Lender's Commitment
with respect to such Loans. No Lender shall be responsible for any act or
omission of any other Lender.
Section 12.7 Successor Administrative Agent. Subject to the
------------------------------
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Borrower. Upon any such resignation, the Required Lenders
will have the right to appoint another Lender as a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the U.S. or any state thereof or of a foreign country if acting through its
U.S. branch and having combined capital and surplus of at least $100,000,000.
Upon the acceptance of its appointment as successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges, immunities and duties of the resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any Administrative Agent's resignation as Administrative Agent,
the provisions of this Article 12 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Administrative Agent. Each Administrative Agent (including each successor
Administrative Agent) agrees that, so long as it is acting as Administrative
Agent under this Agreement, it shall be a Lender under this Agreement.
ARTICLE 13
Miscellaneous
--------------
Section 13.1 Expenses. Each of the Borrower and the Administrative
---------
Agent shall pay its own costs and expenses (including attorneys' fees and
expenses) associated with the preparation, negotiation, execution and delivery
of this Agreement The Borrower hereby agrees, on demand, to pay or reimburse the
Administrative Agent and each of the Lenders for paying: (a) all reasonable
out-of-pocket costs and expenses of the Administrative Agent accrued in
connection with any and all waivers, amendments, modifications, renewals,
extensions and supplements of or to the Loan Documents, and the syndication of
the Commitments and the Loans, including, without limitation, the reasonable
fees and expenses of legal counsel (including all local
counsel) for the Administrative Agent, (b) all out-of-pocket costs and expenses
of the Administrative Agent and the Lenders in connection with any Default, the
exercise of any right or remedy and the enforcement of this Agreement or any
other Loan Document or any term or provision hereof or thereof, including,
without limitation, the reasonable fees and expenses of all legal counsel for
the Administrative Agent and/or any Lender, (c) all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any Governmental
Authority in respect of this Agreement or any of the other Loan Documents, (d)
all costs, expenses, assessments and other charges incurred in connection with
any filing, registration, recording or perfection of any Lien contemplated by
this Agreement or any other Loan Document, and (e) all reasonable out-of-pocket
costs and expenses incurred by the Administrative Agent in connection with due
diligence, computer services, copying, appraisals, environmental audits,
collateral audits, field exams, insurance, consultants and search reports.
Section 13.2 INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY
---------------
THE ADMINISTRATIVE AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS FROM, AND HOLD
EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES (INCLUDING,
WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
AND CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR
INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY,
PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY FORECLOSURE RIGHT OR OTHER
RIGHT OR REMEDY WHETHER OR NOT SUCH EXERCISE IS IN COMPLIANCE WITH LAWS
AFFECTING OTHER PERSONS OR RESULTS IN DAMAGES PAYABLE TO OTHER PERSONS, (B) ANY
OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS (EXCLUSIVE OF THE MASTER
PURCHASE AGREEMENT WHICH, AS TO THE MATTERS ADDRESSED IN THIS SECTION, SHALL BE
GOVERNED BY ITS TERMS), (C) ANY BREACH BY THE BORROWER OF ANY MATERIAL
REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE OF ANY LOAN, (E) THE PRESENCE,
RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR CLEANUP OF ANY HAZARDOUS
MATERIAL LOCATED ON, ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF THE
BORROWER OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE OR
CLAIM IS THE DIRECT RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PERSON TO BE INDEMNIFIED, OR (F) ANY INVESTIGATION, LITIGATION OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING
ANY OF THE FOREGOING CLAUSES (A) THROUGH (F) TO THE EXTENT CAUSED BY OR ARISING
OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER
LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH
PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2 SHALL BE INDEMNIFIED FROM AND
HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING
OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER TERM OR PROVISION OF THIS
AGREEMENT, THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 13.2 SHALL SURVIVE
------------
THE REPAYMENT OF THE LOANS AND OTHER OBLIGATIONS AND TERMINATION OF THE
COMMITMENTS.
