EXHIBIT 99.3
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AMENDED AND RESTATED
TERM LOAN AND CREDIT AGREEMENT
Dated as of December 21, 2004
among
RCN CORPORATION
The Lenders Party hereto
and
HSBC Bank USA, National Association,
as Agent and Collateral Agent
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.....................................................3
1.01 Defined Terms......................................................3
1.02 [Reserved]........................................................33
1.03 Terms Generally...................................................33
1.04 Accounting Terms..................................................33
ARTICLE II THE CREDITS....................................................33
2.01 Outstanding Term Loans............................................33
2.02 [Reserved]........................................................33
2.03 [Reserved]........................................................33
2.04 [Reserved]........................................................34
2.05 [Reserved]........................................................34
2.06 [Reserved]........................................................34
2.07 [Reserved]........................................................34
2.08 Repayment of Term Loans; Evidence of Debt.........................34
2.09 Repayment of Term Loans...........................................34
2.10 Prepayment of Term Loans..........................................35
2.11 [Reserved]........................................................36
2.12 Fees..............................................................36
2.13 Interest..........................................................36
2.14 [Reserved]........................................................37
2.15 Increased Costs...................................................37
2.16 [Reserved]........................................................38
2.17 Taxes.............................................................38
2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.......39
2.19 Mitigation Obligations; Replacement of Lenders....................41
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................41
3.01 Organizational Status.............................................42
3.02 Power and Authority...............................................42
3.03 No Violation......................................................42
3.04 Approvals.........................................................42
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TABLE OF CONTENTS
(continued)
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3.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections.........................................43
3.06 Litigation........................................................44
3.07 True and Complete Disclosure......................................44
3.08 Use of Proceeds...................................................44
3.09 Tax Returns and Payments..........................................44
3.10 Compliance with ERISA.............................................45
3.11 The Security Documents............................................46
3.12 Properties........................................................46
3.13 Capitalization....................................................46
3.14 Subsidiaries......................................................47
3.15 Compliance with Statutes..........................................47
3.16 Investment Company Act............................................47
3.17 Public Utility Holdings Company Act...............................47
3.18 Environmental Matters.............................................47
3.19 Labor Relations...................................................48
3.20 Intellectual Property, etc........................................48
3.21 Indebtedness......................................................48
3.22 Insurance.........................................................49
3.23 Representations and Warranties in Other Documents.................49
3.24 FCC Licenses and Other Governmental Authorizations................49
3.25 Intercreditor Agreement...........................................50
3.26 Certain Agreements................................................51
3.27 Event of Default..................................................51
ARTICLE IV CONDITIONS.....................................................51
4.01 Effective Date....................................................51
ARTICLE V AFFIRMATIVE COVENANTS..........................................56
5.01 Information Covenants.............................................56
5.02 Corporate Existence...............................................58
5.03 Payment of Taxes and Other Claims.................................58
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TABLE OF CONTENTS
(continued)
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5.04 Maintenance of Properties.........................................58
5.05 Insurance.........................................................58
5.06 Books and Records.................................................59
5.07 Payment of Principal and Interest.................................59
5.08 Collateral Trigger Date; Additional Subsidiaries..................59
5.09 Future Amendments.................................................61
ARTICLE VI NEGATIVE COVENANTS.............................................61
6.01 Limitation on Additional Indebtedness.............................61
6.02 Limitation on Liens...............................................61
6.03 Fundamental Changes...............................................62
6.04 Disposition of Proceeds of Asset Sales............................62
6.05 Limitation on Restricted Payments.................................63
6.06 Limitation on Transactions with Affiliates........................66
6.07 Limitation on Issuances and Sales of Preferred Stock by
Restricted Subsidiaries..........................................66
6.08 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries................................67
6.09 Designation of Unrestricted Subsidiaries..........................67
6.10 Limitations on Layering...........................................68
6.11 Collateral Trigger Date...........................................69
ARTICLE VII EVENTS OF DEFAULT; LIMITATION ON REMEDIES......................69
7.01 Events of Default.................................................69
ARTICLE VIII THE AGENT......................................................71
ARTICLE IX MISCELLANEOUS..................................................73
9.01 Notices...........................................................73
9.02 Waivers; Amendments...............................................74
9.03 Expenses; Indemnity; Damage Waiver................................75
9.04 Successors and Assigns............................................76
9.05 Survival..........................................................78
9.06 Counterparts; Integration; Effectiveness..........................79
9.07 Severability......................................................79
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TABLE OF CONTENTS
(continued)
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9.08 Right of Setoff...................................................79
9.09 Governing Law; Jurisdiction; Consent to Service of Process........79
9.10 WAIVER OF JURY TRIAL..............................................80
9.11 Headings..........................................................80
9.12 Confidentiality...................................................80
9.13 Interest Rate Limitation..........................................81
9.14 Release of Subsidiaries; Collateral...............................81
9.15 Intercreditor Agreement Controls..................................82
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SCHEDULES:
Schedule 1.01A -- Existing Liens
Schedule 1.01B -- Existing Investments
Schedule 2.01 -- Lenders
Schedule 3.09 -- Tax Returns and Payments
Schedule 3.10 -- Compliance with ERISA
Schedule 3.12 -- Real Property
Schedule 3.14 -- Subsidiaries
Schedule 3.21 -- Existing Indebtedness
Schedule 3.22 -- Insurance
Schedule 3.24 -- FCC Licenses and other Governmental Authorizations
Schedule 4.01(k) -- Assumed Indebtedness
Schedule 6.01 -- Permitted Indebtedness
Schedule 6.06 -- Affiliate Transactions
Schedule 6.08 -- Certain Restrictions
Schedule I -- Consolidated EBITDA Adjustments
Schedule II -- Excluded Chicago Assets
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP
Exhibit C -- Form of Opinion of General Counsel to the Company
Exhibit D -- Form of Pledge Agreement
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TABLE OF CONTENTS
(continued)
Exhibit E -- Form of Security Agreement
Exhibit F -- Form of Term Note
Exhibit G -- Form of Officer's Certificate
Exhibit H -- Form of Intercreditor Agreement
Exhibit I -- Form of Solvency Opinion
ANNEXES
Annex I -- Financial Covenants
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AMENDED AND RESTATED TERM LOAN AND CREDIT AGREEMENT
AMENDED AND RESTATED TERM LOAN AND CREDIT AGREEMENT dated as of December
21, 2004, among RCN CORPORATION, a Delaware corporation (the "Company"), the
LENDERS party hereto, and HSBC Bank USA, National Association, as Agent and
Collateral Agent.
WHEREAS, the Company has filed a case under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Case") in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") and the Company
plans to emerge from the Bankruptcy Case pursuant to the Company's Plan of
Reorganization dated August 20, 2004 under Chapter 11 of the Bankruptcy Code (as
amended from time to time, the "Plan of Reorganization") and, pursuant thereto,
to consummate certain financings on the Effective Date as defined under the Plan
of Reorganization; and
WHEREAS, the Lenders have previously extended credit to the Company
pursuant to that certain Commercial Term Loan and Credit Agreement, dated as of
June 6, 2003, among the Company, the Lenders party thereto and HSBC Bank USA, as
Agent and Collateral Agent (as amended through the date hereof, the "Original
Credit Agreement"); and
WHEREAS, immediately before the occurrence of the Effective Date,
$34,430,883.93 of Obligations remain outstanding under the Original Credit
Agreement (the "Outstanding Indebtedness"); and
WHEREAS, the Company, the Lenders, the Agent and the Collateral Agent
desire to (i) recast the Outstanding Indebtedness as the Term Loans (as such
term is hereinafter defined) under this Agreement and (ii) to otherwise amend,
modify and restate the Original Credit Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree that the Original Credit Agreement is amended, modified and
restated in its entirety as follows:
ARTICLE I
Definitions
1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
"Acquired Entity or Business" means either (x) the assets constituting a
business, division or product line of any Person not already a Subsidiary of the
Company or (y) 100% of the Capital Stock of any such Person, which Person shall,
as a result of the respective Permitted Acquisition, become a Wholly-Owned
Domestic Restricted Subsidiary of the Company (or shall be merged with and into
the Company or a Domestic Restricted Subsidiary, with the Company or such
Domestic Restricted Subsidiary being the surviving Person).
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by such Person and not incurred in connection with, or in
anticipation of, such Person becoming a Restricted Subsidiary or such Asset
Acquisition; provided that Indebtedness of such Person which is redeemed,
defeased, retired or otherwise repaid at the time of or immediately upon
consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not constitute Acquired Indebtedness.
"Adjusted Consolidated Indebtedness" means, at any time, the amount of
Consolidated Indebtedness at such time less any amounts reflected therein
constituting Indebtedness incurred pursuant to the First-Lien Credit Documents
and the Second-Lien Note Documents.
"Adjusted Consolidated Net Income" means, for any period, Consolidated
Net Income for such period plus the sum of the amount of all net non-cash
charges (including, without limitation, depreciation, amortization, deferred tax
expense and non-cash interest expense) and net non-cash losses which were
included in arriving at Consolidated Net Income for such period, less the amount
of all net non-cash gains and non-cash credits which were included in arriving
at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" means, at any time, Consolidated
Current Assets (but excluding therefrom all cash and Cash Equivalents) less
Consolidated Current Liabilities at such time.
"Adjusted Leverage Ratio" means, at any time, the ratio of Adjusted
Consolidated Indebtedness at such time to Consolidated EBITDA for the Test
Period then most recently ended.
"Adjusted Senior financial covenant" has the meaning set forth in
Section 5.09.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliate Transaction" has the meaning set forth in Section 6.06.
"Agent" means HSBC Bank USA, National Association, in its capacity as
administrative agent and collateral agent for the Lenders hereunder.
"Agreement" means this Amended and Restated Term Loan and Credit
Agreement, together with any and all addenda, exhibits, annexes and schedules
hereto, as modified, supplemented, amended, restated (including any amendment
and restatement hereof), extended or revised from time to time.
"Annex I financial covenant" has the meaning set forth in Section 5.09.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of
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others, or otherwise) by the Company or any Restricted Subsidiary to any other
Person, or any acquisition or purchase of Capital Stock of any other Person by
the Company or any Restricted Subsidiary, in either case pursuant to which such
Person shall (a) become a Restricted Subsidiary or (b) shall be merged with or
into the Company or any Restricted Subsidiary or (ii) any acquisition by the
Company or any Restricted Subsidiary of the assets of any Person which
constitute substantially all of an operating unit or line of business of such
Person or which is otherwise outside of the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance, transfer or
lease (that has the effect of a disposition and is not for security purposes) or
other disposition (that is not for security purposes) to any Person other than
the Company or a Restricted Subsidiary, in one transaction or a series of
related transactions, of (i) any Capital Stock of any Restricted Subsidiary
(other than customary stock option programs), (ii) any assets of the Company or
any Restricted Subsidiary which constitute substantially all of an operating
unit or line of business of the Company and the Restricted Subsidiaries or (iii)
any other property or asset of the Company or any Restricted Subsidiary outside
of the ordinary course of business. For the purposes of this definition, the
term "Asset Sale" shall not include (i) any disposition of properties and assets
of the Company and/or the Restricted Subsidiaries that is governed under Section
6.03(a), (ii) sales of property or equipment that have become worn out, obsolete
or damaged or otherwise unsuitable for use in connection with the business of
the Company or any Restricted Subsidiary, as the case may be, and (iii) for
purposes of Section 6.04 any sale, conveyance, transfer, lease or other
disposition of any property or asset, whether in one transaction or a series of
related transactions occurring within one year, either (x) involving assets with
a Fair Market Value not in excess of $5,000,000 or (y) which constitutes the
incurrence of a Capitalized Lease Obligation.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04) in the form of Exhibit A or any other form approved by
the Agent.
"Assumed Indebtedness" has the meaning set forth in Section 4.01(k).
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years from such date to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness multiplied by
(b) the amount of each such principal payment by (ii) the sum of all such
principal payments; provided that, in the case of any Capitalized Lease
Obligation, all calculations hereunder shall give effect to any applicable
options to renew in favor of the Company or any Restricted Subsidiary.
"Bankruptcy Case" has the meaning assigned to such term in the preamble
to this Agreement.
"Bankruptcy Court" has the meaning assigned to such term in the preamble
to this Agreement.
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"Board of Directors" or "Board" means the Board of Directors of the
Company or a committee of such Board of Directors duly authorized to act for it
(to the extent permitted by applicable law).
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of such
certification, and delivered to the Agent.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law,
regulation or executive order to close or remain closed.
"Business Intellectual Property" has the meaning assigned to such term
in Section 3.20.
"Calculation Period" means, in the case of any Permitted Acquisition,
the Test Period most recently ended prior to the date of any such Permitted
Acquisition for which financial statements are available.
"Capital Expenditures" means, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of, such Person's capital stock, whether
outstanding on the Effective Date or issued after the Effective Date, and any
and all rights (other than any evidence of Indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed, immovable or movable) that is
required to be classified and accounted for as a capitalized lease obligation
under GAAP, and, for the purpose of this Agreement, the amount of such
obligation at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"Cash Equivalents" means, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) marketable direct obligations issued by
any state of the United States or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or ▇▇▇▇▇'▇, (iii) Dollar denominated
time deposits, certificates of deposit and bankers acceptances of any Lender or
any commercial bank having, or which is the principal banking subsidiary of a
bank holding company having, a long-term unsecured debt rating of at least "A"
or the equivalent thereof from S&P or "A2" or the equivalent thereof from
▇▇▇▇▇'▇ with maturities of
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not more than one year from the date of acquisition by such Person, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (iii) above, (v) commercial paper
issued by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇
and in each case maturing not more than one year after the date of acquisition
by such Person, and (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (v) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same has been amended and may hereafter be
amended from time to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 40% of the total
Voting Stock of the Company; or
(b) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act; or
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election by the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Charges" has the meaning assigned to such term in Section 9.13.
"Chicago Assets" means the Telecommunications Assets owned by the
Company and its Subsidiaries that are, on the Effective Date, physically located
in the Chicago, Illinois metropolitan area and utilized to provide
telecommunications services to customers of the Company or its Subsidiaries in
the Chicago, Illinois metropolitan area plus (i) such additional
Telecommunications Assets as are, after the Effective Date, acquired for such
cable systems and located in the Chicago, Illinois metropolitan area pursuant to
Capital Expenditures made in accordance with clause (a) of Annex I, (ii) related
net working capital and (iii) Equity Interests in
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Persons that own no assets other than such assets; provided, however, that
assets described in clause (1) and (2) on Schedule II hereto shall not
constitute Chicago Assets.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means the Agent acting as collateral agent for the
Lenders hereunder.
"Collateral Trigger Date" means the date that is ninety five (95) days
after the date on which there has occurred both a Discharge of First-Lien
Obligations and a Discharge of Second-Lien Obligations.
"Common Stock" means the common stock of the Company.
"Communications Act" means the Communications Act of 1934, as amended.
"Company" means RCN Corporation, a Delaware corporation.
"Confirmation Order" means the order of the Bankruptcy Court confirming
the Plan of Reorganization, which order shall be a Final Order.
"Consolidated Current Assets" means, at any time, the consolidated
current assets of the Company and its Subsidiaries at such time.
"Consolidated Current Liabilities" means, at any time, the consolidated
current liabilities of the Company and its Subsidiaries at such time, but
excluding the current portion of any Indebtedness under this Agreement and the
current portion of any other long-term Indebtedness which would otherwise be
included therein.
"Consolidated EBITDA" means:
(a) for any period prior to the Covenant Trigger Date, Consolidated
Net Income for such period, without giving effect (x) to any extraordinary gains
or any extraordinary non-cash losses (except to the extent that any such
extraordinary non-cash losses will require a cash payment in a future period)
and (y) to any gains or losses from sales of assets other than from sales of
inventory in the ordinary course of business, adjusted by (1) adding thereto (i)
the consolidated interest expense of the Company and its Restricted Subsidiaries
for such period (to the extent that such consolidated interest expense was
deducted in arriving at Consolidated Net Income for such period), (ii)
provisions for taxes based on income that were deducted in arriving at
Consolidated Net Income for such period, (iii) the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated Net
Income for such period, (iv) the amount of all expenses incurred in connection
with the Transaction for such period to the extent that same were deducted in
arriving at Consolidated Net Income for such period, (v) the amount of all
non-cash deferred compensation expense for such period to the extent that same
was deducted in arriving at the Consolidated Net Income for such period, (vi) to
the extent taken
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after the Effective Date but on or prior to June 30, 2005 and deducted in
arriving at Consolidated Net Income for such period, non-recurring fees,
expenses and charges in connection with, or contemplated by, the emergence of
the Debtors-In-Possession from a Chapter 11 proceeding under the Bankruptcy Code
and reorganization and operational restructuring resulting therefrom in an
aggregate amount not to exceed $29,600,000 and (vii) any non-cash, non-recurring
charges and any non-cash charges associated with stock-based compensation,
provided that if any cash amounts are paid in any subsequent period with respect
to amounts described above in this clause (vi), the amounts so paid in any
subsequent period shall be subtracted in determining Consolidated EBITDA for
such subsequent period as provided in clause 2(i) below, and (2) deducting
therefrom (i) the amount of all cash payments during such period that are
associated with any non-cash loss, change (including, without limitation, as
described in preceding clause (1)(vii)) or expense that was added back to
Consolidated Net Income in a previous period and (ii) the amount of all
consolidated interest income of the Company and its Restricted Subsidiaries to
the extent same increased Consolidated Net Income for such period; provided
that, for purposes of any determination of Consolidated EBITDA for the four full
fiscal quarters ended September 30, 2005, Consolidated EBITDA for such period
shall be Consolidated EBITDA for the three full fiscal quarters ended September
30, 2005 multiplied by a fraction equal to 4/3 (rounded to the nearest $1.00);
or
(b) for any period on or after the Covenant Trigger Date,
Consolidated Net Income for such period, without giving effect (x) to any
extraordinary gains or any extraordinary non-cash losses (except to the extent
that any such extraordinary non-cash losses will require a cash payment in a
future period) and (y) to any gains or losses from sales of assets other than
from sales of inventory in the ordinary course of business, adjusted by (1)
adding thereto (i) the consolidated interest expense of the Company and its
Subsidiaries for such period (to the extent that such consolidated interest
expense was deducted in arriving at Consolidated Net Income for such period),
(ii) provisions for taxes based on income that were deducted in arriving at
Consolidated Net Income for such period, (iii) the amount of all amortization of
intangibles and depreciation that were deducted in arriving at Consolidated Net
Income for such period, (iv) the amount of all expenses incurred in connection
with the Transaction for such period to the extent that same were deducted in
arriving at Consolidated Net Income for such period, (v) the amount of all
non-cash deferred compensation expense for such period to the extent that same
was deducted in arriving at the Consolidated Net Income for such period (vi) to
the extent taken after the Effective Date but on or prior to June 30, 2005 and
deducted in arriving at Consolidated Net Income for such period, non-recurring
fees, expenses and charges in connection with, or contemplated by, the emergence
of the Debtors-In-Possession from a Chapter 11 proceeding under the Bankruptcy
Code and reorganization and operational restructuring resulting therefrom in an
aggregate amount not to exceed $29,600,000 and (vii) any non-cash, non-recurring
charges and any non-cash charges associated with stock-based compensation;
provided that if any cash amounts are paid in any subsequent period with respect
to amounts described above in this clause (vii), the amounts so paid in any
subsequent period shall be subtracted in determining Consolidated EBITDA for
such subsequent period as provided in clause 2(i) below, and (2) deducting
therefrom (i) the amount of all cash payments during such period that are
associated with any non-cash loss, change (including, without limitation, as
described in preceding clause (1)(vii)) or expense that was added back to
Consolidated Net Income in a previous period and (ii) the amount of all
consolidated interest income of the Company and its Subsidiaries to the extent
same increased Consolidated Net Income for such period; it being understood that
in determining
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the Total Leverage Ratio and the Adjusted Leverage Ratio, Consolidated EBITDA
for any period shall be calculated on a Pro Forma Basis to give effect to any
Acquired Entity or Business acquired during such period pursuant to a Permitted
Acquisition, and to any Material Asset Sale effected during such period;
provided that, for purposes of any determination of Consolidated EBITDA for the
purposes of determining the Total Leverage Ratio or the Adjusted Leverage Ratio
for any Test Period ending on or prior to September 30, 2005, Consolidated
EBITDA for such Test Period shall be Consolidated EBITDA for that portion of
such Test Period occurring on and after January 1, 2005 multiplied by a fraction
the numerator of which is 365 and the denominator of which is the number of days
elapsed from January 1, 2005 to the last day of such Test Period (in each case
taken as one accounting period).