Section 13.3 Limitation of Liability. None of the Administrative
-----------------------
Agent, any Lender or any Affiliate, officer, director, employee, attorney or
agent thereof shall be liable for any error of judgment or act done in good
faith, or be otherwise liable or responsible under any circumstances
whatsoever (including such Person's negligence), except for such Person's gross
negligence or willful misconduct. None of the Administrative Agent, any Lender
or any Affiliate, officer, director, employee, attorney or agent thereof shall
have any liability with respect to, and the Borrower hereby waives, releases and
agrees not to ▇▇▇ any of them upon, any claim for any special, indirect,
incidental or consequential damages suffered or incurred by the Borrower or any
Affiliate of the Borrower in connection with, arising out of or in any way
related to this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
The Borrower hereby waives, releases and agrees not to ▇▇▇ the Administrative
Agent or any Lender or any of their respective Affiliates, officers, directors,
employees, attorneys or agents for exemplary or punitive damages in respect of
any claim in connection with, arising out of or in any way related to this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and other
-------
professional Persons and consultants retained by the Administrative Agent and
the Lenders shall have the right to act exclusively in the interest of the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care or other duty or obligation of any type or nature
whatsoever to the Borrower or any of its Affiliates or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship between the
-------------------------
Borrower and each Lender is solely that of debtor and creditor, and neither the
Administrative Agent nor any Lender has any fiduciary or other special
relationship with the Borrower or any of its Affiliates, and no term or
condition of any of the Loan Documents shall be construed so as to deem the
relationship between the Borrower and any Lender, or such Affiliate and any
Lender, to be other than that of debtor and creditor. No joint venture or
partnership is created by this Agreement among the Lenders or among the Borrower
or any of its Affiliates and the Lenders.
Section 13.6 Equitable Relief. The Borrower recognizes that, in the
----------------
event it fails to pay, perform, observe or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the
Administrative Agent and the Lenders. The Borrower therefore agrees that the
Administrative Agent and the Lenders, if the Administrative Agent or the Lenders
so request, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of
-------------------------------
the Administrative Agent or any Lender to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Borrower may not
assign or transfer any of its rights or obligations under this Agreement or any
other Loan Document without the prior written consent of the Administrative
Agent and the Lenders. Any Lender may sell participations in all or a portion of
its rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitments and the
Loans owing to it); provided, however, that (i) such Lender's obligations under
-----------------
this Agreement and the other Loan Documents (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the Borrower for the performance of such obligations, (iii) such
Lender shall remain the holder of its Notes for all purposes of this Agreement,
(iv) the Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents, and (v) the Lenders shall not grant any participation
under which the participant shall have the right to approve (or under which the
consent of the participant must be obtained prior to the Lenders' being able to
approve) any amendment or waiver of this Agreement or the other Loan Documents,
except to the extent that such amendment or waiver (A) increases any Commitment,
(B) reduces the interest rate or the amount of principal or fees applicable to
the Loans or Commitments in which such participant is participating, (C) extends
any Maturity Date, (D) releases any of the Collateral (except as provided for
herein or in any other Loan Document) or any guaranty of the Obligations, or (E)
releases any Loan Party from its monetary Obligations under any of the Loan
Documents.
(b) The Borrower and each of the Lenders agree that any Lender (the
"Assigning Lender") may at any time assign to one or more Eligible Assignees all
or any part of its rights and/or obligations under this Agreement and the other
Loan Documents (including, without limitation, its Commitments and/or Loans)
(each an "Assignee"); provided, however, that (i) each such assignment may be of
a varying percentage of the Assigning Lender's rights and/or obligations under
this Agreement and the other Loan Documents and may relate to some but not all
of such rights and/or obligations, (ii) except in the case of an assignment of
all of a Lender's rights and obligations under this Agreement and the other Loan
Documents, the amount of the Commitment(s) and/or Loans of the Assigning Lender
being assigned pursuant to each assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 calculated based upon the aggregate amount of the
Commitment(s) and/or Loans assigned and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with the Note subject to such assignment, and a processing
and recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof or such other date as may be approved by the Administrative
Agent, (1) the Assignee thereunder shall be a party hereto as a "Lender" and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder and under the Loan Documents, and (2) the Assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement and the other Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of a Lender's rights and obligations under the Loan Documents,
such Lender shall
cease to be a party thereto, provided that such Lender's rights under Article 4,
Section 13.1 and Section 13.2 accrued through the date of assignment shall
continue). The Borrower will provide full and prompt assistance to each Lender
as it may reasonably request from time to time in connection with such Lender's
efforts to assign its Commitments and/or Loans or sell any participation
interest therein. Such assistance shall include, without limitation, making
senior officers of the Borrower available for meetings with prospective Lenders
and participants and providing (in a timely manner) such assistance as may be
reasonably requested by such Lender and/or its advisors, including, without
limitation, providing information to and responding to inquiries from such
prospective Lenders and participants with respect to the businesses, operations,
business plan, financial condition and results of operations of the Borrower and
its Subsidiaries.
(c) By executing and delivering an Assignment and Acceptance, the Assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such Assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition or results
of operations of the Borrower or any of its Affiliates or the performance or
observance by the Borrower or any of its Affiliates of its obligations under the
Loan Documents; (iii) such Assignee confirms that it has received a copy of the
Loan Documents, together with copies of the financial statements referred to in
Section 7.2 and such other documents and information as it has deemed
-----------
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such Assignee will, independently and without
reliance upon the Administrative Agent or such Assigning Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents; (v) such Assignee confirms that it
is an Eligible Assignee; (vi) such Assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and exercise
such powers under the Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender. (d) The
Administrative Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes under the Loan Documents. The Register shall
be available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note(s) subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
---------
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt written notice thereof to the Borrower. Within five Business
Days after its receipt of such notice, the Borrower, at its expense, shall
execute and deliver to the Administrative Agent in exchange for each surrendered
Note evidencing the Loans assigned, a new Note evidencing such Loans payable to
the order of such Eligible Assignee in an amount equal to such Loans assigned to
it and, if the Assigning Lender has retained any Loans, a new Note evidencing
each such Loans payable to the order of the Assigning Lender in the amount of
such Loans retained by it (each such promissory note shall constitute a "Note"
for purposes of the Loan Documents). Such new Notes shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit B hereto.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 13.8,
disclose to the Assignee or participant or proposed Assignee or participant
any information relating to the Borrower or any of its Affiliates furnished to
such Lender by or on behalf of the Borrower or any of its Affiliates; provided
that each such actual or proposed Assignee or participant shall agree to be
bound by the provisions of Section 13.20.
-------------
(g) Any Lender may assign and pledge any Note held by it to any Federal Reserve
Bank or the U.S. Treasury as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve System and/or Federal Reserve Bank; provided,
---------
however, that any payment made by the Borrower for the benefit of such assigning
-------
and/or pledging Lender in accordance with the terms of the Loan Documents shall
satisfy the Borrower's obligations under the Loan Documents in respect thereof
to the extent of such payment. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
(h) The Borrower shall maintain, or cause to be maintained, a register (the
"Registered Note Register") (which, at the request of the Borrower (which
------------------------
request the Borrower makes by the execution of this Agreement) shall be kept by
the Administrative Agent on behalf of the Borrower at no extra charge to the
Borrower at the address to which notices to the Administrative Agent are to be
sent hereunder) on which it shall enter the name of the registered owner of each
of the Loans which is evidenced by a Registered Note. Notwithstanding anything
to the contrary contained in this Section 13.8, a Registered Note and the Loans
------------
evidenced thereby may be assigned or otherwise transferred in whole or in part
only by registration of such assignment or transfer of such Registered Note and
the Loans evidenced thereby on the Registered Note Register (and each Registered
Note shall expressly so provide). Any assignment or transfer of all or part of
such Loans and the Registered Note evidencing the same shall be registered on
the Registered Note Register only upon surrender for registration of assignment
or transfer of the Registered Note evidencing such Loans, duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the registered noteholder thereof, and thereupon one or more new Registered
Notes in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the due presentment for registration of
transfer of any Registered Note, the Borrower and the Administrative Agent shall
treat the Person in whose name such Loans and the Registered Note(s) evidencing
the same are registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding any notice to the
contrary. The Registered Note Register shall be available for inspection by the
Borrower and any Lender at any reasonable time upon reasonable prior notice.