"Consolidated Indebtedness" means, at any time, the sum of (without
duplication) (i) all Indebtedness of the Company and its Subsidiaries (on a
consolidated basis) as would be required to be reflected as debt or Capital
Lease Obligations on the liability side of a consolidated balance sheet of the
Company and its Subsidiaries in accordance with GAAP, (ii) all Indebtedness of
the Company and its Subsidiaries of the type described in clauses (ii) and
(viii) of the definition of Indebtedness and (iii) all Contingent Obligations of
the Company and its Subsidiaries in respect of Indebtedness of any third Person
of the type referred to in preceding clauses (i) and (ii); provided that the sum
of the aggregate amount available to be drawn (i.e., unfunded amounts) under all
letters of credit, bankers' acceptances, bank guaranties, surety bonds and
similar obligations issued for the account of the Company or any of its
Subsidiaries (but excluding, for avoidance of doubt, all unpaid drawings or
other matured monetary obligations owing in respect of such letters of credit,
bankers' acceptances, bank guaranties, surety bonds and similar obligations)
shall not be included in any determination of "Consolidated Indebtedness".
"Consolidated Interest Coverage Ratio" means, for any period, the ratio
of Consolidated EBITDA to Consolidated Interest Expense for such period,
computed on a Pro Forma Basis.
"Consolidated Interest Expense" shall be computed in accordance with
GAAP and shall mean, for any period, the sum of (i) the total consolidated
interest expense of the Company and its Restricted Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) plus,
without duplication, that portion of Capitalized Lease Obligations of the
Company and its Restricted Subsidiaries representing the interest factor for
such period; provided that the amortization of deferred financing, legal and
accounting costs with respect to this Agreement, the First-Lien Credit Agreement
and the Second-Lien Note Indenture in each case shall be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein and (ii) the amount of dividends in respect of Disqualified
Stock paid during such period.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Restricted Subsidiary of the Company or is accounted for by the
Company by the equity method of accounting shall be included only to the extent
of the payment of cash dividends or cash distributions by such other Person to
the
- 8 -
Company or a Restricted Subsidiary thereof during such period, (ii) the net
income of any Restricted Subsidiary of the Company (other than the Company)
shall be excluded to the extent that the declaration or payment of cash
dividends or similar cash distributions by that Restricted Subsidiary of that
net income is not at the date of determination permitted by operation of its
charter or any agreement, instrument or law applicable to such Restricted
Subsidiary and (iii) the net income (or loss) of any other Person acquired by
the Company or a Restricted Subsidiary of the Company in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded.
"consolidation" means, with respect to the Company, the consolidation of
the accounts of the Restricted Subsidiaries with those of the Company all in
accordance with GAAP; provided that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary with the accounts
of the Company. The term "consolidated" has a correlative meaning to the
foregoing.
"Contingent Obligation" means, as to any Person, any obligation of such
Person as a result of such Person being a general partner of any other Person,
unless the underlying obligation is expressly made non-recourse as to such
general partner, and any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Covenant Triggering Event" means the date that is ninety-five (95) days
after the date on which there has occurred a Discharge of First-Lien Obligations
and a Discharge of Second-Lien Obligations.
"Credit Documents" means this Agreement, the Term Notes and the Security
Documents.
- 9 -
"Credit Party" means the Company and any Subsidiary Credit Party.
"DBCI" means Deutsche Bank AG Cayman Islands Branch, as Administrative
Agent under the First-Lien Credit Agreement.
"Debtors-In-Possession" means the Company and each of its Restricted
Subsidiaries which, on the Effective Date, is a debtor-in-possession pursuant to
the Bankruptcy Code.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designation" has the meaning assigned to such term in Section 6.09.
"Designation Amount" has the meaning assigned to such term in Section
6.09.
"Discharge of First-Lien Obligations" has the meaning given to it in the
Intercreditor Agreement.
"Discharge of Second-Lien Obligations" has the meaning given to it in
the Intercreditor Agreement.
"Disclosure Statement" means the Disclosure Statement, dated August 20,
2004, pursuant to Section 1125 of the Bankruptcy Code relating to the Plan of
Reorganization, as approved by the Bankruptcy Court, and as the same may be
amended, modified or supplemented from time in accordance with the terms hereof
and thereof.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company other than a director who (i) has any material direct or indirect
financial interest in or with respect to such transaction or series of related
transactions or (ii) is an employee or officer of the Company or an Affiliate
that is itself a party to such transaction or series of transactions or an
Affiliate of a party to such transaction or series of related transactions.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or becomes mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or becomes exchangeable for Indebtedness at the option
of the holder thereof, or becomes redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Maturity Date; provided such
Capital Stock shall only constitute Disqualified Stock to the extent it so
matures or becomes so redeemable or exchangeable on or prior to the Maturity
Date; provided, further, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Maturity Date shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock specifically
provides that such Person will not repurchase or redeem any such stock
- 10 -
pursuant to such provision prior to the Company's payment of the Term Loans
pursuant to Section 2.10 or the waiver of the Event of Default under Section
7.01(j) by the Required Lenders and at all times subject to 6.05 hereof.
"Documents" means the Credit Documents, the First-Lien Credit Documents,
the Second-Lien Note Documents and the Plan Documents.
"dollars" or "$" refers to lawful money of the United States of America.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary that is
organized under the laws of a state of the United States or the District of
Columbia.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions or written, binding notices
or agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, exposure to, or release or threatened release of any
Hazardous Material.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"Event of Default" has the meaning set forth in Section 7.01.
"Evergreen Investments" means Evergreen Investment Management Company,
LLC.
"Excess Cash Flow" means, for any period, the remainder of (a) the sum
of, without duplication, (i) Adjusted Consolidated Net Income for such period
and (ii) the decrease, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such
- 11 -
period, minus (b) the sum of, without duplication, (i) the aggregate amount of
all Capital Expenditures made by the Company and its Subsidiaries during such
period (other than Capital Expenditures to the extent financed with equity
proceeds, Asset Sale proceeds, insurance proceeds or Indebtedness), (ii) the
aggregate amount of all payments made in respect of all Permitted Acquisitions
consummated by the Company and its Subsidiaries during such period (other than
any such payments to the extent financed with equity proceeds, Asset Sale
proceeds, insurance proceeds or Indebtedness), (iii) the aggregate amount of
permanent principal payments of Indebtedness for borrowed money of the Company
and its Subsidiaries during such period (other than (A) repayments to the extent
made with Asset Sale proceeds, equity proceeds, insurance proceeds or
Indebtedness and (B) repayments of Term Loans, provided that repayments of Term
Loans shall be deducted in determining Excess Cash Flow to the extent such
repayments were (x) required as a result of a mandatory prepayment under Section
2.10 or (y) made as a voluntary prepayment with internally generated funds), and
(iv) the increase, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period.
"Excess Proceeds" has the meaning set forth in Section 6.04.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder, as amended from time to time.
"Excluded Taxes" means, with respect to the Agent, any Lender, a
Participant or any other recipient of any payment to be made by or on account of
any obligation of the Company hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by any
jurisdiction under the laws of which such recipient is authorized to do business
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction described in clause (a) above,
(c) taxes imposed by reason of the Agent, any Lender or any other recipient of
any payment described herein doing business in the jurisdiction imposing such
tax, other than solely as a result of the Credit Documents or any transaction
contemplated hereby and (d) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Company under Section 2.19(b)) or a
Participant that would be a Foreign Lender if it were a Lender, any withholding
tax that (i) is in effect and would apply to amounts payable to such Foreign
Lender or Participant at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or such Participant becomes a
Participant, except to the extent that such Foreign Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Company with respect to any
withholding tax pursuant to Section 2.17(a), or (ii) is attributable to such
Foreign Lender's failure to comply with Section 2.17(e) or such Participant's
failure to comply with Section 9.04(f).
"Existing Indebtedness" has the meaning set forth in Section 3.21.
"Fair Market Value" means, with respect to any asset or property, the
price that could be negotiated in an arms-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
pressure or compulsion to complete the transaction. Unless otherwise specified
in this Agreement, Fair Market Value shall be
- 12 -
determined by the Board of Directors acting in good faith and shall be evidenced
by a Board Resolution.
"FCC" means the U.S. Federal Communications Commission, or any successor
thereto.
"FCC Licenses" has the meaning set forth in Section 3.24(a).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions.
"First-Lien Administrative Agent" has the meaning given to it in the
Intercreditor Agreement.
"First-Lien Collateral Agent" has the meaning given to it in the
Intercreditor Agreement
"First-Lien Credit Agreement" has the meaning given to it in the
Intercreditor Agreement.
"First-Lien Credit Documents" has the meaning given to it in the
Intercreditor Agreement.
"First-Lien Obligations" has the meaning given to it in the
Intercreditor Agreement.
"Fixed Rate" when used in reference to any Term Loan, refers to whether
such Term Loans are bearing interest at the FX Rate.
"Foreign Lender" means any Lender that is a Foreign Person.
"Foreign Pension Plan" means each employee benefit plan, employment,
bonus, incentive, stock purchase and stock option plan, program, agreement or
arrangement; and each severance, termination pay, salary continuation,
retention, accrued leave, vacation, sick pay, sick leave, medical, life
insurance, disability, accident, profit-sharing, fringe benefit, pension,
deferred compensation or other retirement or superannuation plan, fund, program,
agreement, commitment or arrangement sponsored, established, maintained or
contributed to, or required to be contributed to, or with respect to which any
liability is borne, outside the fifty states of the United States of America, by
the Company or any of its Subsidiaries, including, without limitation, any such
plan, fund, program, agreement or arrangement sponsored by a government or
governmental entity.
"Foreign Person" means any Person that is not a "United States person"
as defined in section 7701(a)(30) of the Code.
- 13 -
"Foreign Restricted Subsidiary" means a Restricted Subsidiary that is
not a Domestic Restricted Subsidiary.
"Foreign Subsidiary" means any (a) Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia or (b) any Subsidiary that is organized
under the laws of the United States of America or any State thereof or the
District of Columbia and whose assets (directly or indirectly) consist solely of
Capital Stock of one or more Subsidiaries that are Foreign Subsidiaries (which
constitute controlled foreign corporations as defined in Section 957 of the
Code) within the meaning of clause (a) of this definition.
"FX Rate" means: (i) a rate per annum equal to 12.5% from the Effective
Date through and including March 31, 2006; and (ii) thereafter, a rate per annum
equal to 13.2%; provided, however, if the Company elects to pay the full amount
of the interest accrued for any Interest Payment Date in cash, the FX Rate shall
be deemed to be a rate per annum equal to 12.5% for such interest period.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States and which are applicable as
of the date of determination and which are consistently applied for all
applicable periods.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Governmental Authorizations" has the meaning set forth in Section
3.24(b).
"Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic materials, substances, wastes or other
pollutants or contaminants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes, in each case, which are regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit,
bankers' acceptances and
- 14 -
similar obligations issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, bankers' acceptances and similar
obligations, (iii) all Indebtedness of the types described in clause (i), (ii),
(iv), (v), (vi) or (vii) of this definition secured by any Lien on any property
owned by such Person, whether or not such Indebtedness has been assumed by such
Person (provided that, if the Person has not assumed or otherwise become liable
in respect of such Indebtedness, such Indebtedness shall be deemed to be in an
amount equal to the fair market value of the property to which such Lien relates
as determined in good faith by such Person), (iv) the aggregate amount of all
Capitalized Lease Obligations of such Person, (v) all obligations of such Person
to pay a specified purchase price for goods or services, whether or not
delivered or accepted, i.e., take-or-pay and similar obligations, (vi) all
Contingent Obligations of such Person, (vii) all obligations under any Interest
Rate Protection Agreement, any Other Hedging Agreement or under any similar type
of agreement and (viii) all Off-Balance Sheet Liabilities of such Person.
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses incurred by any Person in accordance with customary practices
and in the ordinary course of business of such Person. For purposes of Section
6.01 and Section 6.04 hereof and the definition of "Events of Default," in
determining the principal amount of any Indebtedness to be incurred by the
Company or a Restricted Subsidiary or which is outstanding at any date, the
principal amount of any Indebtedness which provides that an amount less than the
principal amount at maturity thereof shall be due upon any declaration of
acceleration thereof shall be the accreted value thereof at the date of
determination. Indebtedness of any Person that becomes a Restricted Subsidiary
shall be deemed incurred at the time that such a Person becomes a Restricted
Subsidiary. It is understood and agreed that surety bonds obtained in the
ordinary course of business (and the related reimbursement obligations to the
respective surety or sureties) for the benefit of (and which support only
obligations otherwise permitted hereunder of) the Company and the Restricted
Subsidiaries (other than RCN International) shall not be considered Indebtedness
for purposes of this definition, so long as such surety bonds do not otherwise
support any obligation that would constitute Indebtedness.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning set forth in Section 9.03.
"Independent Financial Advisor" means a United States investment
banking, consulting or accounting firm of national standing in the United States
(i) which does not, and whose directors, officers and employees or Affiliates do
not, have a material direct or indirect financial interest in the Company or any
of its Subsidiaries or Affiliates and (ii) which, in the judgment of the Board
of Directors, is otherwise independent and qualified to perform the task for
which it is to be engaged.
"Intercompany Loans" has the meaning set forth in clause (vii) of the
definition of Permitted Indebtedness.
"Intercompany Note" means a promissory note evidencing Intercompany
Loans.
"Intercreditor Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, among the Company, certain Subsidiaries of the
Company named therein, the Agent, the First-Lien Administrative Agent the
Second-Lien Administrative Agent, the Collateral Agent, the First-Lien
Collateral Agent and the Second-Lien Collateral Agent, as such
- 15 -
agreement may from time to time be amended, modified or supplemented in
accordance with its terms.
"Interest Payment Date" means the last day of each March, June,
September and December, commencing December 31, 2004.
"Interest Rate Obligations" means the obligations of any Person pursuant
to any arrangement with any other Person whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount and shall include without limitation, interest rate swaps, caps, floors,
collars, forward interest rate agreements and similar agreements.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Intertainer" means Intertainer Inc., a Delaware corporation.
"Investment" means, with respect to any Person, any advance, loan,
account receivable (other than an account receivable arising in the ordinary
course of business), or other extension of credit (including, without
limitation, by means of any guarantee) or any capital contribution to (by means
of transfers of property to others, payments for property or services for the
account or use of others, or otherwise), or any purchase or ownership of any
stocks, bonds, notes, debentures or other securities of, any other Person.
Notwithstanding the foregoing, in no event shall any issuance of Capital Stock
(other than Disqualified Stock) of the Company in exchange for Capital Stock,
property or assets of another Person constitute an Investment by the Company in
such other Person.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"License" means any license issued by the Federal Communications
Commission to the Company or any Subsidiary under the Communications Act.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim, or preference
or priority or other encumbrance upon or with respect to any property of any
kind. A Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement.
"Margin Stock" has the meaning provided in Regulation U.
"Material Adverse Effect" means (i) a material adverse effect on the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Company and its Restricted Subsidiaries taken as
a whole since December 31, 2003 (other than the commencement of the bankruptcy
cases with respect to the Debtors-In-Possession) or (ii) a
- 16 -
material adverse effect (x) on the rights or remedies of the Lenders or the
Agent or Collateral Agent hereunder or under any other Credit Document or (y) on
the ability of the Company to perform its obligations to the Lenders or the
Agent or any Collateral Agent under any other Credit Documents.
"Material Asset Sale" means any Asset Sale where the gross proceeds
received by the Company and its Restricted Subsidiaries (taking the amount of
cash and Cash Equivalents received, the principal amount of Indebtedness
received and the fair market value of all other consideration) is in excess of
$5,000,000.
"Maturity Date" means September 21, 2012.
"Maximum First-Lien Credit Documents Principal Amount" has the meaning
given to it in the Intercreditor Agreement.
"Maximum Second-Lien Principal Amount" has the meaning given to it in
the Intercreditor Agreement.
"Maximum Rate" has the meaning set forth in Section 9.13.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument which shall be, prior the date of Discharge of
First-Lien Obligations, in substantially the same form delivered under the
First-Lien Credit Agreement, and, thereafter, in a form reasonably acceptable to
the trustee under the Second-Lien Note Indenture.
"Mortgage Policy" means a mortgage title insurance policy or a binding
commitment with respect thereto.
"Mortgaged Property" means any Real Property owned or leased by the
Company or any of its Subsidiaries which is encumbered (or required to be
encumbered) by a Mortgage.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate has any actual
or contingent liability.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary or any Restricted
Affiliate) net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of legal counsel, accountants, consultants and
investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) amounts required to be paid to any
Person (other than the Company or any Restricted Subsidiary or any Restricted
Affiliate) owning a beneficial interest in or having a Permitted Lien on the
assets subject to the Asset Sale and (iv) appropriate amounts to be provided by
the Company or any
- 17 -
Restricted Subsidiary or any Restricted Affiliate, as the case may be, as a
reserve required in accordance with GAAP against any liabilities associated with
such Asset Sale and retained by the Company or any Restricted Subsidiary or any
Restricted Affiliate, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Agent.
"New York Microwave Subscribers" means certain subscribers of
telecommunication, video or broadband services delivered via microwave,
including certain wiring and equipment utilized by such subscribers, owned by
the Company and its Subsidiaries that are, on the Effective Date, physically
located in New York City and Northern New Jersey plus (i) such additional
subscribers of telecommunication, video or broadband services delivered via
microwave and related assets as are, after the Effective Date, acquired and
located in New York City and Northern New Jersey pursuant to Capital
Expenditures made in accordance with Annex I, (ii) related net working capital
and (iii) Equity Interests in Persons that own no assets other than such assets.
"Non-Wholly Owned Subsidiary" means any Subsidiary of the Company that
is not a Wholly-Owned Subsidiary of the Company.
"Notice of Plan Effective Date" means the notice from the Company
certifying that the effective date for the Plan of Reorganization has occurred.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Off-Balance Sheet Liabilities" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions that do not create a liability on the
balance sheet of such Person, (iii) any obligation under a Synthetic Lease or
(iv) any obligation arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the balance sheet of such Person.
"Original Credit Agreement" has the meaning assigned to such term in the
preamble to this Agreement.
"Original Credit Documents" means the Original Credit Agreement, any
Notes, the other Security Documents and all filings and other agreements,
instruments, documents and certificates delivered to the Agent, the Collateral
Agent or any Lenders in connection with the Original Credit Agreement.
"Other Hedging Agreement" means any foreign exchange contracts, currency
swap agreements, commodity agreements or other similar arrangements, or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"Other Senior Debt Pro Rata Share" means the amount of the applicable
Excess Proceeds obtained by multiplying the amount of such Excess Proceeds by a
fraction, (i) the
- 18 -
numerator of which is the aggregate accreted value and/or principal amount, as
the case may be, of all Indebtedness (other than (w) Term Loans, (x)
Subordinated Indebtedness, (y) First-Lien Obligations and (z) Second-Lien
Obligations) of the Company outstanding at the time of the applicable Asset Sale
with respect to which the Company is required to use Excess Proceeds to repay or
make an offer to purchase or repay and (ii) the denominator of which is the sum
of (a) the aggregate principal amount of all Term Loans outstanding at the time
of the offer to purchase or repay with respect to the applicable Asset Sale and
(b) the aggregate principal amount or the aggregate accreted value, as the case
may be, of all other Indebtedness (other than Subordinated Indebtedness, the
First-Lien Obligations and the Second-Lien Obligations) of the Company
outstanding at the time of the applicable prepayment date with respect to which
the Company is required to use the applicable Excess Proceeds to offer to repay
or make an offer to purchase or repay.
"Other Taxes" means any and all present or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Credit Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Credit
Document.
"Outstanding Indebtedness" has the meaning assigned to it in the
preamble to this Agreement.
"Participant" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition" means the acquisition by the Company or a
Domestic Restricted Subsidiary of the Company of either (x) the assets
constituting a business, division or product line of any Person not already a
Subsidiary of the Company or (y)100% of the Capital Stock of any such Person,
which Person shall, as a result of the respective Permitted Acquisition, become
a Domestic Restricted Subsidiary of the Company (or shall be merged with and
into the Company or a Domestic Restricted Subsidiary, with the Company or such
Domestic Restricted Subsidiary being the surviving Person).
"Permitted Business" has the meaning set forth in Section 6.03(b).