(i) The Borrower will not become a party to any loan agreement, credit
agreement or similar agreement which restricts or prohibits the right or ability
of any lender which is a party thereto to become a Lender under this Agreement.
(j) The Borrower shall provide prompt assistance to the Administrative
Agent and the Lenders in connection with their efforts in syndicating the Loans
and Commitments. Such assistance shall include making senior officers and other
representatives of the Borrower and its Affiliates available for meetings with
prospective Lenders and providing, in a timely manner, such assistance as may be
reasonably requested by the Administrative Agent or its advisors, including,
without limitation, providing information to and responding to inquiries from
prospective Lenders with respect to the business, operations, Business Plan,
results and other matters relating to the business of the Borrower and the other
Loan Parties.
Section 13.9 Survival. All representations and warranties made or
--------
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the
Administrative Agent or any Lender or any closing shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the Borrower under
Article 4 and Sections 13.1 and 13.2 shall survive repayment of the Loans and
--------- ------------- ----
the Reimbursement Obligations and the other Obligations.
Section 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
-----------------
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, TERM SHEETS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
Section 13.11 Amendments. No amendment or waiver of any provision of
----------
this Agreement, the Notes or any other Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Lenders and the Borrower in writing, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all of the Lenders and the Borrower, do any of
the following: (a) increase the Commitments of the Lenders (or any Lender) or
subject the Lenders to any additional obligations; (b) reduce the principal of,
or interest on, the Loans or any fees or other amounts payable hereunder; (c)
postpone any date fixed for any payment (including, without limitation, any
mandatory prepayment) of principal of, or interest on, the Loans or any fees or
other amounts payable hereunder; (d) change the Commitment Percentages or the
aggregate unpaid principal amount of the Loans
or the number or interests of the Lenders which shall be required for the
Lenders or any of them to take any action under this Agreement; (e) change any
provision contained in Section 3.2, 3.3 or 5.1 or this Section 13.11 or modify
-----------------------
the definition of "Required Lenders" contained in Section 1.1; or (f) except as
expressly authorized by this Agreement, release any Collateral from any of the
Liens created by the Security Documents; and provided further, however, that no
amendment, waiver or consent relating to Sections 12.1, 12.2, 12.3,
------------- ----- -----
12.4 or 12.5 shall require the agreement of the Borrower. Notwithstanding
---- --
anything to the contrary contained in this Section 13.11, no amendment, waiver
-------------
or consent shall be made with respect to (i) Article 12 hereof without the
----------
prior written consent of the Administrative Agent, (ii) the definition of
"Nortel Networks Goods and Services" or "Master Purchase Agreement" or Section
-------
2.5, 2.9 or 2.10 hereof without the prior written consent of Nortel Networks
---- ----
(whether or not Nortel Networks is then a Lender hereunder), or (iii) any
condition precedent set forth in Article 6 with respect to the making of any
---------
Loans without the prior written consent of the Lenders that hold, at the time of
such amendment, waiver or consent, at least a majority (in Dollar amount) of the
Commitments.
Section 13.12 Maximum Interest Rate.
----------------------
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the interest
rate (the "Contract Rate") for any Obligation shall exceed the Maximum Rate,
-------------
thereby causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this Agreement
or the other Loan Documents, none of the terms and provisions of this Agreement
or the other Loan Documents shall ever be construed to create a contract or
obligation to pay interest at a rate in excess of the Maximum Rate; and neither
the Administrative Agent nor any Lender shall ever charge, receive, take,
collect, reserve or apply, as interest on the Obligations, any amount in excess
of the Maximum Rate. The parties hereto agree that any interest, charge, fee,
expense or other obligation provided for in this Agreement or in the other Loan
Documents which constitutes interest under applicable law shall be, ipso facto
and under any and all circumstances, limited or reduced to an amount equal to
the lesser of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section 13.12(b) or (ii)
----------------
an amount, which when added to all other interest payable under this Agreement
and the other Loan Documents, equals the Maximum Rate. If, notwithstanding the
foregoing, the Administrative Agent or any Lender ever contracts for, charges,
receives, takes, collects, reserves or applies as interest any amount in excess
of the Maximum Rate, such amount which would be deemed excessive interest shall
be
deemed a partial payment or prepayment of principal of the Obligations and
treated hereunder as such; and if the Obligations, or applicable portions
thereof, are paid in full, any remaining excess shall promptly be paid to the
Borrower. In determining whether the interest paid or payable, under any
specific contingency, exceeds the Maximum Rate, the Borrower, the Administrative
Agent and the Lenders shall, to the maximum extent permitted by applicable law,
(i) characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
and (iii) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations, or applicable portions thereof, so that the interest rate does not
exceed the Maximum Rate at any time during the term of the Obligations; provided
that, if the unpaid principal balance is paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Rate, the Administrative
Agent and/or the Lenders, as appropriate, shall refund to the Borrower the
amount of such excess and, in such event, the Administrative Agent and the
Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting, reserving or applying
interest in excess of the Maximum Rate.
(c) Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79, Revised Civil
Statutes of Texas 1925, as amended, the Borrower agrees that such Chapter 15
(which regulates certain revolving credit loan accounts and revolving tri-party
accounts) shall not govern or in any manner apply to the Obligations.
Section 13.13 Notices. All notices and other communications provided
-------
for in this Agreement and the other Loan Documents to which the Borrower is a
party shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof (or, with respect to a Lender that becomes a party to this Agreement
pursuant to an assignment made in accordance with Section 13.8, in the
-------------
Assignment and Acceptance executed by it); or, as to any party, at such other
address as shall be designated by such party in a notice to each other
party given in accordance with this Section 13.13. Except as otherwise provided
-------------
in this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid;
provided, however, that notices to the Administrative Agent shall be deemed
given when received by the Administrative Agent.
Section 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
-----------------------------------------------------
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN CERTAIN LOAN
--------
DOCUMENTS, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND EACH OF THE PARTIES
HERETO CHOOSE THE LAWS OF THE STATE OF NEW YORK TO GOVERN THIS AGREEMENT
PURSUANT TO N.Y. GEN. OBLIG. LAW SECTION 5-1401 (CONSOL. 1995) AND APPLICABLE
LAWS OF THE U.S. THE BORROWER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF EACH OF (1) THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
(2) ANY NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK, (3) THE U.S.
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, AND (4) ANY TEXAS STATE
COURT SITTING IN DALLAS COUNTY, TEXAS, FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS
ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. THE BORROWER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
Section 13.15 Counterparts. This Agreement may be executed in one or
-------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions and arrangements used in
--------
this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 13.18 Construction. The Borrower, the Administrative Agent and
-------------
each Lender acknowledges that it has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 13.19 Independence of Covenants. All covenants hereunder shall
-------------------------
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 13.20 Confidentiality. Each Lender agrees to exercise its best
---------------
efforts to keep any information delivered or made available by the Borrower to
it which is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided that nothing herein shall prevent any Lender
--------
from disclosing such information (a) to any other Lender, (b) to any Person if
reasonably incidental to the administration of the Loans, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Lender, (e) which
has been publicly disclosed, (f) in connection with any litigation to which the
Administrative Agent, any Lender or their respective Affiliates may be a party,
(g) to the extent reasonably required in connection with the exercise of any
right or remedy under the Loan Documents, (h) to such Lender's legal counsel,
independent auditors and affiliates, and (i) to any actual or proposed
participant or Assignee of all or part of its rights hereunder, so
long as such actual or proposed participant or Assignee agrees to be bound by
the provisions of this Section 13.20.
-------------
Section 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be expressly
---------------------
provided to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement of the other Loan Documents
where the approval, consent or exercise of judgment of the Administrative Agent
or any Lender is requested or required, (a) the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of the Administrative Agent or such Lender, respectively, and the
Administrative Agent and such Lender shall not, for any reason or to any extent,
be required to grant such approval or consent or to exercise such judgment in
any particular manner, regardless of the reasonableness of the request or the
action or judgment of the Administrative Agent or such Lender, and (b) no
approval or consent of the Administrative Agent or any Lender shall in any event
be effective unless the same shall be in writing and the same shall be effective
only in the specific instance and for the specific purpose for which given.