"Permitted Indebtedness" means the following Indebtedness (each of which
shall be given independent effect):
(a) Indebtedness under this Agreement and the other Credit
Documents;
(b) Indebtedness of the Company and/or any Restricted Subsidiary
outstanding on the Effective Date and set forth on Schedule 6.01 (which shall
not include the Indebtedness under clause (h) below, as reduced by any permanent
repayments of principal thereof), without giving effect to any subsequent
extension, renewal or refinancing thereof;
(c) (i) Indebtedness of any Restricted Subsidiary owed to and held
by the Company or a Domestic Restricted Subsidiary and (ii) Indebtedness of a
Foreign Restricted
- 19 -
Subsidiary owed to and held by another Foreign Restricted Subsidiary and (iii)
Indebtedness of the Company, not secured by any Lien, owed to and held by any
Domestic Restricted Subsidiary; provided that an incurrence of Indebtedness
shall be deemed to have occurred upon (x) any sale or other disposition
(excluding assignments as security to financial institutions) of any
Indebtedness of the Company or a Restricted Subsidiary referred to in this
clause (c) to a Person (other than the Company or a Domestic Restricted
Subsidiary) or (y) any sale or other disposition by the Company or any
Restricted Subsidiary of Capital Stock of a Restricted Subsidiary, or
Designation of an Unrestricted Subsidiary, which holds Indebtedness of the
Company or Restricted Subsidiary such that such Restricted Subsidiary, in any
such case, ceases to be a Domestic Restricted Subsidiary;
(d) Interest Rate Obligations of the Company and/or any Restricted
Subsidiary relating to Indebtedness of the Company and/or such Restricted
Subsidiary, as the case may be so long as the entering into of such Interest
Rate Obligations are bona fide hedging activities and are not for speculative
purposes;
(e) Indebtedness of the Company and/or any Restricted Subsidiary in
respect of performance bonds of the Company or any Restricted Subsidiary or
surety bonds provided by the Company or any Restricted Subsidiary incurred in
the ordinary course of business;
(f) Indebtedness of the Company and its Restricted Subsidiaries
evidenced by Capitalized Lease Obligations and purchase money Indebtedness
described in clause (vii) of the definition of Permitted Liens, provided that in
no event shall the sum of the aggregate principal amount of all Capitalized
Lease Obligations and purchase money Indebtedness permitted by this clause (iii)
exceed $25,000,000 at any time outstanding;
(g) Indebtedness of a Restricted Subsidiary of the Company acquired
pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness), provided that (x)
such Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, (y) such Indebtedness does not
constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (g) and (z) the
aggregate principal amount of all Indebtedness permitted by this clause (g)
shall not exceed $17,500,000 at any one time outstanding;
(h) Indebtedness of the Company, and guarantees thereof by the
Subsidiaries of the Company under the Second-Lien Note Indenture and the other
Second-Lien Note Documents in an aggregate principal amount not to exceed
$150,000,000 (less the amount of any repayments of principal thereof made after
the Effective Date);
(i) Indebtedness of the Company and/or any Restricted Subsidiary to
the extent it represents a replacement, renewal, refinancing or extension (a
"Refinancing") of outstanding Indebtedness of the Company and/or any Restricted
Subsidiary incurred or outstanding pursuant to clause (a), or (b), of this
definition or the proviso of Section 6.01 hereof, provided that (1) Indebtedness
of the Company may not be Refinanced to such extent under this clause (i) with
Indebtedness of any Restricted Subsidiary, and (2) any such Refinancing shall
- 20 -
only be permitted under this clause (i) to the extent that (x) it does not
result in a lower Average Life to Stated Maturity of such Indebtedness as
compared with the Indebtedness being Refinanced and (y) it does not exceed the
sum of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration of acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being Refinanced
plus the amount of accrued interest thereon and the amount of any reasonably
determined prepayment premium necessary to accomplish such Refinancing and such
reasonable fees and expenses incurred in connection therewith;
(j) Indebtedness of the Company and/or any Restricted Subsidiary
incurred under the First-Lien Credit Agreement, and any Refinancings of the
foregoing, such that the aggregate principal amount of such Indebtedness of the
Company and the Restricted Subsidiaries does not exceed, at the time of the
incurrence of such Indebtedness, the Maximum First-Lien Credit Documents
Principal Amount then in effect;
(k) guarantees by the Company of Indebtedness or operating lease
payment obligations of any Wholly Owned Domestic Restricted Subsidiary and by
any Wholly Owned Domestic Restricted Subsidiary of Indebtedness or operating
lease payment obligations of any other Wholly Owned Domestic Restricted
Subsidiary, in each case so long as the respective underlying guaranteed
Indebtedness or operating lease payment obligations are otherwise permitted in
accordance with the relevant terms of this Agreement (other than this clause
(k)); and
(l) in addition to the items referred to in clauses (a) through (k)
above, Indebtedness of the Company and/or the Restricted Subsidiaries having an
aggregate principal amount not to exceed $17,500,000 at any time outstanding.
"Permitted Investments" means Investments consisting of:
(i) accounts receivables owing to the Company or any
Restricted Subsidiary, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms of the Company or such Restricted Subsidiary;
(ii) cash and Cash Equivalents;
(iii) Investments held by the Company or any Restricted
Subsidiary on the Effective Date and described on Schedule 1.01B, provided
that any additional Investments made with respect thereto shall constitute
Permitted Investments only if permitted under the other provisions of this
definition;
(iv) Investments acquired by the Company or any Restricted
Subsidiary (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(v) loans and advances by the Company or any Restricted
Subsidiary to their officers and employees for moving, relocation and travel
expenses and other
- 21 -
similar expenditures, in each case in the ordinary course of business in an
aggregate amount not to exceed $10,500,000 at any time (determined without
regard to any write-downs or write-offs of such loans and advances);
(vi) Interest Rate Obligations of counterparties under
agreements permitted under clause (d) of the definition of "Permitted
Indebtedness";
(vii) intercompany loans and advances between and among the
Company and the Domestic Restricted Subsidiaries (collectively,
"Intercompany Loans"), provided that promissory notes evidencing such
Intercompany Loan shall be pledged to the Collateral Agent pursuant to, and
to the extent required by, the Pledge Agreement but subject to the
Intercreditor Agreement;
(viii) Permitted Acquisitions and the Starpower Acquisition;
(ix) Investments by the Company and its Restricted
Subsidiaries in Capital Stock of Subsidiaries that are Domestic Restricted
Subsidiaries both before and after such investments; provided that any such
Capital Stock held by the Company shall be pledged pursuant to the Pledge
Agreement;
(x) loans by the Company to the Employee Stock Ownership
Plan of the Company, 100% of the gross proceeds of which (without reduction
for costs, fees and expenses or other items) are immediately thereafter
utilized by such Employee Stock Ownership Plan to purchase from the Company
not more than 350,000 shares of the Company's common stock (such number of
shares to be adjusted to reflect stock splits, stock dividends, stock
combinations and similar events); and
(xi) Investments by the Company and its Subsidiaries
consisting of corporate bonds that the Company or such Subsidiary holds on
the Effective Date; provided that such bonds are sold on or prior to March
31, 2005.
"Permitted Encumbrance" means, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy delivered with
respect thereto, which exceptions prior to the date of Discharge of First-Lien
Obligations must be acceptable to the Administrative Agent under the First-Lien
Credit Agreement in its reasonable discretion.
"Permitted Liens" means:
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established in
accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of the Company or
any of its Restricted Subsidiaries imposed by law, which were incurred in
the ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics' liens
and other similar Liens arising in the ordinary course of business, and (x)
which do not in the aggregate materially detract
- 22 -
from the value of the Company's or such Restricted Subsidiary's property or
assets or materially impair the use thereof in the operation of the business
of the Company or such Restricted Subsidiary or (y) which are being
contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule 1.01A, but
only to the respective date, if any, set forth in such Schedule 1.01A for
the removal, replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set forth on such
Schedule 1.01A, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement or extension
and (y) any such renewal, replacement or extension does not encumber any
additional assets or properties of the Company or any of its Restricted
Subsidiaries;
(iv) Liens created by or pursuant to (x) the First-Lien
Credit Documents and (y) the Second-Lien Note Documents;
(v) licenses, sublicenses, leases or subleases granted to
other Persons not materially interfering with the conduct of the business of
the Company or any of its Restricted Subsidiaries;
(vi) Liens upon assets of the Company or any of its
Restricted Subsidiaries subject to Capitalized Lease Obligations to the
extent such Capitalized Lease Obligations are permitted by clause (f) of the
definition of "Permitted Indebtedness", provided that (x) such Liens only
serve to secure the payment of Indebtedness arising under such Capitalized
Lease Obligation and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any asset of the Company or
any other asset of the Company or any Restricted Subsidiary of the Company;
(vii) Liens placed upon equipment or machinery acquired after
the Effective Date and used in the ordinary course of business of the
Company or any of its Restricted Subsidiaries and placed at the time of the
acquisition thereof by the Company or such Restricted Subsidiary or within
180 days thereafter to secure Indebtedness incurred to pay all or a portion
of the purchase price thereof or to secure Indebtedness incurred solely for
the purpose of financing the acquisition of any such equipment or machinery
or extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that (x) the Indebtedness secured by such Liens
is permitted by clause (f) of the definition of "Permitted Indebtedness" and
(y) in all events, the Lien encumbering the equipment or machinery so
acquired does not encumber any other asset of the Company or of any
Restricted Subsidiary;
(viii) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with the
conduct of the business of the Company or any of its Restricted
Subsidiaries;
- 23 -
(ix) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into in the
ordinary course of business;
(x) Liens arising out of the existence of judgments or
awards in respect of which the Company or any of its Restricted Subsidiaries
shall in good faith be prosecuting an appeal or proceedings for review and
in respect of which there shall have been secured a subsisting stay of
execution pending such appeal or proceedings, provided that the aggregate
amount of all cash (including the stated amount of all letters of credit)
and the fair market value of all other property subject to such Liens does
not exceed $10,500,000 at any time outstanding;
(xi) statutory and common law landlords' liens under leases
to which the Company or any of its Restricted Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA), including
deposits, incurred in the ordinary course of business in connection with
workers compensation claims, unemployment insurance and social security
benefits and Liens securing the performance of bids, tenders, leases and
contracts in the ordinary course of business, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business and consistent with past practice (exclusive
of obligations in respect of the payment for borrowed money), provided that
the aggregate amount of all cash and the fair market value of all other
property subject to all Liens permitted by this clause (xii) shall not at
any time exceed $11,000,000;
(xiii) Permitted Encumbrances;
(xiv) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Restricted Subsidiary
of the Company in existence at the time such Restricted Subsidiary is
acquired pursuant to such an acquisition, provided that (x) any Indebtedness
that is secured by such Liens is permitted to exist under clause (g) of the
definition of "Permitted Indebtedness", and (y) such Liens are not incurred
in connection with, or in contemplation or anticipation of, such acquisition
and do not attach to any asset of the Company or any other asset of the
Company or any of its Restricted Subsidiaries;
(xv) restrictions on the transfer or pledge of assets
contained in any FCC License or imposed by the Communications Act,
comparable state or local legislation, regulations or ordinances or the
terms of cable TV franchises;
(xvi) Liens consisting of customary options, calls, puts or
restrictions on transfer relating to Capital Stock of Non-Wholly Owned
Subsidiaries and arising under joint venture arrangements with other holders
(other than the Company and its Affiliates) of such Capital Stock; and
(xvii) other Liens, so long as neither the aggregate fair
market value of all assets subject thereto, nor the aggregate amount of
Indebtedness or other obligations secured thereby, exceeds $12,500,000.
- 24 -
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PIK Amount" has the meaning set forth in Section 2.13(b)(i).
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA.
"Plan Documents" has the meaning provided in the Plan of Reorganization.
"Plan of Reorganization" has the meaning assigned to such term in the
preamble to this Agreement.
"Pledge Agreement" means the Pledge Agreement, substantially in the form
of Exhibit D, between the Company and the Agent as collateral agent for the
benefit of the Secured Creditors.
"Pledge Agreement Collateral" means all "Collateral" as defined in the
Pledge Agreement.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock whether now outstanding, or issued after
the Effective Date, and including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Pro Forma Basis" means, in connection with any calculation of
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (x) the incurrence of any
Indebtedness (other than revolving Indebtedness, except to the extent same is
incurred to refinance other outstanding Indebtedness or to finance a Permitted
Acquisition) after the first day of the relevant Calculation Period as if such
Indebtedness had been incurred (and the proceeds thereof applied) on the first
day of the relevant Calculation Period, (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness except to the extent accompanied
by a corresponding permanent commitment reduction) after the first day of the
relevant Calculation Period as if such Indebtedness had been retired or redeemed
on the first day of the relevant Calculation Period and/or (z) the Permitted
Acquisition, if any, then being consummated as well as any other Permitted
Acquisition or Material Asset Sale consummated after the first day of the
relevant Calculation Period and on or prior to the date of the respective
Permitted Acquisition then being effected, as the case may be, with the
following rules to apply in connection therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness,
except to the extent same is incurred to refinance other outstanding
Indebtedness or to finance a Permitted Acquisition) incurred or issued after
the first day of the relevant Calculation Period (whether incurred to
finance a Permitted Acquisition, to refinance Indebtedness or otherwise)
shall be deemed to have been incurred or issued (and the proceeds thereof
- 25 -
applied) on the first day of the respective Calculation Period and remain
outstanding through the date of determination and (y) (other than revolving
Indebtedness except to the extent accompanied by a corresponding permanent
commitment reduction) permanently retired or redeemed after the first day of
the relevant Calculation Period shall be deemed to have been retired or
redeemed on the first day of the respective Calculation Period and remain
retired through the date of determination;
(ii) all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x) the rate
applicable thereto, in the case of fixed rate indebtedness, or (y) at the
rate which would have been applicable thereto on the last day of the
respective Calculation Period, in the case of floating rate Indebtedness
(although interest expense with respect to any Indebtedness for periods
while same was actually outstanding during the respective period shall be
calculated using the actual rates applicable thereto while same was actually
outstanding); and
(iii) in making any determination of Consolidated EBITDA, pro
forma effect shall be given to any Permitted Acquisition or Material Asset
Sale consummated during the periods described above, with such Consolidated
EBITDA to be determined as if such Permitted Acquisition or Material Asset
Sale was consummated on the first day of the relevant Calculation Period,
taking into account, for any portion of the relevant period being tested
occurring prior to the consummation of any Permitted Acquisition or Material
Asset Sale, demonstrable cost savings actually achieved simultaneously with,
or to be achieved within a 1-year period following, the closing of the
respective Permitted Acquisition or Material Asset Sales, which cost savings
would be permitted to be recognized in pro forma financial statements
prepared in accordance with Regulation S-X under the Securities Act, as if
such cost-savings were realized on the first day of the relevant period.
"RCN International" means RCN International Holdings, Inc., a Delaware
corporation.
"Refinancing" has the meaning set forth in clause (i) of the definition
of "Permitted Indebtedness."
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, members, stockholders,
officers, employees, agents and advisors of such Person and such Person's
Affiliates.
"Related Fund" means with respect to any Lender that is a fund that
invests in bank loans in the ordinary course of business, any other fund that
invests in bank loans in the ordinary course of business and is advised or
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Replacement Assets" has the meaning set forth in Section 6.04.
- 26 -
"Required Lenders" means, at any time, Lenders having Term Loans
representing more than 50% of the sum of the total principal amount of
outstanding Term Loans at such time.
"Required Unrestricted Cash Amount" means at any time the Adjusted
Leverage Ratio (as determined from the financial statements last delivered
pursuant to Section 5.01(b) or (c), as the case may be) is within a range set
forth below, the amount of Unrestricted Cash opposite such Adjusted Leverage
Ratio Range set forth below:
Minimum Required Unrestricted
Adjusted Leverage Ratio Cash and Cash Equivalents
------------------------------------- -----------------------------
Greater than 6.50:1.00 $ 72,250,000
Greater than 5.50:1.00, but less than
or equal to 6.50:1.00 $ 68,000,000
Greater than 4.50:1.00, but less than
or equal to 5.50:1.00 $ 59,500,000
Greater than 3.50:1.00, but less than
or equal to 4.50:1.00 $ 51,000,000
Greater than 3.00:1.00, but less than
or equal to 3.50:1.00 $ 42,500,000
Greater than 2.50:1.00, but less than
or equal to 3.00:1.00 $ 21,250,000
Less than or equal to 2.50:1.00 $ 0
Notwithstanding the foregoing, prior to delivery of financial statements
pursuant to Section 5.01(b) for the fiscal quarter ended March 31, 2005, the
Adjusted Leverage Ratio shall be deemed to be greater than 6.50:1.00 (and the
Required Unrestricted Cash Amount until such time shall be $72,250,000).
"Restricted" means, when referring to cash or Cash Equivalents of the
Company or any of its Subsidiaries, that such cash or Cash Equivalents (i)
appears (or would be required to appear) as "restricted" on a consolidated
balance sheet of the Company or of any such Subsidiary, (ii) are subject to any
Lien in favor of any Person other than the Collateral Agent for the benefit of
the Secured Creditors or (iii) are not otherwise generally available for use by
the Company or any of its Subsidiaries.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Company or any payment made to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company other than dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) of
the Company or in options, warrants or other rights to purchase Capital Stock
(other than Disqualified Stock) of the Company; (ii) the purchase, redemption or
other acquisition or
- 27 -
retirement for value of any Capital Stock of the Company (other than any such
Capital Stock owned by the Company or a Wholly Owned Restricted Subsidiary);
(iii) the purchase, redemption, defeasance or other acquisition or retirement
for value prior to any scheduled repayment, sinking fund or maturity of any
Subordinated Indebtedness (other than any Subordinated Indebtedness held by the
Company or a Wholly Owned Restricted Subsidiary); or (iv) the making by the
Company or any Restricted Subsidiary of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that has not
been designated by the Board of Directors, by a Board Resolution delivered to
the Agent, as an Unrestricted Subsidiary pursuant to and in compliance with
Section 6.09 hereof. Any such designation may be revoked by a Board Resolution
delivered to the Agent, subject to the provisions of Section 6.09.
"Restricted Subsidiary Indebtedness" means Indebtedness of any
Restricted Subsidiary (i) which is not subordinated to any other Indebtedness of
such Restricted Subsidiary and (ii) in respect of which the Company is not also
obligated (by means of a guarantee or otherwise) other than, in the case of this
clause (ii), Indebtedness under the First-Lien Credit Agreement and the
Second-Lien Note Indenture.
"Returns" has the meaning set forth in Section 3.09.
"Rollover Amount" has the meaning set forth in Annex I.
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw
Hill Companies.
"San Francisco Assets" means the Telecommunications Assets owned by the
Company and its Subsidiaries that are, on the Effective Date, physically located
in the San Francisco, California metropolitan area and utilized to provide
telecommunications services to customers of the Company or its Subsidiaries in
the San Francisco, California metropolitan area plus (i) such additional
Telecommunications Assets as are, after the Effective Date, acquired for such
cable systems and located in the San Francisco, California metropolitan area
pursuant to Capital Expenditures made in accordance with clause (a) of Annex I,
(ii) related net working capital and (iii) Equity Interests in Persons that own
no assets other than such assets.
"SEC" has the meaning set forth in Section 5.01.
"Second-Lien Administrative Agent" means the "Trustee" (including in its
capacity as collateral agent under the Second-Line Note Documents) under and as
defined in the Second-Lien Note Indenture.
"Second-Lien Collateral Agent" means the "Trustee" under and as defined
in the Second-Lien Note Documents.
"Second-Lien Note Documents" has the meaning given to it in the
Intercreditor Agreement.
- 28 -
"Second-Lien Note Indenture" has the meaning given to it in the
Intercreditor Agreement.
"Second-Lien Obligations" has the meaning given to it in the
Intercreditor Agreement.
"Second Priority Lien" means the Liens that secure obligations under any
other agreements evidencing indebtedness secured by a second priority Lien on
any assets or properties of the Company.
"Secured Creditors" has the meaning given to it in the Security
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Agreement" means the Security Agreement, substantially in the
form of Exhibit E, between the Company and the Agent for the benefit of the
Secured Creditors.
"Security Agreement Collateral" means all "Collateral" as defined in the
Security Agreement.
"Security Documents" means, collectively, the Security Agreement, the
Pledge Agreement, the Intercreditor Agreement and all other security agreements,
pledges, collateral assignments or other instruments evidencing or creating any
Security Interests in favor of the Collateral Agent, for the benefit of the
Agent and the Lenders, in all or any portion of the Collateral, in each case, as
amended, modified, restated, supplemented or replaced from time to time.
"Security Interests" means the Liens on the Collateral created by the
Security Documents in favor of the Collateral Agent for the benefit of the
Lenders.
"Senior Credit Agreements" means, together, the First-Lien Credit
Agreement and the Second-Lien Note Indenture.
"Senior financial covenant" has the meaning set forth in Section 5.09.
"Senior Lenders" means the lenders under the First-Lien Credit Agreement
and the holders of the notes issued pursuant to the Second-Lien Note Indenture.
"Senior Liens" means the Liens on the Collateral granted by the Company
or the Subsidiaries of the Company to secure the payment of any First-Lien
Obligations or any Second-Lien Obligations, and all replacements, renewals and
other modifications of such Liens.
"Significant Restricted Subsidiary" means any Restricted Subsidiary (or
group of Restricted Subsidiaries) that would constitute a Significant Restricted
Subsidiary, as defined under Regulation S-X (or any successor regulation) under
the Securities Act, but substituting therein 5% for each reference to 10%.
- 29 -
"Special Default" means (a) a Default under Section 7.01(a), (b) or, to
the extent constituting a failure to make a payment, 7.01(c) or (b) any other
Event of Default.
"Starpower" means Starpower Communications, LLC, a Delaware limited
liability company.
"Starpower Acquisition" means the acquisition by the Company of the 50%
of the Capital Stock in Starpower not owned by the Company for aggregate
consideration not exceeding $32,000,000.
"Starpower Group" means Starpower and its subsidiaries.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Subsidiary of the Company which is expressly subordinated in right of payment to
any other Indebtedness of the Company or such Subsidiary of the Company.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such Person, or (ii) any other Person of which at
least a majority of voting interest is at the time, directly or indirectly,
owned by such Person. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Subsidiary Credit Party" means, following a Collateral Trigger Date,
any Wholly Owned Restricted Subsidiary that is a Significant Restricted
Subsidiary and is not a Foreign Subsidiary and that is (as of such date) a
"non-restricted Subsidiary" as such term is defined in the definition of
"Collateral Trigger Date."
"Synthetic Lease" means a lease transaction under which the parties
intend that (i) the lease will be treated as an "operating lease" by the lessee
and (ii) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Telecommunications Assets" means properties or assets utilized directly
or indirectly for the design, development, construction, installation,
operation, integration, management or provision of any telecommunications
business, including voice, video and data transmission products, services and
systems and any business reasonably related to the foregoing.
"Term Loans" means the loans made by the Lenders to the Company pursuant
to this Agreement.
"Term Note" has the meaning set forth in Section 2.08(e).
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"Test Period" means (i) for the period ended March 31, 2005, the fiscal
quarter of the Company then ended, (ii) for the period ended June 30, 2005, the
two consecutive fiscal quarters (taken as one accounting period) of the Company
then ended, (iii) for the period ended September 30, 2005, the three consecutive
fiscal quarters (taken as one accounting period) of the Company then ended and
(iv) thereafter, each period of four consecutive fiscal quarters of the Company
then last ended (in each case taken as one accounting period).
"Total Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Indebtedness at such time to Consolidated EBITDA for the Test
Period then most recently ended.
"Transaction" means, collectively, (i) the consummation of the Plan of
Reorganization, (ii) the entering into of the First-Lien Credit Documents and
the occurrence of the Credit Events thereunder on the Effective Date, (iii) the
entering into of the Second-Lien Note Documents and the issuance of all
Second-Lien Notes thereunder on the Effective Date, (iv) the entering into of
the Credit Documents and (v) the payment of all fees and expenses in connection
with the foregoing.
"Unrestricted" means, when referring to cash or Cash Equivalents of the
Company or any of its Subsidiaries, that such cash or Cash Equivalents are not
Restricted.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated
as such pursuant to and in compliance with Section 6.09 hereof. Any such
designation may be revoked by a Board Resolution delivered to the Agent, subject
to the provisions of Section 6.09.
"Voting Stock" means, with respect to any Person, the Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors or other members of the governing body of such Person.
"Wholly Owned Domestic Restricted Subsidiary" means, as to any Person,
any Wholly Owned Subsidiary of such Person which is a Restricted Subsidiary and
is incorporated or organized in the United States or any State thereof.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of
which all of the outstanding Capital Stock is owned by the Company or another
Wholly Owned Restricted Subsidiary. For the purposes of this definition, any
directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a Restricted
Subsidiary.
"Wholly Owned Subsidiary" means, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
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1.02 [Reserved].
1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
1.04 Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP as in effect from time to time; provided that, if the Company notifies
the Agent that the Company requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if (based on a
request from the Required Lenders) the Agent notifies the Company that the
Required Lenders have requested an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
2.01 Outstanding Term Loans. On the terms and subject to the
conditions hereof, each Lender agrees, on a several but not joint basis, to make
a Term Loan to the Company, in the amounts set forth on Schedule 2.01 hereto, on
the Effective Date.
2.02 [Reserved].
2.03 [Reserved].
2.04 [Reserved].
2.05 [Reserved].
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2.06 [Reserved].
2.07 [Reserved].
2.08 Repayment of Term Loans; Evidence of Debt.
(a) The Company hereby unconditionally promises to pay to the Agent
for the account of each Lender the then unpaid principal amount of each Term
Loan of such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Term Loan made by Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Agent shall maintain accounts in which it shall record (i)
the amount of each Term Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Company to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall conclusively establish the existence
and amounts of the obligations recorded therein, absent manifest error; provided
that the failure of any Lender or the Agent to maintain such accounts or any
error therein shall not in any manner affect the obligations of the Company to
repay the Term Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Term Loans made by it be evidenced
by a promissory note. In such event, the Company shall prepare, execute and
deliver to such Lender a promissory note payable to such Lender (or, if
requested by such Lender, to such Lender or its registered assigns) and in the
form of Exhibit F hereto (each a "Term Note" and, collectively, the "Term
Notes"). Thereafter, the Term Loans evidenced by such Term Note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more Term Notes in such form payable to the payee named
therein (or, if such Term Note is a registered note, to such payee and its
registered assigns).
2.09 Repayment of Term Loans. The Company shall repay the outstanding
principal balance of the Term Loans plus all accrued and unpaid interest
thereon, on the Maturity Date.
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2.10 Prepayment of Term Loans.
(a) The Company may prepay any of the Term Loans under this Section
2.10(a), in whole or in part, to the extent permitted by the Senior Credit
Agreements and subject to the requirements of this Section, provided that the
Company shall at the time of such prepayment pay to the Agent, for the pro rata
account of each Lender, the following amounts:
(i) if such prepayment is made after the Effective Date but
before the second anniversary thereof, 100% of the then principal amount of
the Term Loan, plus all accrued and unpaid interest;
(ii) if such prepayment is made on or after the second
anniversary of the Effective Date but before the third anniversary thereof,
103% of the then principal amount of the Term Loan, plus all accrued and
unpaid interest;
(iii) if such prepayment is made on or after the third
anniversary of the Effective Date but before the fourth anniversary thereof,
102% of the then principal amount of the Term Loan, plus all accrued and
unpaid interest;
(iv) if such prepayment is made on or after the fourth
anniversary of the Effective Date but before the fifth anniversary thereof,
101% of the principal amount of the Term Loan, plus all accrued and unpaid
interest; or
(v) if such prepayment is made on or after the fifth
anniversary of the Effective Date but before the Maturity Date, 100% of the
then principal amount of the Term Loan, plus all accrued and unpaid
interest.
(b) Following the end of each fiscal year of the Company, commencing
at the end of the fiscal year in which all amounts outstanding under the Senior
Credit Agreements have been paid in full, the Company shall prepay Term Loans in
an aggregate amount equal to 50% of Excess Cash Flow for such fiscal year;
provided that any Lender may waive the right to receive the amount of such
mandatory prepayment and such amount shall be applied to the other Term Loans
being repaid pro rata. Each prepayment pursuant to this paragraph shall be made
without any premium or penalty of any kind and shall be made on or before the
date on which financial statements are delivered pursuant to Section 5.01 with
respect to the fiscal year for which Excess Cash Flow is being calculated (and
in any event within 90 days after the end of such fiscal year).
(c) In the event of the receipt by the Company of Excess Proceeds
that are not used to repay the First-Lien Obligations and/or the Second-Lien
Obligations, the Company shall prepay the Term Loans on the next Business Day in
an amount equal to such proceeds not so used, to the extent permitted by the
Senior Credit Agreements and subject to the requirements of this Section.
(d) Prior to any optional or mandatory prepayment of Term Loans
pursuant to this Section, the Company shall select the Term Loans to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section provided that all Term Loans shall be paid pro
rata.
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(e) The Company shall notify the Agent in writing of any prepayment
hereunder not later than 11:00 a.m., New York City time, one Business Day before
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of the Term Loans or portion thereof
to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment. Promptly following receipt of any
such notice, the Agent shall advise the Lenders of the contents thereof. Each
prepayment of the Term Loans shall be applied ratably to the Term Loans.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.13 and provided further that no prepayment of Term Loans need be made
under this paragraph (e) until the aggregate amount of Net Cash Proceeds
received in respect of which prepayments are otherwise required to be made
equals or exceeds $5,000,000, at which time a prepayment shall be made in an
aggregate amount equal to all such Net Cash Proceeds in respect of which no such
prepayment has yet been made.
2.11 [Reserved].
2.12 Fees.
(a) The Company agrees to pay to the Agent and each Lender, in each
case for such Person's own account, fees and other consideration payable in the
amounts and at the times separately agreed upon between the Company and the
Agent or such Lender, respectively.
(b) Except as set forth in any agreement referred to in clause (a)
above, all fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, in the case of participation
fees, to the Lenders entitled thereto. Fees paid shall not be refundable under
any circumstances unless paid in the absence of an obligation to pay such fee.
2.13 Interest.
(a) The Term Loans shall accrue interest at the FX Rate.
(b) (i) From the Effective Date through and including March 31,
2006, the interest accrued to any Interest Payment Date shall be capitalized and
added to the principal amount of the Term Loans (such accrued interest, the "PIK
Amount") and no interest for such period shall be paid in cash. From and after
each Interest Payment Date, the principal amount of Term Loan shall, without
further action on the part of the Company or the Lenders, be deemed to be
increased by the PIK Amount so capitalized and added to the principal in
accordance with the provisions hereof.
(ii) From and after April 1, 2006 through the Maturity Date,
accrued interest shall be payable on each Interest Payment Date as follows: (i)
interest at a rate of 6.25% per annum shall be paid in cash, and (ii) interest
at a rate of 6.95% per annum shall be capitalized as a PIK Amount and the
principal amount of the Term Loan shall, without further action on the part of
the Company or the Lenders, be deemed to be increased by the PIK Amount so
capitalized and added to the principal in accordance with the provisions hereof;
provided, that, for any Interest Payment Date, the Company may elect to pay in
cash the full amount of the
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interest accrued for that interest period, in which case interest shall be
deemed to have accrued at a rate per annum of 12.5% for such period.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Term Loan or any fee or other amount payable by the Company hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to 2% plus the applicable FX Rate.
(d) Accrued interest on each Term Loan shall be payable in arrears
on each Interest Payment Date for such Term Loan; provided that, (i) in
accordance with Section 2.13(b)(i), the Term Loans will not accrue cash interest
prior to ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) interest accrued pursuant to paragraph (c) of this
Section shall be payable on demand, and (iii) in the event of any repayment or
prepayment of any Term Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
2.14 [Reserved].
2.15 Increased Costs.
(a) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, as
a consequence of this Agreement or the Term Loans made by such Lender, to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(b) A certificate of a Lender setting forth in reasonable detail the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) of this Section and the
determination thereof shall be delivered to the Company and shall be conclusive
absent demonstrable error. The Company shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
(c) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Company shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 270 days prior to the date that such
Lender notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the
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270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
2.16 [Reserved].
2.17 Taxes.
(a) Any and all payments by or on account of any obligation of the
Company or any Subsidiary hereunder or under any other Credit Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Company or any Subsidiary shall be required by law
or regulation to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Agent or Lender(as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Company or such Subsidiary shall make such deductions and (iii) the
Company or any Subsidiary, as the case may be, shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Company and any Subsidiary shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) The Company and any Subsidiary Credit Party shall, jointly and
severally, indemnify the Agent and each Lender within 15 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
required to be paid by the Agent or such Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of the Company or any
Subsidiary hereunder or under any other Credit Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section), and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. After the Agent or such Lender learns of the imposition
of such Indemnified Taxes or Other Taxes, such party will act in good faith to
promptly notify the Company of its obligations thereunder. A certificate setting
forth in reasonable detail the amount of such payment or liability and the
determination thereof delivered to the Company by a Lender or by the Agent on
its own behalf or on behalf of a Lender, shall be conclusive absent demonstrable
error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company or any Subsidiary to a Governmental Authority, the
Company shall deliver to the Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent and the Required Lenders.
(e) Each Lender that is a Foreign Person and that is entitled to an
exemption from or reduction of withholding tax with respect to payments under
any Credit Document shall deliver to the Company (with a copy to the Agent, as
applicable), at the time(s) prescribed by applicable law or reasonably requested
by the Company (or the Agent, as applicable), such
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properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Company as will permit such payments to be made
without withholding or at a reduced rate of withholding. Each Lender and Agent
that is a United States person, as defined in section 7701(a)(30) of the Code
(other than a Person that the Company may treat as an "exempt recipient"
pursuant to Treasury Regulations section 1.6049-4(c)), shall deliver at the
time(s) and in the manner(s) prescribed by applicable law or reasonably
requested by the Company (or the Agent, as applicable), properly completed and
duly executed United States Internal Revenue Form W-9 or any successor form,
certifying that such Person is exempt from United States backup withholding tax
on payments made under the Credit Documents. Notwithstanding any other provision
of this Section 2.17(e), each such Lender shall not be required to deliver any
form pursuant to this Section 2.17(e) that such Lender is not legally able to
deliver (i) at the time such Lender becomes a party to this Agreement or (ii) to
the extent that such failure is due to a change in treaty, law, regulation or
any action by the Company occurring subsequent to the date on which such form
originally was required to be provided pursuant to this Section 2.17(e).
(f) If any Foreign Lender or Participant receives a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Company or with
respect to which the Company has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Company (but only to the
extent of indemnity payments made, or additional amounts paid, by the Company
under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Foreign Lender without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, however, that the Company, upon the
request of such Foreign Lender, agrees to repay the amount paid over to the
Company pursuant to this Section 2.17(f) (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Foreign Lender in
the event such Foreign Lender is required to repay such refund to such
Governmental Authority. Nothing contained in this Section 2.17(f) shall require
any Lender to make available its tax returns (or any other information relating
to its taxes which it deems confidential) to the Company or any other Person.
2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Company shall make each payment required to be made by it
hereunder or under any other Credit Document (whether of principal, interest, or
fees, or of amounts payable under Section 2.15 or 2.17, or otherwise) prior to
the time expressly required hereunder or under such other Credit Document for
such payment (or, if no such time is expressly required, prior to 1:00 p.m., New
York City time), on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date shall
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the Agent,
except that payments pursuant to Sections 2.15, 2.17 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Credit
Documents shall be made to the Persons specified therein. The Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. Notwithstanding
the foregoing, in no event shall the issuance of any warrants or other right to
acquire any such Capital Stock of the Company to any Lender or any payment or
proceeds resulting from such issuance constitute a payment which shall be
subject to distribution amongst
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any other Lenders pursuant to this Section 2.18(a). If any payment under any
Credit Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Credit Document shall be made
in dollars.
(b) If at any time insufficient funds are received by and available
to the Agent to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Term Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Term Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Term Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Term Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Company pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Term Loans to any
assignee or participant, other than to the Company or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Company consents to the foregoing and agrees, to the extent they may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Company's rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Company in the amount
of such participation.
(d) Unless the Agent shall have received written notice from the
Company prior to the date on which any payment is due to the Agent for the
account of the Lenders hereunder that the Company will not make such payment,
the Agent may assume that the Company has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders the amount due. In such event, if the Company has not in fact made such
payment, then each of the Lenders severally agrees to repay to the Agent
forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Agent, at the Federal Funds
Effective Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.18(d) or 9.03(c), then the Agent shall
(notwithstanding any contrary provision hereof) apply any amounts thereafter
received by the Agent for the account of such
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Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
2.19 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if
the Company is required to pay any additional amount to (or for the benefit of)
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for booking its Term Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Company hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Company is required to pay any additional amount to (or for the benefit of)
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.17, then the Company may, at its sole expense and effort, upon
notice to such Lender and the Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that such Lender shall
have received payment of an amount equal to the outstanding principal of its
Term Loans, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder or pursuant to any other Credit Document, from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Company (in the case of all other amounts). A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
In order to induce the Lenders to enter into this Agreement and to make
the Term Loans, the Company makes the following representations, warranties and
agreements, in each case after giving effect to the Transaction, all of which
shall survive the execution and delivery of this Agreement and the Term Notes
and the making of the Term Loans on or after the Effective Date being deemed to
constitute a representation and warranty that the matters specified in this
Article III are true and correct in all material respects on and as of the
Effective Date (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
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3.01 Organizational Status. The Company and each of its Subsidiaries
(i) is a duly organized and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate, partnership or limited
liability company power and authority, as the case may be, to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
3.02 Power and Authority. The Company has the corporate power and
authority to execute, deliver and perform the terms and provisions of each of
the Credit Documents and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such Credit Documents.
The Company has duly executed and delivered each of the Credit Documents, and
each of such Credit Documents constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
3.03 No Violation. Neither the execution, delivery or performance by
the Company of the Credit Documents, nor compliance by it with the terms and
provisions thereof, (i) will contravene any provision of any law, statute, rule
or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality or the terms of any FCC License or other
Governmental Authorization, (ii) will conflict with or result in any breach of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except pursuant to the Security Documents, the
First-Lien Credit Documents and the Second-Lien Note Documents) upon any of the
property or assets of the Company or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust or credit agreement, or any
other material agreement, contract or instrument, in each case to which the
Company or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject, except for such
conflicts, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect or (iii) will violate any provision of
the certificate or articles of incorporation, certificate of formation, limited
liability company agreement or by-laws (or equivalent organizational documents),
as applicable, of the Company or any of its Subsidiaries.
3.04 Approvals. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except for (w)
those that have otherwise been obtained or made on or prior to the Effective
Date and which remain in full force and effect on the Effective Date, (x)
filings which are necessary to perfect the security interests created under the
Security Documents, which filings shall have been made (or will be made within
ten (10) days of the Effective Date), (y) filings which are necessary to perfect
the security interests created under the First-Lien Credit Documents, which
filings will be made prior to the filings described in clause (x) and (z) and
within ten (10) days following the Effective Date, and (z) filings which are
necessary to perfect the security interests created under the Second-Lien
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Security Documents, which filings will be made prior to the filings described in
clause (x) and within ten (10) days following the Effective Date, or exemption
by, any governmental or public body or authority, or any subdivision thereof, is
required to be obtained or made by, or on behalf of, the Company to authorize,
or is required to be obtained or made by, or on behalf of, the Company in
connection with, (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
such Credit Document.
3.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections.
(a) The consolidated balance sheets of the Company and its
Subsidiaries as at December 31, 2001, December 31, 2002, December 31, 2003,
March 31, 2004, June 30, 2004 and September 30, 2004, and the related
consolidated statements of income, cash flows and retained earnings of the
Company for the fiscal years ended December 31, 2001, 2002 and 2003 and the six
and nine-month periods ended June 30, 2004 and September 30, 2004, copies of
which have been made available to the Lenders prior to the Effective Date,
present fairly in all material respects the consolidated financial position of
the Company at the dates of such balance sheets and the consolidated results of
the operations of the Company for the periods covered thereby. All of the
foregoing historical financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied (except, in the
case of the aforementioned quarterly or monthly financial statements, for normal
year-end audit adjustments and the absence of footnotes).
(b) Except as fully disclosed in the financial statements made
available pursuant to Section 3.05(a) there were as of the Effective Date no
liabilities or obligations with respect to the Company or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, could reasonably be expected to be material to the Company or any of
its Subsidiaries. As of the Effective Date, the Company knows of no basis for
the assertion against it or any of its Subsidiaries of any liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements made available pursuant to Section 3.05(a) or referred to in the
immediately preceding sentence which, either individually or in the aggregate,
could reasonably be expected to be material to the Company or any of its
Subsidiaries.
(c) Since December 31, 2003, there have been no changes, events
and/or occurrences that have had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
3.06 Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened (i) with respect to the
Transaction or any Credit Document or (ii) that could reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect.
3.07 True and Complete Disclosure. All factual information (taken as
a whole) furnished by or on behalf of the Company in writing to the Agent or any
Lender (including, without limitation, all information contained in the Credit
Documents) for purposes of or in
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connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of the Company in writing to the
Agent or any Lender will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
3.08 Use of Proceeds.
(a) All proceeds of the Term Loans will be used by the Company to
finance, in part, the Transaction and to pay the fees and expenses relating to
the Transaction.
(b) No part of the proceeds of any Term Loan will be used to
purchase or carry any Margin Stock. Neither the making of any Term Loan, nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
3.09 Tax Returns and Payments. The Company and each of its
Subsidiaries has timely filed or caused to be timely filed with the appropriate
taxing authority all federal income tax and other material returns, statements,
forms and reports for taxes (the "Returns") required to be filed by, or with
respect to the income, properties or operations of, the Company and/or any of
its Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of the Company and its Subsidiaries for the periods covered
thereby. The Company and each of its Subsidiaries has paid all taxes and
assessments payable by it which have become due, other than (i) those that are
immaterial, (ii) those being contested in good faith and adequately disclosed
and fully provided for on the financial statements of the Company and its
Subsidiaries in accordance with GAAP, (iii) those discharged pursuant to the
Plan of Reorganization and (iv) those payable over time pursuant to the Plan of
Reorganization (which taxes and assessments, in the case of this clause (iv) and
to the extent due in accordance with the Plan of Reorganization, have been paid
in all material respects in accordance with the terms of the Plan of
Reorganization). Except as set forth on Schedule 3.09, there is no action, suit,
proceeding, investigation, audit or claim now pending or, to the best knowledge
of the Company, threatened by any authority regarding any taxes relating to the
Company or any of its Subsidiaries. Except as provided on Schedule 3.09, as of
the Effective Date, neither the Company nor any of its Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Company or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Company or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Company nor any of its
Subsidiaries has incurred, nor will any of them incur, any material tax
liability in connection with the Transaction or any other transactions
contemplated hereby (it being understood that the representation contained in
this sentence does not cover any future tax liabilities of the Company or any of
its Subsidiaries arising as a result of the operation of their businesses in the
ordinary course of business).