Section 13.23 Service of Process. The Borrower irrevocably consents to
------------------
the service of process by the mailing thereof by the Administrative Agent or the
Required Lenders by registered or certified mail, postage prepaid, to the
Borrower at its address listed on the signature pages hereof. Nothing in this
Section 13.23 shall affect the right of the Administrative Agent or the
-------------
Lenders to serve legal process in any other manner permitted by law or affect
the right of the Administrative Agent or any Lender to bring any action or
proceeding against the Borrower or its Property in the court of any
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
CAIS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
------------------------------
Title: Chief Executive Officer
------------------------------
Address for Notices:
--------------------
CAIS, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention:
--------------------------------
Telecopy No.:
--------------------------------
Telephone No.:
--------------------------------
ADMINISTRATIVE AGENT:
--------------------
NORTEL NETWORKS INC.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director, Customer Finance
Address for Notices:
--------------------
Nortel Networks Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Finance
Carrier Packet Solutions
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Nortel Networks Inc.
GMS 991 15 A40
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President,
Customer Finance North America
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Nortel Networks Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mail Stop 04D/02/A40
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇,
Loan Administration
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS:
--------
Commitment: $ 30,000,000 NORTEL NETWORKS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director, Customer Finance
Address for Notices:
--------------------
Nortel Networks Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Finance
Carrier Packet Solutions
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Nortel Networks Inc.
GMS 991 15 A40
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President,
Customer Finance North America
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Nortel Networks Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mail Stop 04D/02/A40
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇, Loan Administration
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for Base Rate Loans:
----------------------------------
Nortel Networks Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
-----------------------------------
Nortel Networks Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
Attached
--------
EXHIBIT B-1
-----------
FORM OF NOTE
Attached
--------
EXHIBIT C
---------
FORM OF NOTICE OF BORROWINGS, CONVERSIONS,
CONTINUATIONS OR PREPAYMENTS
Attached
--------
EXHIBIT D
---------
FORM OF COMPLIANCE CERTIFICATE
Attached
--------
SCHEDULE 1.1(a)
CERTAIN PERMITTED HOLDERS
Attached
--------
SCHEDULE 1.1(b)
---------------
CERTAIN PERMITTED LIENS
Attached
--------
SCHEDULE 7.4
------------
PERMITS, FRANCHISES, LICENSES AND AUTHORIZATIONS REQUIRED BY GOVERNMENTAL
REQUIREMENTS OR ISSUED BY GOVERNMENTAL AUTHORITIES
Attached
--------
SCHEDULE 7.5
------------
INTELLECTUAL PROPERTY
Attached
--------
SCHEDULE 7.6
------------
LITIGATION, ETC.
Attached
--------
SCHEDULE 7.7
------------
REAL PROPERTY INTERESTS
Attached
--------
SCHEDULE 7.10
-------------
EXISTING DEBT
Attached
--------
SCHEDULE 7.13
-------------
PLANS
Attached
--------
SCHEDULE 7.15
-------------
SUBSIDIARIES
Attached
--------
SCHEDULE 7.22
-------------
MATERIAL CONTRACTS
Attached
--------
SCHEDULE 7.23
-------------
BANK ACCOUNTS
Attached
--------
SCHEDULE 7.26
-------------
EMPLOYEE MATTERS
Attached
--------
SCHEDULE 7.27
-------------
INSURANCE
Attached
--------
SCHEDULE 7.29
-------------
CAPITALIZATION
Attached
--------
SCHEDULE 8.13
-------------
YEAR 2000 COMPLIANCE
Attached
--------
SCHEDULE 8.17
-------------
ASSETS USED IN THE TELECOMMUNICATIONS BUSINESS OF THE BORROWER,
HOLDINGS AND THEIR SUBSIDIARIES NOT OWNED BY THE BORROWER
SCHEDULE 9.5
------------
CERTAIN INVESTMENTS
Attached
---------
SCHEDULE 9.7
------------
EXISTING RELATIONSHIPS WITH AFFILIATES
Attached
--------
SCHEDULE 10
-----------
FINANCIAL COVENANTS
Attached
--------