3.10 Compliance with ERISA. Schedule 3.10 sets forth, as of the
Effective Date, the name of each Plan. Each Plan (and each related trust) is in
substantial compliance with
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its terms and with all applicable laws, including, without limitation, ERISA and
the Code; each Plan (and each related trust, if any) which is intended to be
qualified under Section 401(a) of the Code has received or timely applied for a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code within the
preceding six years; neither the Company nor any of its Subsidiaries or ERISA
Affiliates has ever maintained or contributed to, or had any obligation to
maintain or contribute to (or borne any liability with respect to) any "employee
pension benefit plan," within the meaning of Section 3(2) of ERISA, that is a
"multiemployer plan," within the meaning of Section 3(37) of ERISA, or that is
subject to the minimum funding standards of Section 412 of the Code or Section
302 of ERISA or subject to Title IV of ERISA; neither the Company nor any of its
Subsidiaries or ERISA Affiliates has any obligation to maintain or contribute to
(or borne any liability with respect to) any Foreign Pension Plan; all
contributions required to be made with respect to a Plan have been timely made;
neither the Company nor any Restricted Subsidiary of the Company nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4204 or 4212 of ERISA or Section 4975 of the
Code or expects to incur any such liability under any of the foregoing sections
with respect to any Plan; no condition exists which presents a material risk to
the Company or any Restricted Subsidiary of the Company or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, expected
or, to the knowledge of the Company, threatened; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which
covers or has covered employees or former employees of the Company, any
Restricted Subsidiary of the Company, or any ERISA Affiliate has at all times
been operated in compliance with the provisions of Part 6 of subtitle B of Title
I of ERISA and Section 4980B of the Code, except to the extent that any failure
to comply could not reasonably be expected to result in a material liability to
the Company or any of its Subsidiaries; each group health plan (as defined in 45
Code of Federal Regulations Section 160.103) which covers or has covered
employees or former employees of the Company, any Restricted Subsidiary of the
Company, or any ERISA Affiliate has at all times been operated in compliance
with the provisions of the Health Insurance Portability and Accountability Act
of 1996 and the regulations promulgated thereunder, except to the extent that
any failure to comply could not reasonably be expected to result in a material
liability to the Company or any of its Subsidiaries; no lien imposed under the
Code or ERISA on the assets of the Company or any Restricted Subsidiary of the
Company or any ERISA Affiliate exists or is likely to arise on account of any
Plan; and the Company and its Subsidiaries may cease contributions to or
terminate any employee benefit plan maintained by any of them without incurring
any material liability.
3.11 The Security Documents.
(a) The provisions of the Security Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Secured Creditors, a
legal, valid and enforceable security interest in all right, title and interest
of the Company in the Security Agreement Collateral described therein, and the
Collateral Agent, for the benefit of the Secured Creditors, has (or will have
within ten (10) days of the Effective Date) a fully perfected security interest
in
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all right, title and interest in all of the Security Agreement Collateral
described therein, subject to no other Liens other than Permitted Liens.
(b) The security interests created under the Pledge Agreement in
favor of the Collateral Agent, as Pledgee, for the benefit of the Secured
Creditors, constitute perfected security interests in the Pledge Agreement
Collateral described in the Pledge Agreement, subject to no security interests
of any other Person (other than the Senior Lenders). No filings or recordings
are required in order to perfect (or maintain the perfection or priority of) the
security interests created in the Pledge Agreement Collateral under the Pledge
Agreement other than with respect to that portion of the Pledge Agreement
Collateral constituting a "general intangible" under the UCC.
3.12 Properties. All Real Property having a fair market value, as
reasonably estimated by the Company, in excess of $1,000,000 that is owned by
the Company or any of its Subsidiaries as of the Effective Date, and the nature
of the interest therein, is correctly set forth in Schedule 3.12. Each of the
Company and each of its Subsidiaries has good and indefeasible title to all
material properties owned by it, including all material property reflected in
the most recent historical balance sheets referred to in Section 3.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or as permitted by the terms of this Agreement),
free and clear of all Liens, other than Permitted Liens.
3.13 Capitalization. On the Effective Date, the authorized capital
stock of the Company consists of 100,000,000 shares of common stock, $0.01 par
value, of which 36,020,850 shares are issued and outstanding. All outstanding
shares of capital stock of the Company have been duly and validly issued and are
fully paid and non-assessable.
3.14 Subsidiaries. On and as of the Effective Date and after giving
effect to the Transaction, the Company has no Subsidiaries other than those
Subsidiaries listed on Schedule 3.14. Schedule 3.14 correctly sets forth, as of
the Effective Date and after giving effect to the Transaction, (i) the
percentage ownership (direct and indirect) of the Company in each class of
capital stock or other Capital Stock of each of its Subsidiaries and also
identifies the direct owner thereof and (ii) the jurisdiction of organization of
each such Subsidiary. All outstanding shares of capital stock or other Capital
Stock of each Subsidiary have been duly and validly issued, are fully paid and
non-assessable and have been issued free of preemptive rights. On the Effective
Date and after giving effect to the Transaction, except as set forth on Schedule
3.14, no Subsidiary of the Company has outstanding any securities convertible
into or exchangeable for its capital stock or other Capital Stock or outstanding
any right to subscribe for or to purchase, or any options or warrants for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of or any calls, commitments or claims of any character relating to,
its capital stock or other Capital Stock or any stock appreciation or similar
rights.
3.15 Compliance with Statutes. The Company and each of its
Subsidiaries is in compliance with all applicable laws, statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business, the
holding of the FCC Licenses and the other Governmental Authorizations and the
ownership of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such non-
- 45 -
compliances as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.16 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
3.17 Public Utility Holdings Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holdings Company Act of 1935, as amended.
3.18 Environmental Matters. (a) The Company and each of its
Subsidiaries is in compliance with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the knowledge of the Company, threatened Environmental Claims
against the Company or any of its Subsidiaries or any Real Property owned,
leased or operated by the Company or any of its Subsidiaries (including, to the
Company's knowledge, any such claim arising out of the ownership, lease or
operation by the Company or any of its Subsidiaries of any Real Property
formerly owned, leased or operated by the Company or any of its Subsidiaries but
no longer owned, leased or operated by the Company or any of its Subsidiaries).
There are no facts, circumstances, conditions or occurrences with respect to the
business or operations of the Company or any of its Subsidiaries, or any Real
Property owned, leased or operated by the Company or any of its Subsidiaries
(including, to the Company's knowledge, any Real Property formerly owned, leased
or operated by the Company or any of its Subsidiaries but no longer owned,
leased or operated by the Company or any of its Subsidiaries) or, to the
knowledge of the Company, any property adjoining or adjacent to any such Real
Property that could be reasonably expected (i) to form the basis of an
Environmental Claim against the Company or any of its Subsidiaries or any Real
Property owned, leased or operated by the Company or any of its Subsidiaries or
(ii) to cause any Real Property owned, leased or operated by the Company or any
of its Subsidiaries to be subject to any restrictions on the ownership, lease,
occupancy or transferability of such Real Property by the Company or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, or Released on or from, any
Real Property owned, leased or operated by the Company or any of its
Subsidiaries or, to the knowledge of the Company, any property adjoining or
adjacent to any Real Property, where such generation, use, treatment, storage,
transportation or Release has violated or could be reasonably expected to
violate any applicable Environmental Law or give rise to an Environmental Claim.
(c) Notwithstanding anything to the contrary in this Section 3.18,
the representations and warranties made in this Section 3.18 shall be untrue
only if the effect of any or all conditions, violations, claims, restrictions,
failures and noncompliances of the types described above could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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3.19 Labor Relations. Neither the Company nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against the Company or
any of its Subsidiaries or, to the knowledge of the Company, threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or any of its Subsidiaries or, to
the knowledge of the Company, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries and (iii) no union representation question exists
with respect to the employees of the Company or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.
3.20 Intellectual Property, etc. The Company and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, permits,
domain names, service marks, trade names, copyrights, licenses, franchises,
inventions, trade secrets, proprietary information and know-how of any type,
whether or not written (including, but not limited to, rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
necessary for the conduct of its business (the "Business Intellectual Property")
without any known conflict with the rights of others arising from the Company's
or its Subsidiaries' use of the Business Intellectual Property which, or the
failure to obtain which, as the case may be, could reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect.
3.21 Indebtedness. Schedule 3.21 sets forth a true and complete list
of all Indebtedness (including Contingent Obligations) of the Company and its
Subsidiaries as of the Effective Date (excluding the Term Loans and the
Indebtedness incurred pursuant to the First-Lien Credit Agreement and the
Second-Lien Note Indenture) (the "Existing Indebtedness") which is to remain
outstanding after giving effect to the Transaction, in each case showing the
aggregate principal amount thereof and the name of the respective Company or any
of its Subsidiaries which directly or indirectly guarantees such debt.
3.22 Insurance. Schedule 3.22 sets forth a true and complete listing
of all insurance maintained by the Company and its Subsidiaries as of the
Effective Date, with the amounts insured (and any deductibles) set forth
therein.
3.23 Representations and Warranties in Other Documents. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Effective Date as if such representations or
warranties were made on and as of such date (it being understood and agreed that
any such representation or warranty which by its terms is made as of a specified
date shall be true and correct in all material respects as of such specified
date).
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3.24 FCC Licenses and Other Governmental Authorizations.
(a) The Company and its Subsidiaries hold all FCC licenses,
registrations and authorizations as are necessary to the Company's and its
Subsidiaries' businesses (collectively, the "FCC Licenses"). Each of the FCC
Licenses that is material to the business of the Company or any of its
Subsidiaries has been validly issued and is in full force and effect. All FCC
Licenses in effect on the Effective Date and their respective expiration dates
are listed and described on Schedule 3.24. The Company has no knowledge of any
condition imposed by the FCC as part of any FCC License which is neither set
forth on the face thereof as issued by the FCC nor contained in the policies,
rules and regulations of the FCC applicable generally to business of the type,
nature, class or location of the Company and its Subsidiaries. The Company and
its Subsidiaries are in compliance in all material respects with the terms and
conditions of the FCC Licenses applicable to it and with applicable policies,
rules and regulations of the FCC and the Communications Act, except to the
extent that any failure to comply would not result in a Material Adverse Effect.
No proceedings are pending or are, to the knowledge of the Company, threatened
which may reasonably be expected to result in the revocation, rescission,
modification, non-renewal or suspension of any FCC License that is material to
the business of the Company or any of its Subsidiaries, the denial of any
pending applications, the issuance of any cease and desist order or the
imposition of any fines, forfeitures or other administrative actions by the FCC
with respect to the Company or any of its Subsidiaries that would, if such
proceedings were decided adversely to the Company or the Subsidiaries, have a
Material Adverse Effect. All material reports, applications, tariffs and other
documents required to be filed by the Company or any of its Subsidiaries, as
appropriate, with the FCC have in all material respects been timely filed and
all such reports, applications, tariffs and documents are true, correct and
complete in all material respects. To the knowledge of the Company, there are no
unsatisfied or otherwise outstanding citations, complaint proceedings, notices
of liability or notices of forfeiture issued by the FCC and received by the
Company or a Restricted Subsidiary thereof with respect to the Company or any of
its Subsidiaries or any of their respective operations.
(b) In addition to the FCC Licenses issued by the FCC, the Company
and its Subsidiaries hold all material licenses, certificates, registrations and
authorizations issued by any other governmental entity (domestic and foreign)
necessary to operate their respective businesses for each line of business of
the Company or any of its Subsidiaries requiring such authorization and in each
jurisdiction in which Company or any of its Subsidiaries may be deemed to be
conducting their respective businesses under applicable law (collectively, the
"Governmental Authorizations"). Each of the Governmental Authorizations has been
validly issued and is in full force and effect. The Governmental Authorizations
as of the Effective Date are listed on Schedule 3.24, with any expiration date
for any such authorization identified on Schedule 3.24, with authorizations
issued by state public service or utility commissions (or analogous state
authorities) listed on Schedule 3.24 and other Governmental Authorizations
listed on Schedule 3.24. None of the Governmental Authorizations contain any
conditions or limitations outside the normal course that would materially and
adversely restrict the operations of the Company or any of its Subsidiaries. The
Company and its Subsidiaries have been and are in compliance in all respects
with the terms and conditions of the Governmental Authorizations applicable to
them, except to the extent that any failure to comply would not result in a
Material Adverse Effect. Other than the proceedings of a general nature, no
proceedings are pending or are, to the knowledge of the Company, threatened,
and, to the Company's knowledge, no event has occurred, which may reasonably be
expected to result in the revocation, rescission, adverse
- 48 -
modification, non-renewal or suspension of any Governmental Authorization that
is material to the business of the Company or any of its Subsidiaries, the
denial of any pending applications therefor, the issuance of any cease and
desist order, or the imposition of any material fines, forfeitures, or other
administrative actions by a governmental entity. All material reports,
applications, tariffs and other documents required to be filed by the Company or
any of its Subsidiaries, as appropriate, with the governmental entity issuing a
Government Authorization have in all material respects been timely filed, and
all such reports, applications, tariffs and documents are true, correct and
complete in all material respects. To the knowledge of the Company, there are no
material unsatisfied or otherwise outstanding citations issued by any
governmental entity and received by the Company or a Restricted Subsidiary
thereof with respect to the Company or any of its Subsidiaries. Schedule 3.24
separately lists all pending applications for certificates or other
authorizations from any state public service or utility commission (or analogous
state authority).
(c) The transactions contemplated herein, under applicable law
(including the Communications Act) and the applicable policies, rules,
regulations and practices of the FCC and other governmental entities, would not
disqualify the Company or any of its Subsidiaries as an assignee or transferee
of the FCC Licenses or the Governmental Authorizations or result in the
imposition of any materially adverse condition on or modification of the FCC
Licenses or the Governmental Authorizations.
3.25 Intercreditor Agreement. Assuming that the Intercreditor
Agreement has been duly authorized, executed and delivered by the parties
thereto (other than the Company and its Subsidiaries), the Intercreditor
Agreement is enforceable against the parties thereto (and the Creditors as
defined therein) in accordance with its terms.
3.26 Certain Agreements.
(a) Neither the Company nor any of its Subsidiaries is a party to
any agreement or instrument or subject to any corporate, partnership or limited
liability company restriction, as the case may be, that, either individually or
in the aggregate, has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, if such default, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
3.27 Event of Default. No event has occurred or is continuing which
constitutes, or with notice or lapse of time could constitute, an Event of
Default.
ARTICLE IV
Conditions
4.01 Effective Date. On the Effective Date, the following conditions
shall have been satisfied (or waived in accordance with Section 9.02):
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(a) Term Notes. On or prior to the Effective Date; (i) Evergreen
Investments (or its counsel) shall have received from each party hereto either a
(y) counterpart of this Agreement signed on behalf of such party or (z) written
evidence satisfactory to the Lenders (which may include telecopy transmission of
a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement; and (ii) there shall have been delivered to the
Agent for the account of each of the Lenders that has requested same the
appropriate Term Note executed by the Company in the amount, maturity and as
otherwise provided herein.
(b) Officer's Certificate. On the Effective Date, the Agent shall
have received from the Company a certificate, dated such date and signed on
behalf of the Company by an authorized representative of the Company, certifying
on behalf of the Company that all of the conditions in each of Sections 4.01(f),
(g), (h), (j) and (o), have been satisfied on such date.
(c) Opinions of Counsel. On the Effective Date, the Agent shall have
received from (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the
Company, an opinion addressed to the Agent and the Lenders and dated the
Effective Date substantially in the form of Exhibit B and (ii) ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, general counsel to the Company, an opinion addressed to each Agent and
the Lenders and dated the Effective Date substantially in the form of Exhibit C.
(d) First-Lien Credit Agreement. On the Effective Date, the
First-Lien Credit Agreement shall have been executed and delivered by the
parties thereto and shall be in full force and effect. The Agent shall have
received true and correct copies of all First-Lien Credit Documents, certified
as such by an Authorized Representative of the Company, the First-Lien Credit
Documents and all terms and conditions thereof (including, without limitation,
amortization, maturities, interest rates, covenants, defaults, remedies,
guaranties and guarantors) shall be in form and substance satisfactory to the
Agent and the Required Lenders, and all conditions precedent to the First-Lien
Credit Documents shall have been satisfied, and not waived unless consented to
by the Agent and the Required Lenders, to the satisfaction of the Agent and the
Required Lenders.
(e) Second-Lien Note Indenture. On the Effective Date, the
Second-Lien Note Indenture shall have been executed and delivered by the parties
thereto and shall be in full force and effect, and the Company shall have
received gross cash proceeds of at least $125,000,000 from the issuance of
Second-Lien Notes thereunder, the full amount of which proceeds the Company
shall utilize to make payments owing in connection with the Transaction
contemporaneously with the utilization by the Company of any proceeds of Term
Loans for such purpose. The Agent shall have received true and correct copies of
all Second-Lien Note Documents, certified as such by an Authorized
Representative of the Company, the Second-Lien Note Documents and all terms and
conditions thereof (including, without limitation, amortization, maturities,
interest rates, covenants, defaults, remedies, guaranties and guarantors) shall
be in form and substance satisfactory to the Agent and the Required Lenders, and
all conditions precedent under the Second-Lien Note Documents shall have been
satisfied, and not waived unless consented to by the Agent and the Required
Lenders, to the satisfaction of the Agent and the Required Lenders.
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(f) Adverse Change. On the Effective Date, there shall not have
occurred (and neither the Agent nor the Required Lenders shall have become aware
of any facts or conditions not previously known) which the Agent or the Required
Lenders shall determine has had, or could reasonably be expected to have, a
Material Adverse Effect.
(g) Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or, to the knowledge of the Company,
threatened with respect to (i) the Transaction or any documentation executed in
connection therewith (including any Credit Document) or the transactions
contemplated thereby or (ii) which is, or could reasonably be expected to have,
a Material Adverse Effect.
(h) Fees, etc. On the Effective Date, the Company shall have paid to
the Agent and the Lenders all costs, fees and expenses (including, without
limitation, legal fees and expenses of the Agent and their affiliates incurred
prior to the Effective Date) payable to the Agent and the Lenders or otherwise
payable in respect of the Transaction to the extent then due.
(i) Corporate Documents; Proceedings; etc. (i) On the Effective
Date, the Agent shall have received a certificate, dated the Effective Date,
signed by an authorized officer of the Company and attested to by the Secretary
or any Assistant Secretary of the Company, substantially in the form of Exhibit
G with appropriate insertions, together with copies of the certificate of
incorporation, by-laws or equivalent organizational documents of the Company,
and the resolutions of the Company authorizing the transactions referred to
herein and occurring on or prior to the Effective Date.
(ii) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be in form and substance
reasonably satisfactory to the Agent and the Required Lenders, and the Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Agent or the Required Lenders reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
(j) The Transaction, etc. (i) On or prior to the Effective Date, (i)
there shall have been delivered to the Agent true and correct copies of the
Confirmation Order (which shall be a Final Order), the Plan of Reorganization,
the Disclosure Statement and the other Plan Documents, which Confirmation Order,
Plan of Reorganization, Disclosure Statement and other Plan Documents shall be
in form and substance reasonably satisfactory to the Agent and the Required
Lenders and shall be in full force and effect on the Effective Date (and with
the Confirmation Order, the Plan of Reorganization and the Disclosure Statement
also to be certified by the Bankruptcy Court), (ii) there shall have been
delivered to the Agent a true and correct copy of the Notice of Plan Effective
Date, which Notice of Plan Effective Date shall be in form and substance
reasonably satisfactory to the Agent and the Required Lenders, shall have been
entered by the Bankruptcy Court, shall be in full force and effect and shall not
be subject to any stay, (iii) all conditions precedent to the effective date of
the Plan
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of Reorganization shall have been satisfied (and not waived without the consent
of the Agent and the Required Lenders) to the reasonable satisfaction of the
Agent and the Required Lenders, (iv) the effective date of the Plan of
Reorganization shall have occurred and the Plan of Reorganization shall have
been substantially consummated, and (v) no request to revoke the Confirmation
Order shall be pending before the Bankruptcy Court.
(ii) On the Effective Date and prior to or concurrently with
the incurrence of the Term Loans hereunder, each element of the Transaction
shall have been consummated in accordance with the Plan of Reorganization, the
other applicable Plan Documents and all applicable laws.
(iii) On the Effective Date, (x) the aggregate amount of
proceeds received by the Company from the term loans incurred under the
First-Lien Credit Agreement on the Effective Date when added to the net cash
proceeds received by the Company from the issuance of the Second-Lien Notes,
shall be sufficient to make all cash payments required to be made pursuant to
the Plan of Reorganization, (y) the Company shall have at least $115,000,000 of
unrestricted cash and/or Cash Equivalents on hand after making all cash payments
required to be made pursuant to the Plan of Reorganization and (z) the Agent
shall have received evidence, in form, scope and substance reasonably
satisfactory to it, that the matters set forth above in this Section
4.01(j)(iii) have been satisfied on such date.
(k) Existing Indebtedness and Preferred Equity. On the Effective
Date and after giving effect to the consummation of the Transaction, the Company
and its Subsidiaries shall have no outstanding preferred equity or Indebtedness,
except for (i) Indebtedness pursuant to (or in respect of) the Credit Documents,
(ii) Indebtedness pursuant to (or in respect of) the First-Lien Credit Documents
(iii) Indebtedness pursuant to (or in respect of) the Second-Lien Note
Documents, and (iv) such other outstanding Indebtedness of the Company and its
Subsidiaries permitted pursuant to Section 6.01. On and as of the Effective
Date, all Indebtedness to remain outstanding as described in the immediately
preceding sentence shall remain outstanding after giving effect to the
Transaction and the other transactions contemplated hereby without any breach,
required repayment, required offer to purchase, default, event of default or
termination rights existing thereunder or arising as a result of the Transaction
and the other transactions contemplated hereby and there shall not be any
amendments or modifications to the documents governing any Existing Indebtedness
that are adverse to the interests of the Lenders (other than as requested or
approved by the Agent). On and as of the Effective Date, the Agent shall be
satisfied with the amount of and the terms and conditions of all Indebtedness
described above in this Section 4.01(k).
(l) Pledge Agreement. On the Effective Date, the Company shall have
duly authorized, executed and delivered the Pledge Agreement in the form of
Exhibit D and shall have delivered to the First-Lien Collateral Agent (as
defined in the Intercreditor Agreement), as Pledgee thereunder, all of the
Pledge Agreement Collateral, if any, referred to therein and then owned by the
Company, (i) endorsed in blank in the case of promissory notes constituting
Pledge Agreement Collateral and (ii) together with executed and undated
endorsements for transfer in the case of Capital Stock constituting certificated
Pledge Agreement Collateral, along with evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent or the Required
Lenders, desirable, to perfect the security interests purported to be created by
the Pledge Agreement have been taken and the Pledge Agreement shall be in full
force and effect.
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(m) Security Agreement. On the Effective Date, the Company shall
have duly authorized, executed and delivered the Security Agreement in the form
of Exhibit E covering all of the Company's Security Agreement Collateral,
together with:
(i) proper financing statements (Form UCC-1 or the
equivalent) fully executed for filing under the UCC or other appropriate
filing offices of each jurisdiction as may be necessary or, in the
reasonable opinion of the Collateral Agent or the Required Lenders,
desirable, to perfect the security interests purported to be created by the
Security Agreement;
(ii) certified copies of requests for information or copies
(Form UCC-11), or equivalent reports as of a recent date, listing all
effective financing statements that name the Company or any of its
Subsidiaries as debtor and that are filed in the jurisdictions referred to
in clause (i) above and in such other jurisdictions in which Collateral is
located on the Effective Date, together with copies of such other financing
statements that name the Company or any of its Subsidiaries as debtor (none
of which shall cover any of the Collateral except (x) to the extent
evidencing Permitted Liens or (y) those in respect of which the Collateral
Agent shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully executed for
filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be necessary
or, in the reasonable opinion of the Collateral Agent or the Required
Lenders, desirable, to perfect the security interests intended to be created
by the Security Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent or the Required Lenders,
desirable to perfect and protect the security interests purported to be
created by the Security Agreement have been taken, and the Security
Agreement shall be in full force and effect.
(n) Intercreditor Agreement. The Company, the Agent and the
other parties thereto shall have duly authorized, executed and delivered the
Intercreditor Agreement in the form of Exhibit H hereto, and the Intercreditor
Agreement shall be in full force and effect.
(o) Governmental Approvals; etc. On or prior to the Effective Date,
(A) all necessary governmental (domestic (including those of the Bankruptcy
Court) and foreign) and third party approvals in connection with the Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in full force and effect and evidence thereof shall have been
provided to the Agent, (B) all necessary material governmental (domestic and
foreign) and third party approvals in connection with any Existing Indebtedness
which is to remain outstanding after the Effective Date and the consummation of
the Transaction shall have been obtained and remain in full force and effect and
evidence thereof shall have been provided to the Agent and (C) all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction, the making of the loans and
the transactions contemplated by the Documents or otherwise referred to herein
or therein. Additionally, there
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shall not exist any judgment, order, injunction or other restraint issued or
filed by any Governmental Authority or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
consummation of the Transaction or the making of the loans or the transactions
contemplated by the Documents.
(p) Financial Statements; etc. (i) On or prior to the Effective
Date, the Agent and the Lenders shall have received true and correct copies of
the historical financial statements referred to in Sections 3.05(a), which
historical financial statements shall be in form and substance reasonably
satisfactory to the Agent and the Required Lenders.
(ii) On or prior to the Effective Date, the Agent and the
Lenders shall have received (x) interim quarterly (and year to date)
consolidated financial statements of the Company and its Subsidiaries for each
fiscal quarter ended (1) after the date of the last financial statements for
such Persons previously furnished to the Agent and the Lenders pursuant to
Section 3.05(a), and (2) at least 45 days prior to the Effective Date and (y)
interim monthly consolidated financial statements of the Company and its
Subsidiaries for any calendar month ended after the date of the last quarterly
financial statements furnished pursuant to preceding clause (x) and at least 10
days prior to the Effective Date; provided that the Company shall only be
required to deliver cash and debt balances and a flash income statement for the
month ended November 30, 2004.
(q) Solvency Opinion; Insurance Certificates. On the Effective Date,
the Agent shall have received:
(i) a solvency opinion from the chief financial officer of
the Company in the form of Exhibit I; and
(ii) certificates of insurance complying with the
requirements of Section 5.05 for the business and properties of the Company
and its Subsidiaries, in form and substance reasonably satisfactory to the
Agent and the Required Lenders.
Upon the occurrence of the Effective Date (as determined by the Required Lenders
and set forth in a written notice given by the Required Lenders to the Agent),
and upon receipt by the Agent of the above notice from the Required Lenders, the
Agent shall give each Lender and the Company notice that the Effective Date has
occurred (although the failure to give any such notice shall not affect any
Lender's or the Company's obligations under this Agreement).
ARTICLE V
Affirmative Covenants
Until the principal of and interest on each Term Loan and all fees
payable hereunder shall have been paid in full the Company covenants and agrees
with the Lenders that:
5.01 Information Covenants. The Company will furnish to each Lender
(and to the Agent, in the case of subsections (f), (g) and (i) of this Section
5.01):
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(a) Reserved.
(b) Quarterly Financial Statements. Within 45 days (or on or before
June 14, 2005, in the case of the first quarterly accounting period of the
Company in the fiscal year 2005 after the close of each of the first three
quarterly accounting periods in each fiscal year of the Company (i) the
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such quarterly accounting period and the related consolidated statements of
income and retained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, in each case setting forth
comparative figures (to the extent possible after giving effect to changes in
the Company's accounting principles and procedures) for the corresponding
quarterly accounting period in the prior fiscal year, all of which shall be
certified by Authorized Representative of the Company that they fairly present
in all material respects in accordance with generally accepted accounting
principles the financial condition of the Company and its Subsidiaries as of the
dates indicated and the results of their operations for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes, and
(ii) management's discussion and analysis of the important operational and
financial developments during such quarterly accounting period, in each case
without any material qualifications with respect thereto.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Company (or by April 30, 2005 in the case of the fiscal
year of the Company ending December 31, 2004), (i) the consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income and retained earnings and
statement of cash flows for such fiscal year setting forth (commencing with the
Company's fiscal year ended closest to December 31, 2005) comparative figures
for the preceding fiscal year and certified by ▇▇▇▇▇▇▇▇ LLP or other independent
certified public accountants of recognized standing reasonably acceptable to the
Required Lenders, together with a report of such accounting firm stating that in
the course of its regular audit of the financial statements of the Company and
its Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge of any
Default or an Event of Default relating to financial or accounting matters which
has occurred and is continuing or, if in the opinion of such accounting firm
such a Default or an Event of Default has occurred and is continuing, a
statement as to the nature thereof, and (ii) management's discussion and
analysis of the important operational and financial developments during such
fiscal year.
(d) Management Letters. Promptly after the Company's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(e) Reserved.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 5.01(b) and (c), a certificate
from the chief financial officer of the Company certifying on behalf of the
Company that, to such officer's knowledge after due inquiry, no Default or Event
of Default has occurred and is continuing or, if any Default or Event of Default
has occurred and is continuing, specifying the nature and extent thereof, which
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certificate shall certify that there have been no changes to Annexes C through
F, and Annexes I through K, in each case of the Security Agreement and Annexes A
through F of the Pledge Agreement, in each case since the Effective Date or, if
later, since the date of the most recent certificate delivered pursuant to this
Section 5.01(f), or if there have been any such changes, a list in reasonable
detail of such changes, and whether the Company has otherwise taken all actions
required to be taken by them pursuant to such Security Documents in connection
with any such changes.
(g) Notice of Default, Litigation and Material Adverse Effect.
Promptly, and in any event within three Business Days after any officer of the
Company or any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default
hereunder, or a default or event of default under any of the First-Lien Credit
Documents or Second-Lien Note Documents, (ii) the occurrence of a Collateral
Trigger Date, or the termination of discharge of obligations under any of the
First-Lien Credit Documents or Second-Lien Note Documents, (iii) any litigation
or governmental investigation or proceeding pending against the Company or any
of its Subsidiaries (x) which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or (y) with respect to
any Document, or (iv) any other event, change or circumstance that has had, or
could reasonably be expected to have, a Material Adverse Effect.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which the Company or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders (or any trustee, agent or other representative therefor) of
its material Indebtedness (including the First-Lien Credit Agreement and the
Second-Lien Note Indenture) pursuant to the terms of the documentation governing
such Indebtedness. The Company shall deliver an opinion of counsel covering the
security interests granted pursuant to the Security Documents contemporaneously
with the delivery of any similar opinion to the trustee under the Second-Lien
Note Indenture pursuant to Section 4.4 thereof so long as such an opinion is
required to be delivered pursuant to the Second-Lien Note Indenture or any
similar document.
(i) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Company or any of its
Subsidiaries as the Agent or any Lender (through the Agent) may reasonably
request.
5.02 Corporate Existence. Subject to Section 6.03, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect the corporate existence, rights (charter and statutory), licenses,
permits, franchises, patents, copyrights and trademarks of the Company and each
of the Subsidiaries; provided, however, that the Company will not be required to
preserve the existence (in the case of any Subsidiary) or any such right,
license, permit, franchise, patent, copyright or trademark (in the case of the
Company or any Subsidiary) if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries as a whole or that the loss thereof would not
be reasonably likely to result in a Material Adverse Effect; provided, further,
that the foregoing will not prohibit a sale, transfer or conveyance of a
Subsidiary of the Company or any of its assets in compliance with the terms of
this Agreement.
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5.03 Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material Taxes, assessments and governmental charges levied
or imposed (i) upon the Company or any of its Subsidiaries or (ii) upon the
income, profits or property of the Company or any of the Subsidiaries and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
could reasonably be expected to become a Lien upon the property of the Company
or any of the Subsidiaries; provided, however, that the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (x) whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted or (y) if the failure to so pay, discharge or cause to be
paid or discharged would not reasonably be expected to have a Material Adverse
Effect.
5.04 Maintenance of Properties. The Company will, and will cause each
of its Subsidiaries to, keep all property necessary to the business of the
Company and its Subsidiaries taken as a whole in good working order and
condition, ordinary wear and tear excepted; provided that the foregoing covenant
shall not be violated by reason of any failures which, individually and in the
aggregate would not be reasonably likely to have a Material Adverse Affect.
5.05 Insurance. (a) The Company will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all such property and against all such risks as is
consistent and in accordance with industry practice for companies similarly
situated owning similar properties and engaged in similar businesses as the
Company and its Subsidiaries, and furnish to the Agent, upon its request
therefor, full information as to the insurance carried. The provisions of this
Section 5.05 shall be deemed supplemental to, but not duplicative of, the
provisions of any Security Documents that require the maintenance of insurance.
(b) From and after the date of the Discharge of First-Lien
Obligations and the Discharge of Second-Lien Obligations, the Company will, and
will cause each of its Subsidiaries to, at all times keep its property insured
in favor of the Collateral Agent, and all policies or certificates (or certified
copies thereof) with respect to such insurance (and to the extent requested by
the Collateral Agent (which request shall be made at the request of the Required
Lenders)) any other insurance maintained by the Company and/or such
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be canceled without at least 30 days'
prior written notice thereof by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Parties, and (iv) shall be deposited with the Collateral Agent.
(c) From and after the date of the Discharge of First-Lien
Obligations and the Discharge of Second-Lien Obligations, if the Company or any
of its Restricted Subsidiaries shall fail to maintain insurance in accordance
with this Section 5.05, or if the Company or any of its Subsidiaries shall fail
to so endorse and deposit all policies or certificates with respect thereto, the
Agent shall have the right (but shall be under no obligation) to procure such
insurance and
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the Company agrees to reimburse the Agent for all reasonable costs and expenses
of procuring such insurance.
(d) The rights under this Section 5.05 are subject to the provisions
of the Intercreditor Agreement (including, without limitation, Section 5.2
thereof).
5.06 Books and Records. The Company shall keep proper books of record
and account, in which full and correct entries will be made of all material
financial transactions and the assets and business of the Company and each
Subsidiary of the Company in material compliance with GAAP.
5.07 Payment of Principal and Interest. The Company shall duly and
punctually pay the principal of and interest on the Term Loans in accordance
with the terms of this Agreement.
5.08 Collateral Trigger Date; Additional Subsidiaries.
(a) Within 10 Business Days after any Collateral Trigger Date, the
Company shall cause each Subsidiary that is a Subsidiary Credit Party (i) to
execute a guarantee substantially similar to the guarantee executed by the
Subsidiary Credit Parties in connection with the Senior Credit Agreements
pursuant to which it shall guarantee the obligations of the Company hereunder
(solely to the extent such Subsidiary has entered into a Guarantee with respect
to the Senior Credit Agreements or is a co-borrower under the Senior Credit
Agreements (in each case to the extent the Senior Credit Agreements remain
outstanding at such time)), (ii) to become a party to the Security Documents and
other Credit Documents and promptly take such actions to create and perfect
Liens on such Subsidiary's assets to secure the Obligations as the Agent or the
Required Lenders shall reasonably request (but solely to the extent such
Subsidiary has granted a Lien on its assets to secure the Senior Credit
Agreements (to the extent the Senior Credit Agreements remain outstanding at
such time)), (iii) if any Capital Stock in or Indebtedness of such Subsidiary is
owned by or on behalf of any Credit Party, the Company and the Subsidiary Credit
Parties will cause such Capital Stock and promissory notes evidencing such
Indebtedness to be pledged pursuant to the Security Documents (except that, if
such Subsidiary is a Foreign Subsidiary, shares of voting stock of such
Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to 65%
of the outstanding shares of voting stock of such Subsidiary and further limited
solely to the extent such Subsidiary has granted a Lien on such Capital Stock
and promissory notes to secure the Senior Credit Agreements (to the extent the
Senior Credit Agreements remain outstanding at such time)) and (iv) deliver
legal opinions, with respect to similar matters covered in Exhibit B, to the
addresses contained in Exhibit B, including those related to the guarantees and
pledges of the Subsidiary Credit Parties in form and substance reasonably
satisfactory to the Agent. Upon the occurrence of a Collateral Trigger Date, the
Credit Documents shall be amended to incorporate and reference the Subsidiary
Credit Parties throughout the Credit Documents, including the covenants, in each
place where the Senior Credit Agreements as of the date hereof references the
Borrowers, Subsidiary Credit Parties or Credit Parties, as applicable, and the
Company and each of the Lenders hereby authorizes and directs the Agent on its
behalf to enter into such amendment. The Company hereby agrees to cause the
Subsidiary Credit Parties to execute such Credit Documents and become parties
hereto and thereto.
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(b) If any additional Significant Restricted Subsidiary is formed or
acquired after the Effective Date but prior to the Collateral Trigger Date, and
the Capital Stock in or Indebtedness of such Subsidiary is owned directly by the
Company and is pledged to secure the First-Lien Obligations and the Second-Lien
Obligations, the Company will notify the Agent and the Lenders thereof in
writing and will cause such Capital Stock and promissory notes evidencing such
Indebtedness to be pledged pursuant to the Security Documents when such Capital
Stock is pledged to secure the First-Lien Obligations and the Second-Lien
Obligations (except that, if such Subsidiary is a Foreign Subsidiary, shares of
voting stock of such Subsidiary to be pledged pursuant to the Pledge Agreement
may be limited to 65% of the outstanding shares of voting stock of such
Subsidiary).
(c) If any additional Significant Restricted Subsidiary is formed or
acquired after the Collateral Trigger Date, the Company will notify the Agent
and the Lenders thereof in writing and (a) if such Subsidiary is a Subsidiary
Credit Party, the Company will cause such Subsidiary to become a party to the
Security Documents within ten Business Days after such Restricted Subsidiary is
formed or acquired and promptly take such actions to create and perfect Liens on
such Subsidiary's assets to secure the Obligations as the Agent or the Required
Lenders shall reasonably request and (b) if any Capital Stock in or Indebtedness
of such Subsidiary is owned by or on behalf of any Credit Party, the Company
will cause such Capital Stock and promissory notes evidencing such Indebtedness
to be pledged pursuant to the Security Documents within 10 Business Days after
such Subsidiary is formed or acquired (except that, if such Subsidiary is a
Foreign Subsidiary, shares of voting stock of such Subsidiary to be pledged
pursuant to the Pledge Agreement may be limited to 65% of the outstanding shares
of voting stock of such Subsidiary).
5.09 Future Amendments. Upon the occurrence of the Covenant
Triggering Event, this Agreement shall be amended automatically without any
further action on the part of any Person so that each of the financial covenants
listed on Annex I hereto shall become a part of Article VI of this Agreement and
the event of default listed on Annex I hereto shall become a part of Section
7.01 of this Agreement (in each case on a prospective basis only); provided that
if at the time the Covenant Triggering Event occurs, the Senior Credit
Agreements contain a financial covenant (such covenant, the "Senior financial
covenant") that measures the same financial information as one of the financial
covenants listed on Annex I (such covenant, the "Annex I financial covenant")
and the Annex I financial covenant is more restrictive to the Company than the
Senior financial covenant as adjusted to be more favorable to the Company by 15%
(such covenant, the "Adjusted Senior financial covenant"), then the Annex I
financial covenant shall be amended so that it is equal to the Adjusted Senior
financial covenant.
ARTICLE VI
Negative Covenants
Until the principal of and interest on each Term Loan and all fees
payable hereunder have been paid in full the Company covenants and agrees with
the Lenders that:
6.01 Limitation on Additional Indebtedness. The Company shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, assume, issue,
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guarantee or in any manner become directly or indirectly liable for or with
respect to, contingently or otherwise, the payment of (collectively to "incur")
any Indebtedness (including any Acquired Indebtedness), except for Permitted
Indebtedness; provided, that the Company and any Restricted Subsidiary will be
permitted to incur Indebtedness (including Acquired Indebtedness) if,
immediately after giving pro forma effect to such incurrence (including the
application of the net cash proceeds therefrom), the Consolidated Interest
Coverage Ratio for the most recent four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred would be at least (a) 2.00:1.00 if such
Indebtedness is incurred by the Company or (b) 2.15:1.00 if such Indebtedness is
incurred by any Restricted Subsidiary, in each case determined on a pro forma
basis (including a pro forma application of the net cash proceeds therefrom), as
if the additional Indebtedness had been issued and the application of proceeds
therefrom had occurred at the beginning of such four-quarter period. The Company
and any Restricted Subsidiary shall not be entitled to incur any Indebtedness
(other than Permitted Indebtedness) under the Consolidated Interest Coverage
Ratio test in this paragraph prior to the date on which internal financial
statements for the three full fiscal quarters ended September 30, 2005 are
available.
For purposes of determining compliance with this Section 6.01, in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness permitted in the definition of Permitted Indebtedness
permitted by this covenant, the Company in its sole discretion shall classify
(and may reclassify) such item of Indebtedness and only be required to include
the amount of such Indebtedness as one of such types. Acquired Indebtedness
shall be deemed to have been incurred at the time of the acquisition (by merger
or otherwise) of the Person or asset subject to such Acquired Indebtedness.
6.02 Limitation on Liens. The Company shall not, and shall not permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens
of any kind against or upon any property or assets of the Company or any
Restricted Subsidiary, whether now owned or hereafter acquired, or any proceeds
therefrom, other than Permitted Liens.
6.03 Fundamental Changes.
(a) The Company shall not, directly or indirectly, consolidate with
or merge with or into any other Person or sell, lease, convey or transfer all or
substantially all its assets, whether in a single transaction or a series of
related transactions, to any Person or group of affiliated Persons (other than
any of the foregoing involving solely the Company and a Restricted Subsidiary in
which the Company is the survivor or the purchaser) unless:
(i) either (i) the Company is the surviving entity or (ii)
in case the Company shall consolidate with or merge into another Person or
sell, lease, convey or transfer all or substantially all of its properties
and assets, whether in a single transaction or a series of related
transactions, to any Person, the Person formed by such consolidation or into
which the Company is merged, or the Person which acquires by sale,
conveyance or transfer, or which leases the properties and assets of the
Company substantially as an entirety, shall be a corporation, limited
liability company, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any state thereof
or the District of Columbia and shall expressly assume the due and punctual
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payment of the principal and interest on all of the Term Loans, as
applicable, and the performance or observance of every covenant of this
Agreement and the Security Documents on the part of the Company to be
performed or observed;
(ii) immediately after giving effect to such transaction on a
pro forma basis (including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction immediately after giving effect to such transaction) no Default
or Event of Default shall have happened and be continuing; and
(iii) immediately after giving effect to such transaction on a
pro forma basis (including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or the surviving entity (assuming such surviving
entity's assumption of the Company's obligations under the Term Loans and
this Agreement), as the case may be, would be able to incur $1.00 of
Indebtedness (other than Permitted Indebtedness) under Section 6.01.
(b) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than the businesses engaged in by
the Company and its Restricted Subsidiaries as of the Effective Date and
reasonable extensions thereof and businesses ancillary or complementary thereto
(a "Permitted Business").
6.04 Disposition of Proceeds of Asset Sales. The Company shall not,
and shall not permit any Restricted Subsidiary to, make any Asset Sale unless
(a) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the shares or assets sold or otherwise disposed of and (b) at least 75%
of such consideration consists of cash or Cash Equivalents; provided that the
amount of any liabilities (other than Subordinated Indebtedness or Indebtedness
of a Restricted Subsidiary that would not constitute Restricted Subsidiary
Indebtedness) that are assumed by the transferee of any such assets pursuant to
an agreement that unconditionally releases the Company or such Restricted
Subsidiary, as the case may be, from further liability shall be treated as cash
for purposes of this Section 6.04. The Company or the applicable Restricted
Subsidiary, as the case may be, may (i) apply the Net Cash Proceeds from any
such Asset Sale by the Company or a Restricted Subsidiary within 365 days of the
receipt thereof (x) to repay an amount of Indebtedness (other than Subordinated
Indebtedness, First-Lien Obligations and Second-Lien Obligations) of the Company
in an amount not exceeding the Other Senior Debt Pro Rata Share (computed after
giving effect to any amount of Net Cash Proceeds used to repay First-Lien
Obligations and Second-Lien Obligations pursuant to clause (y) below) and elect
to permanently reduce the amount of the commitments thereunder by the amount of
the Indebtedness so repaid or (y) to repay First-Lien Obligations and/or the
Second-Lien Obligations, (ii) apply the Net Cash Proceeds from such Asset Sale
by the Company or a Restricted Subsidiary to repay any Restricted Subsidiary
Indebtedness and elect to permanently reduce the commitments thereunder by the
amount of the Indebtedness so repaid or (iii) apply the Net Cash Proceeds from
any Asset Sale by the Company or a Restricted Subsidiary within 365 days
thereof, to an investment in properties and assets that will be used in a
Permitted Business (or in Capital Stock and other securities of any Person that
will become a Restricted
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Subsidiary as a result of such investment to the extent such Person owns
properties and assets that will be used in a Permitted Business) of the Company
or any Restricted Subsidiary ("Replacement Assets"). Any Net Cash Proceeds from
any Asset Sale that are neither used as described in clause (i)(x) of the
preceding sentence or to repay, and permanently reduce the commitments under,
any Restricted Subsidiary Indebtedness as set forth in clause (ii) of the
preceding sentence or invested in Replacement Assets within the 365-day period
as set forth in clause (iii) shall constitute "Excess Proceeds." Any Excess
Proceeds not used as set forth in clause (i)(y) of the second proceeding
sentence shall be subject to disposition as provided in Section 2.10(c).
Notwithstanding the immediately preceding paragraph, the Company and the
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraph to the extent (i) at least 75% of the
consideration of such Asset Sale constitutes Replacement Assets, cash or Cash
Equivalents (including obligations deemed to be cash under this covenant) and
(ii) such Asset Sale is for Fair Market Value; provided that any consideration
constituting (or deemed to constitute) cash or Cash Equivalents received by the
Company or any of the Restricted Subsidiaries in connection with any Asset Sale
permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the preceding paragraph.
6.05 Limitation on Restricted Payments. The Company shall not, and
shall not permit any of the Restricted Subsidiaries to, make, directly or
indirectly, any Restricted Payment unless:
(i) no Default shall have occurred and be continuing at the
time of or upon giving effect to such Restricted Payment;
(ii) immediately after giving effect to such Restricted
Payment, the Company would be able to incur $1.00 of Indebtedness (other
than Permitted Indebtedness) under Section 6.01 hereof; and
(iii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or made on
or after the Effective Date and all Designation Amounts does not exceed an
amount equal to the sum of, without duplication, (a) 50% of the cumulative
Consolidated Net Income accrued on a cumulative basis during the period
beginning on the first day of the first fiscal quarter commencing after the
Effective Date (being January 1, 2005) and ending on the last day of the
fiscal quarter of the Company immediately preceding the date of such
proposed Restricted Payment (or, if such cumulative Consolidated Net Income
for such period is a deficit, minus 100% of such deficit), plus (b) the
aggregate net cash proceeds received by the Company from the issue or sale
(other than to a Restricted Subsidiary of the Company) of its Capital Stock
(other than Disqualified Stock) after the Effective Date (including, without
duplication, upon exercise of warrants, options or rights), plus (c) the
aggregate net cash proceeds received by the Company from the issuance (other
than to a Restricted Subsidiary of the Company) after the Effective Date of
its Capital Stock (other than Disqualified Stock) upon the conversion of, or
exchange for, Indebtedness of the Company or a Restricted Subsidiary, plus
(d) in the case of the disposition or repayment
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of any Investment constituting a Restricted Payment (other than an
Investment made pursuant to clause (d), (e) or (f) of the following
paragraph) made after the Effective Date, an amount equal to the lesser of
the return of capital with respect to such Investment and the cost of such
Investment, in either case, less the cost of the disposition of such
Investment to the extent such cost is in excess of any gain in respect of
the disposition, plus (e) in the case of any Revocation of the Designation
of a Subsidiary as an Unrestricted Subsidiary, an amount equal to the
consolidated net Investment in such Subsidiary on the date of Revocation but
not in an amount exceeding the net amount of any Investments constituting
Restricted Payments made (or deemed made) in such Subsidiary after the
Effective Date. For purposes of the preceding clauses (b) and (c) and
without duplication, the value of the aggregate net cash proceeds received
by the Company upon the issuance of Capital Stock either upon the conversion
of convertible Indebtedness or in exchange for outstanding Indebtedness or
upon the exercise of options, warrants or rights will be the net cash
proceeds received upon the issuance of such Indebtedness, options, warrants
or rights plus the incremental amount received by the Company upon the
conversion, exchange or exercise thereof.
For purposes of determining the amount expended for Restricted Payments,
cash distributed shall be valued at the face amount thereof and property other
than cash shall be valued at its Fair Market Value.
The provisions of this Section 6.05 shall not prohibit (each of which
shall be given independent effect):
(a) the payment of any dividend or other distribution within 60 days
after the date of declaration thereof, if at such date of declaration such
payment would comply with the provisions of this Agreement;
(b) so long as no Default shall have occurred and be continuing, the
purchase, redemption, retirement or other acquisition of any shares of Capital
Stock of the Company (A) in exchange for or conversion into or (B) out of the
net cash proceeds of the substantially concurrent issue and sale (other than to
a Restricted Subsidiary) of shares of Capital Stock of the Company (other than
Disqualified Stock); provided that any such net cash proceeds pursuant to the
immediately preceding subclause (B) are excluded from clause (iii)(b) of the
preceding paragraph;
(c) so long as no Default shall have occurred and be continuing, the
purchase, redemption, defeasance or other acquisition or retirement for value of
Subordinated Indebtedness made by exchange for (including any such exchange
pursuant to the exercise of a conversion right or privilege in which cash is
paid in lieu of fractional shares or scrip), or out of the net cash proceeds of,
a substantially concurrent issue or sale (other than to a Restricted Subsidiary)
of (A) Capital Stock (other than Disqualified Stock) of the Company; provided
that any such net cash proceeds, to the extent so used, are excluded from clause
(iii)(b) of the preceding paragraph, and/or (B) other Subordinated Indebtedness,
having an Average Life to Stated Maturity that is equal to or greater than the
Average Life to Stated Maturity of the Subordinated Indebtedness being
purchased, redeemed, defeased or otherwise acquired or retired;
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(d) so long as no Special Default shall have occurred and be
continuing, Investments constituting a Restricted Payment made by the Company or
any Restricted Subsidiary in any Person (including any Unrestricted Subsidiary)
in an amount not to exceed $15,000,000 million;
(e) so long as no Default shall have occurred and be continuing, the
making of a direct or indirect Investment constituting a Restricted Payment out
of the proceeds of the issue or sale (other than to a Subsidiary) of Capital
Stock (other than Disqualified Stock) of the Company; provided that any such net
cash proceeds are excluded from clause (iii)(b) of the preceding paragraph;
(f) so long as no Default or Event of Default exists at the time of
the respective Restricted Payment or would exist immediately after giving effect
thereto, Restricted Payments by the Company consisting of a redemption or
repurchase of Capital Stock of the Company from officers, employees and
directors of the Company or its Subsidiaries (or their estates) after the death,
disability, retirement or termination of employment or service as a director of
any such Person, or otherwise in accordance with any stock option plan or any
employee stock ownership plan that has been approved by the Board of Directors
of the Company; provided that the aggregate amount of Restricted Payments made
by the Company pursuant to this clause (f), and the aggregate amount paid shall
not (net of any proceeds received by the Company from issuances of its Capital
Stock and contributed to the Company in connection with such redemption or
repurchase) exceed either (x) during any fiscal year of the Company, $10,500,000
or (y) for all periods after the Effective Date (taken as a single period),
$12,500,000; or
(g) distributions or payments by a Subsidiary to its direct or
indirect parent to enable such parent to pay taxes.
Restricted Payments of the type set forth in the preceding clause (d)
and (f) shall be included in making the determination of available amounts under
clause (iii) of the preceding paragraph to the extent they are outstanding.
In no event shall a Restricted Payment made on the basis of consolidated
financial statements prepared in good faith in accordance with GAAP be subject
to rescission or constitute a Default by reason of any requisite subsequent
restatement of such financial statements which would have made such Restricted
Payment prohibited at the time that it was made.
6.06 Limitation on Transactions with Affiliates. The Company shall
not, and shall not permit, cause or suffer any Restricted Subsidiary to, conduct
any business or enter into any transaction (or series of related transactions
which are similar or part of a common plan) with or for the benefit of any of
their respective Affiliates or any beneficial holder of 10% or more of the
Common Stock of the Company or any officer or director of the Company (each, an
"Affiliate Transaction"), unless the terms of the Affiliate Transaction are set
forth in writing, and are fair and reasonable to the Company or such Restricted
Subsidiary, as the case may be. Each Affiliate Transaction involving aggregate
payments or other Fair Market Value in excess of $5,000,000 must be approved by
a majority of the Disinterested Directors or by the Board of Directors, such
approval to be evidenced by a Board Resolution stating that the Board of
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Directors has determined that such transaction or transactions comply with the
foregoing provisions provided that, in lieu of such approval by the
Disinterested Directors, the Company may obtain a written opinion from an
Independent Financial Advisor stating that the terms of such Affiliate
Transaction to the Company or the Restricted Subsidiary, as the case may be, are
fair from a financial point of view. In addition to the foregoing, the Company
shall obtain, with respect to each Affiliate Transaction involving aggregate
consideration of $25,000,000 a written opinion from an Independent Financial
Advisor stating that the terms of such Affiliate Transaction to the Company or
the Restricted Subsidiary, as the case may be, are fair from a financial point
of view. For purposes of this covenant but without limiting the requirements of
the two preceding sentences, when any Affiliate Transaction approved by a
majority of the Disinterested Directors or as to which a written opinion has
been obtained from an Independent Financial Advisor, on the basis set forth in
the preceding sentences, such Affiliate Transaction shall be deemed to be on
terms that are fair and reasonable to the Company and the Restricted
Subsidiaries, as the case may be, and therefore shall be permitted under this
covenant.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among, or solely for the
benefit of, the Company and/or any of the Restricted Subsidiaries, (ii)
transactions under the First-Lien Credit Documents (as defined in the
Intercreditor Agreement) or the Second-Lien Note Documents (as defined in the
Intercreditor Agreement), (iii) dividends paid by the Company pursuant to and in
compliance with this Section 6.06, (iv) customary directors' fees,
indemnification and similar arrangements, consulting fees, employee salaries
bonuses, employment agreements and arrangements, compensation or employee
benefit arrangements or legal fees, (v) grants of customary registration rights
with respect to securities of the Company, and (vi) Restricted Payments
permitted under Section 6.04 provided that any Investments and purchases
constituting Restricted Payments must be fair and reasonable to the Company or
such Restricted Subsidiary, as the case may be.
6.07 Limitation on Issuances and Sales of Preferred Stock by
Restricted Subsidiaries. The Company (i) shall not permit any Restricted
Subsidiary to issue any Preferred Stock (other than to the Company or a
Restricted Subsidiary) and (ii) shall not permit any Person (other than the
Company or a Restricted Subsidiary) to own any Preferred Stock of any Restricted
Subsidiary.
6.08 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise enter into
or cause to become effective any consensual encumbrance or consensual
restriction of any kind on the ability of any Restricted Subsidiary to (a) pay
dividends, in cash or otherwise, or make any other distributions on its Capital
Stock or any other interest or participation in, or measured by, its profits to
the extent owned by the Company or any Restricted Subsidiary, (b) pay any
Indebtedness owed to the Company or any Restricted Subsidiary, (c) make any
Investment in the Company or any other Restricted Subsidiary or (d) transfer any
of its properties or assets to the Company or to any Restricted Subsidiary,
except for (i) any encumbrance or restriction in existence on the Effective Date
and set forth on Schedule 6.08, (ii) any encumbrance or restriction set forth in
any First-Lien Credit Document, any Second-Lien Note Document and any other
Indebtedness of the type described in clauses, (ii) or (vii) of the definition
of the term "Indebtedness" so long as such
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encumbrances and restrictions are not materially less favorable to the Holders
than those under the First-Lien Credit Documents, (iii) customary non-assignment
provisions, (iv) any encumbrance or restriction pertaining to an asset subject
to a Lien to the extent set forth in the security documentation governing such
Lien, (v) any encumbrance or restriction applicable to a Restricted Subsidiary
at the time that it becomes a Restricted Subsidiary that is not created in
contemplation thereof, (vi) any encumbrance or restriction existing under any
agreement that refinances or replaces an agreement containing a restriction
permitted by clause (iv) above; provided that the terms and conditions of any
such encumbrance or restriction are not materially less favorable to the Holders
than those under or pursuant to the agreement being replaced or the agreement
evidencing the Indebtedness refinanced, (vii) any encumbrance or restriction
imposed upon a Restricted Subsidiary pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary or any Asset Sale to the
extent limited to the Capital Stock or assets in question, and (viii) any
customary encumbrance or restriction applicable to a Restricted Subsidiary that
is contained in an agreement or instrument governing or relating to Indebtedness
permitted to be incurred by one or more Restricted Subsidiaries hereunder;
provided that (subject to customary net worth, leverage, invested capital and
other financial covenants) the provisions of such agreement permit the payment
of interest and principal and mandatory repurchases pursuant to the terms of
this Agreement and other indebtedness that is solely an obligation of the
Company; provided further that such agreement may contain customary covenants
regarding the merger of or sale of all or any substantial part of the assets of
the Company or any Restricted Subsidiary, customary restrictions on transactions
with affiliates, and customary subordination provisions governing indebtedness
owed to the Company or any Restricted Subsidiary.
6.09 Designation of Unrestricted Subsidiaries. The Company shall not
designate any Subsidiary of the Company (other than a newly created Subsidiary
in which no Investment has previously been made) as an "Unrestricted Subsidiary"
under this Agreement (a "Designation") unless:
(a) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation;
(b) the Company would be able to incur $1.00 of Indebtedness (other
than Permitted Indebtedness) under Section 6.01; and
(c) the Company would not be prohibited under this Agreement from
making an Investment at the time of Designation (assuming the effectiveness of
such Designation) in an amount (the "Designation Amount") equal to the Fair
Market Value of the net Investment of the Company or any other Restricted
Subsidiary in such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
6.05 hereof for all purposes of this Agreement in the Designation Amount.
Neither the Company nor any Restricted Subsidiary shall at any time (x) provide
a guarantee of, or similar credit support to, any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness); provided that the Company may pledge Capital
Stock or Indebtedness of any Unrestricted Subsidiary on a nonrecourse basis such
that the pledgee has
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no claim whatsoever against the Company other than to obtain such pledged
property, (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any other
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon (or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other Indebtedness that is
Indebtedness of an Unrestricted Subsidiary, including any corresponding right to
take enforcement action against such Unrestricted Subsidiary, except in the case
of clause (x) or (y) to the extent permitted under Section 6.05 and Section 6.06
hereof.
The Company will not revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") unless:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at such
time, have been permitted to be incurred for all purposes of this Agreement.
All Designations and Revocations must be evidenced by Board Resolutions
delivered to the Agent certifying compliance with the foregoing provisions.
6.10 Limitations on Layering. Notwithstanding the provisions of
Section 6.01, the Company shall not incur any Indebtedness that is subordinate
or junior in lien priority to the Indebtedness evidenced by the Senior Credit
Agreements and senior in lien priority to any Indebtedness arising under this
Agreement.
6.11 Trigger Dates. The Company shall not, and shall not permit any
Restricted Subsidiary to, enter into, or amend or otherwise modify, any
agreement relating to Indebtedness that would have the effect of restricting or
otherwise limiting the ability of the Company or any Restricted Subsidiary to
perform its obligations under Section 5.08 on the Collateral Trigger Date or
Section 5.09 on the Covenant Trigger Date; provided that this Section 6.11 shall
not apply to (i) any First-Lien Credit Agreement or any other First-Lien Credit
Document or any amendment, modification or supplement thereof, or any
transaction effected in accordance with the terms thereof or (ii) any
Second-Lien Note Indenture or any other Second-Lien Note Document or any
amendment, modification or supplement thereof, or any transaction effected in
accordance with the terms thereof.
ARTICLE VII
Events of Default; Limitation on Remedies
7.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(a) Default in the payment of interest on any Term Loan when it
becomes due and payable and continuance of such Default for a period of fifteen
(15) Business Days or more; or
(b) Default in the payment of the principal of any Term Loan when
due; or
(c) Default in the performance, or breach, of any covenant described
under Section 6.03 or Section 6.04; or
(d) Default in the performance, or breach, of any covenant in this
Agreement (other than Defaults specified elsewhere in this Section 7.01) or the
other Credit Documents, and continuance of such default or breach for a period
of forty-five (45) days or more after written notice is given to the Company by
the Agent (at the request of the Required Lenders) specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) failure to perform any term, covenant, condition or provision of
one or more classes or issues of Indebtedness in an aggregate principal amount
outstanding of $25,000,000 or more under which the Company or a Significant
Restricted Subsidiary is obligated, and either (a) such Indebtedness is already
due and payable in full or (b) such failure results in the acceleration of the
maturity of such Indebtedness; or
(f) one or more non-appealable judgments, orders or decrees for the
payment of money of $25,000,000 or more, either individually or in the
aggregate, shall be entered into against the Company or any Significant
Restricted Subsidiary or any of their respective properties that is not paid or
fully covered by a reputable and solvent insurance company and shall not be
discharged and there shall have been a period of sixty (60) days or more during
which a stay of enforcement of such judgment or order, by reason of pending
appeal or otherwise, shall not be in effect; or
(g) the Company or any of its Significant Restricted Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the
Bankruptcy Code; or an involuntary case is commenced against the Company or any
of its Significant Restricted Subsidiaries, and the petition is not controverted
within ten (10) days, or is not dismissed within sixty (60) days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Company or any of its Significant Restricted Subsidiaries, or the Company or
any of its Significant Restricted Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any of its
Significant Restricted Subsidiaries, or there is commenced against the Company
or any of its Significant Restricted Subsidiaries any such proceeding which
remains undismissed for a period of sixty (60) days, or the Company or any of
its Significant Restricted Subsidiaries is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or the Company or any of its Significant Restricted Subsidiaries
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of sixty
(60) days; or the Company or any of its
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Significant Restricted Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate, limited liability company or similar action is
taken by the Company or any of its Significant Restricted Subsidiaries for the
purpose of effecting any of the foregoing;
(h) the representations or warranties made by the Company herein or
in the Credit Documents shall be false or misleading in any material respect at
the time made and the same shall be reasonably likely to adversely affect either
(i) the ability of the Company to make payments required hereunder or the other
Credit Documents when due or (ii) the validity or enforceability of any Credit
Document or the rights or remedies of the Lenders or the Agent or Collateral
Agent hereunder or under any other Credit Document; or
(i) unless all the Collateral has been released from the Third
Priority Liens in accordance with the provisions of the Security Documents,
default by the Company or any Credit Party in the performance of the Security
Documents, or the occurrence of any event, which adversely affects the
enforceability, validity, perfection or priority of the Third Priority Liens on
a material portion of the Collateral granted to the Collateral Agent for the
benefit of the Agent and the Lenders, the repudiation or disaffirmation by the
Company or any Credit Party of any of its material obligations under the
Security Documents or the determination in a judicial proceeding that the
Security Documents are unenforceable or invalid against the Company or any
Credit Party for any reason with respect to a material portion of the Collateral
(which default, repudiation, disaffirmation or determination is not rescinded,
stayed or waived by the Persons having such authority pursuant to the Security
Documents or otherwise cured within thirty (30) days or more after written
notice is given to the Company by the Agent (at the request of the Required
Lenders) specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder when such notice is
deemed received in accordance with this Agreement;
(j) a Change of Control shall occur;
then, and in each and every such case (other than an Event of Default specified
in Section 7.01(g) with respect to the Company), so long as the respective Event
of Default has occurred and is continuing, unless the principal of all of the
Term Loans shall have already become due and payable, and unless the Event of
Default shall have been waived in writing in accordance with the provisions of
Section 9.02, the Agent shall, at the discretion of the Required Lenders, by
notice in writing to the Company, declare the principal of all the Term Loans
and the interest accrued thereon to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
anything in this Agreement or in the Notes contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.01(g) occurs and
is continuing with respect to the Company, the principal of all the Term Loans
and the interest accrued thereon shall be immediately due and payable.
Notwithstanding the foregoing if, at any time after the principal of the Term
Loans shall have been so declared due and payable, and before any judgment or
decree for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Agent a
sum sufficient to pay all matured installments of interest upon all Term Loans
and the principal of any and all Term Loans which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest (to the extent that payment of such interest is enforceable under
applicable law) and on such principal at the rate borne by the Term
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Loans, to the date of such payment or deposit), and if any and all Defaults
under this Agreement, other than the nonpayment of principal and accrued
interest on Term Loans which shall have become due by acceleration, shall have
been cured or waived pursuant to Section 9.02, then and in every such case the
Required Lenders, by written notice to the Company and to the Agent, may waive
all Defaults or Events of Default and rescind and annul such acceleration and
its consequences; but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent Default or Event of Default, or shall impair any
right consequent thereon.
In case the Agent shall have proceeded to enforce any right under this
Agreement and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Agent, then and in every such case the Company,
the Lenders, and the Agent shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Lenders, and the Agent shall continue as though no such proceeding
had been instituted.
ARTICLE VIII
The Agent
Each of the Lenders hereby irrevocably appoints the Agent as its
administrative agent and collateral agent and authorizes the Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Agent
by the terms of the Credit Documents, together with such actions and powers as
are reasonably incidental thereto. All references to the Agent in this Article
VIII shall be deemed to include both the Agent and the Collateral Agent, as the
context so requires.
The financial institution serving as the Agent hereunder and under the
other Credit Documents shall have the same rights and powers in its capacity as
a Lender as any other Lender and may exercise the same as though it were not the
Agent, and such financial institution and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Company or any Subsidiary or other Affiliate thereof as if it were not the Agent
hereunder.
The Agent shall not have any duties or obligations except those
expressly set forth in the Credit Documents. Without limiting the generality
of the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Credit Documents that the Agent is
required to exercise in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in the Credit
Documents, the Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Company or
any of the Subsidiaries that is communicated to or obtained by the financial
institution serving as Agent or any of its Affiliates in any capacity. The
Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the
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Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Agent shall not be deemed to have knowledge of any Default unless and until
written notice thereof is given to the Agent by the Company or a Lender, and
the Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with any Credit Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith,
(iii) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth in any Credit Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Credit Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Credit Document, other
than to confirm receipt of items expressly required to be delivered to the
Agent.
The Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, direction, certificate,
consent, statement, instrument, document, opinion, report, order or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person; and the Agent shall not be bound to make any investigation into
the facts or matters stated in any such document, but the Agent, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit. The Agent also may rely upon any statement made to it
orally or by telephone and believed by it to be made by the proper Person, and
shall not incur any liability for relying thereon. The Agent may consult with
legal counsel (who may be counsel for the Company), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts. Whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an officer's certificate relating thereto. The Agent may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense. The Agent shall not
be liable for any error of judgment made in good faith by an officer thereof,
unless it is proved that the Agent was negligent in ascertaining the pertinent
facts.
The Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders and the Company in writing. Upon any such resignation, the Required
Lenders shall have the right, with the consent of the Company (which consent
shall not be unreasonably withheld or delayed and shall not be required if a
Default or an Event of Default shall have occurred and be continuing) in
consultation with the Company, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days
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after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent approved by the
Company (which approval shall not be unreasonably withheld or delayed and shall
not be required if a Default or an Event of Default shall have occurred and be
continuing) which shall be a financial institution with an office in New York,
New York, or an Affiliate of any such financial institution. Upon the acceptance
of its appointment as Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Company to a successor
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Company and such successor. After the Agent's resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Agent. Any successor to the Agent
must be a "United States person," as defined in section 7701(a)(30) of the Code.
Each Lender (other than Evergreen Investments solely with respect to the
Company) acknowledges that it has, independently and without reliance upon the
Company, the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender (other than Evergreen
Investments solely with respect to the Company) also acknowledges that it will,
independently and without reliance upon the Company, the Agent or any other
Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Credit Document or related
agreement or any document furnished hereunder or thereunder.
In connection with the performance of its duties under the Intercreditor
Agreement, the Agent shall be entitled to the benefits of this Article VIII.
ARTICLE IX
Miscellaneous
9.01 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(a) if to the Company at RCN Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, Attention of Chief
Financial Officer;
(b) if to the Agent to HSBC Bank USA, National Association, Issuer
Services, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (delivery address: ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇);
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(c) if to any other Lender, to it at its address (or telecopy
number) set forth on the signature pages hereto or in the applicable Assignment
and Acceptance.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of delivery.
Each Company hereby irrevocably authorizes and appoints the Company as its agent
to give and receive any notices on its behalf under this Agreement and each
other Credit Document, and any such notice given or received by the Company on
behalf of any Company shall be fully effective as if given or received by such
Company at such time, regardless of such Company's actual knowledge thereof.
9.02 Waivers; Amendments.
(a) No failure or delay by the Agent or any Lender in exercising any
right or power hereunder or under any other Credit Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agent and the Lenders
hereunder and under the other Credit Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Credit Document or consent to any departure by the Company
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Term Loan
shall not be construed as a waiver of any Default, regardless of whether the
Agent or any Lender may have had notice or knowledge of such Default at the
time.
(b) Neither this Agreement nor any other Credit Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or, in the case of any
other Credit Document, pursuant to an agreement or agreements in writing entered
into by the Agent and the Company, in each case with the consent of the Required
Lenders; provided that no such agreement shall (i) reduce the principal amount
of any Term Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(ii) postpone the maturity of any Term Loan, or any scheduled date of payment of
the principal amount of any Term Loan under Section 2.09, or any date for the
payment of any interest or fees payable hereunder, without the written consent
of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the percentage set forth in the definition of "Required Lenders" or any other
provision of any Credit Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender,(vi) release any Credit Party from any of its obligations under any
Credit Document or limit its liability thereunder or release all or
substantially all of the Collateral from the Liens of the Security Documents (in
each case other than to the extent such Credit Party or Collateral has
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been released under the Senior Credit Agreements), without the written consent
of each Lender or (vii) amend or modify Section 2.10(a); provided, further that
(A) no such agreement shall amend, modify or otherwise affect the rights or
duties of the Agent without the prior written consent of the Agent, (B) no such
agreement shall amend, modify or otherwise affect the terms and provisions of
Section 9.13(b) of this Agreement without the prior written consent of DBCI (or
any successor agent), in its capacity as agent for the lenders under the
First-Lien Credit Agreement, (C) this Agreement may be amended pursuant to
Section 2.01(b) to add Lenders as provided therein with the consent of the
Company and the relevant Lenders provided that such amendment does not have an
adverse effect on the existing Lenders, (D) no such agreement shall amend or
consent to any assignment by the Company pursuant to Section 9.04 hereof without
each Lender's consent and (E) this Agreement may be amended pursuant to 5.12(a)
to incorporate the Subsidiary Credit Parties with the consent of the Agent or
the Required Lenders. Notwithstanding the foregoing, any provision of this
Agreement may be amended by an agreement in writing entered into by the Company,
the Required Lenders and the Agent if at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Term Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement, in each
case in accordance with the terms hereof.
9.03 Expenses; Indemnity; Damage Waiver.
(a) The Company shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agent, the Lenders and their Affiliates, including the
reasonable out-of-pocket fees, charges and disbursements of counsel and
financial advisors for the Agent and the Lenders, in connection with any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated) and (ii)
upon the occurrence and during the continuation of an Event of Default, all
out-of-pocket expenses incurred by the Agent or any Lender, including the fees,
charges and disbursements of any counsel for the Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Credit Documents, including its rights under this Section, or in connection
with the Term Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Term Loans.
(b) The Company shall indemnify the Agent and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of any actual or prospective claim, litigation, investigation or
proceeding relating to (i) the execution or delivery of any Credit Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Credit Documents of their respective obligations thereunder or
the consummation of the Transaction or any other transactions contemplated
hereby, (ii) any Term Loan or the use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, whether such claim, litigation, investigation or
proceeding is based on contract, tort or any other theory and regardless of
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whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount required
to be paid by it to the Agent under paragraph (a) or (b) of this Section each
Lender severally agrees to pay to the Agent such Lender's pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Agent in its capacity as such
and the Agent shall be entitled to deduct amounts owing to it under Sections
9.03(a) and (b) from all property and funds held or collected by the Agent as
such, prior to making payments to the Lenders thereon (and the Lenders agree
that the Agent shall be entitled to receipt of any such amounts prior to payment
to the Lenders of amounts owed to them). For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the
outstanding Term Loans at the time.
(d) To the extent permitted by applicable law, the Company shall not
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
any Term Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Company without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agent
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement. If the Agent consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Agent.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of the Term Loans at the time owing to it); provided that (i) except in the case
of an assignment to an existing Lender, the Company must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld or
delayed); provided that the consent of the Company shall not be
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required for any assignment that occurs at any time when an Event of Default
pursuant to paragraphs (h) and (i) of Article VII hereof shall have occurred and
be continuing, (ii) except in the case of an assignment to an existing Lender or
an assignment of the entire remaining amount of the assigning Lender's Term
Loans, the amount of the Term Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Agent) shall not be less than $1,000,000
unless the Company otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement and (iv) the parties to each
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500. Subject to acceptance
and recording thereof pursuant to paragraph (d) of this Section, from and after
the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.17 and 9.03). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Agent, acting for this purpose as an agent of the Company,
shall maintain at its Issuer Services office in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and principal amount of,
and stated interest on, the Term Loans of each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Company, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company or the Agent,
sell participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of the Term Loans owing to it); provided that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for
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the performance of such obligations and (iii) the Company, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Credit
Documents and to approve any amendment, modification or waiver of any provision
of the Credit Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this Section,
the Company agrees that each Participant shall be entitled to the benefits of
Sections 2.15 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent referring to Section 2.17. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Company is notified of the participation
sold to such Participant and such Participant complies, for the benefit of the
Company, with Section 2.17(e) as though it were a Lender.
(g) Without notice to or consent from the Agent or the Company, any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including, without limitation, any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
9.05 Survival. All covenants, agreements, representations and
warranties made by the Company in the Credit Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement
or any other Credit Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Credit
Documents and the making of any Term Loans, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that the Agent or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Term Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid. The provisions of Sections 2.15, 2.17
and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Term Loans or the termination of this Agreement or any
provision hereof.
9.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single
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contract. This Agreement, the other Credit Documents and any separate letter
agreements with respect to fees payable to the Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by all parties hereto
and when the Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
9.07 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
9.08 Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Company
against any of and all the obligations of the Company now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
deposits may be unmatured. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Company hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Credit Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Credit Document shall affect any right that the Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Credit Document against the Company or its properties in
the courts of any jurisdiction.
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(c) The Company hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Credit
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process by registered or certified mail, return receipt requested. Nothing in
this Agreement or any other Credit Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
9.12 Confidentiality. Each of the Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' and its Related
Funds' directors, officers, employees and agents, including accountants, legal
counsel and other advisors (other than securities analysts) or to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisors (so long as such contractual counterparty
or professional advisor to such contractual counterparty agrees in writing to be
bound by the provisions of this Section 9.12) (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder, (f) provided that such assignee
or Participant, or such prospective assignee or Participant agrees in writing to
be bound by the confidentiality provisions of this Section 9.12, to any assignee
of or Participant in, or any prospective assignee of or Participant in,
- 79 -
any of its rights or obligations under this Agreement, (g) with the consent of
the Company or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Agent or any Lender on a nonconfidential basis from a source other than the
Company. For the purposes of this Section, "Information" means all information
received from the Company or relating to the Company or their business, other
than any such information that is available to the Agent or any Lender on a
nonconfidential basis prior to disclosure by the Company or; provided that, in
the case of information received from the Company after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Notwithstanding the foregoing, the parties (and each Related Party,
representative, or other agent of the parties) may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
the transaction, provided, however, that this sentence shall not permit any
party (or any Related Party, representative, or other agent thereof) to disclose
any information that is not necessary to understanding the tax treatment and tax
structure of the transaction (including the identity of the parties, any
information that could lead another to determine the identity of the parties, or
any other information to the extent that such disclosure could result in a
violation of any federal or state securities law).
9.13 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Term
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Term Loan in accordance with
applicable law, the rate of interest payable in respect of such Term Loan
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Term Loan but were not payable
as a result of the operation of this Section shall be cumulated and the interest
and Charges payable to such Lender in respect of other Term Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
9.14 Release of Subsidiaries; Collateral.
(a) If (i) the Agent receives a certificate from the chief executive
officer, the chief financial officer or treasurer of the Company certifying as
of the date of that certificate that, after the consummation of the transaction
or series of transactions described in reasonable detail satisfactory to the
Agent in such certificate on such date, the Subsidiary Credit Party identified
in such certificate will no longer be a Subsidiary of the Company and (ii) such
transactions are consummated on such date in accordance with and without
violating the provisions of this Agreement or any other Credit Document, then
such Subsidiary's guarantee of the Company's obligations under this Agreement
shall automatically terminate and such Subsidiary shall cease to be a party to
any Credit Document.
- 80 -
(b) If (i) any Subsidiary Credit Party is released from its
guarantee with respect to the Senior Credit Agreements or (ii) any collateral is
released from the Lien securing the Senior Credit Agreements, then, to the
extent such Subsidiary Credit Party has guaranteed the Company's obligations
hereunder, or such collateral has been pledged to secure the Company's
obligations hereunder or under any guarantee executed by a Subsidiary Credit
Party with respect hereto, then such Subsidiary's guarantee of the Company's or
a Subsidiary Credit Party's obligations under this Agreement shall automatically
terminate and such Subsidiary shall cease to be a party to any Credit Document
and/or such collateral shall automatically be released from the Liens in favor
of the Agent hereunder, in each case without any further action on the part of
any Person.
(c) No such termination or cessation shall release, reduce, or
otherwise adversely affect the obligations of any other Credit Party under this
Agreement or any other Credit Document, all of which obligations continue to
remain in full force and effect.
9.15 Intercreditor Agreement Controls. Notwithstanding anything
herein to the contrary, the Liens and security interests granted at any time to
the Agent pursuant to this Agreement or any other Credit Document (or to secure
any obligation hereunder or thereunder) and the exercise of any right or remedy
by the Agent hereunder or thereunder are subject to the provisions of the
Intercreditor Agreement. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement or any other Document, the terms of
the Intercreditor Agreement will govern and the Lenders are subject to the
agreements made by the Agent on their behalf in the Intercreditor Agreement, but
no such agreement shall obligate any Lender to make additional Term Loans.
- 81 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
RCN CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
HSBC BANK USA, NATIONAL ASSOCIATION
as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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Evergreen High Yield Bond Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Evergreen VA Strategic Income Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Evergreen Strategic Income Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Evergreen VA High Income Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
- 83 -
Evergreen Income Advantage Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Evergreen Utility and
Telecommunications Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Sentinel Capital Markets Income
Fund, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
Sentinel High Yield Bond Fund,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Analyst
Address:
- 84 -
ANNEX I
I. Financial Covenants
(a) Maximum Capital Expenditures. The Company will
not, and will not permit any of its Subsidiaries to, make any Capital
Expenditures, except that during any fiscal year of the Company set forth below
(taken as one accounting period) (it being understood and agreed that for
purposes of this clause (a) only, the period from September 30, 2004 through
December 31, 2004 shall be deemed to be part of the fiscal year ending on
December 31, 2005), the Company and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of all such Capital Expenditures
does not exceed in any fiscal year of the Company set forth below the amount set
forth opposite such fiscal year below:
Fiscal Year Ending On Amount
--------------------- -------------
December 31, 2005 $ 115,000,000
December 31, 2006 $ 97,750,000
December 31, 2007 and thereafter $ 86,250,000
(i) Notwithstanding the foregoing, in the event that the
amount of Capital Expenditures permitted to be made by
the Company and its Subsidiaries pursuant to clause (a)
above in any fiscal year of the Company (before giving
effect to any increase in such permitted expenditure
amount pursuant to this clause (i)) is greater than the
amount of such Capital Expenditures actually made by the
Company and its Subsidiaries during such fiscal year,
such excess (the "Rollover Amount") may be carried
forward and utilized to make Capital Expenditures in the
immediately succeeding fiscal year (it being understood
and agreed that such succeeding fiscal year Capital
Expenditures shall be deemed to have been made first
from the amount permitted for such year pursuant to
clause (a) above and second from the Rollover Amount).
(ii) In addition to the foregoing, the Company and its
Subsidiaries may make Capital Expenditures with the
amount of Excess Proceeds received by the Company or any
of its Subsidiaries from any Asset Sale so long as such
Excess Proceeds are reinvested within 365 days following
the date of such Asset Sale, but only to the extent that
such Excess Proceeds are not otherwise required to be
applied to repay Term Loans pursuant to Section 2.10(c).
(b) Consolidated Interest Coverage Ratio. The Company will
not permit the Consolidated Interest Coverage Ratio for any Test Period ending
on the last day of a fiscal quarter of the Company set forth below to be less
than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended Ratio
--------------------------------- ---------
March 31, 2005 1.44:1.00
- i -
Fiscal Quarter Ended Ratio
--------------------------------- ---------
June 30, 2005 1.73:1.00
September 30, 2005 2.01:1.00
December 31, 2005 2.01:1.00
March 31, 2006 2.30:1.00
June 30, 2006 2.59:1.00
September 30, 2006 and thereafter 2.88:1.00
(c) Minimum Consolidated EBITDA. The Company will not permit Consolidated
EBITDA for any Test Period ending on the last day of a fiscal quarter of the
Company set forth below to be less than the amount set forth opposite such
fiscal quarter below:
Fiscal Quarter Ended Amount
-------------------------------------------- -------------
March 31, 2005 $ 8,500,000
June 30, 2005 $ 25,500,000
September 30, 2005 $ 38,250,000
December 31, 2005 $ 55,250,000
March 31, 2006 $ 63,750,000
June 30, 2006 $ 72,250,000
September 30, 2006 $ 80,750,000
December 31, 2006 $ 85,000,000
March 31, 2007 $ 95,625,000
June 30, 2007 $ 102,000,000
September 30, 2007 $ 110,500,000
December 31, 2007 $ 119,000,000
March 31, 2008 $ 127,500,000
June 30, 2008 $ 131,750,000
September 30, 2008 $ 138,125,000
December 31, 2008 $ 144,500,000
March 31, 2009 $ 148,750,000
June 30, 2009 $ 153,000,000
September 30, 2009 $ 157,250,000
December 31, 2009 $ 161,500,000
March 31, 2010 $ 163,625,000
June 30, 2010 $ 165,750,000
September 30, 2010 $ 167,875,000
December 31, 2010 $ 170,000,000
March 31, 2011 $ 172,125,000
June 30, 2011 $ 174,250,000
- ii -
Fiscal Quarter Ended Amount
-------------------------------------------- -------------
September 30, 2011 $ 176,375,000
December 31, 2011 $ 178,500,000
March 31, 2012 $ 178,500,000
June 30, 2012 $ 178,500,000
Notwithstanding the foregoing, the amounts set forth above in this clause (c)
shall be reduced (x) by $18,000 for every 1000 New York Microwave Subscribers
sold by the Company and its Subsidiaries for each Test Period ending after the
date of the respective sale, (y) upon the sale by the Company or its
Subsidiaries of all of the Chicago Assets by an amount equal to that set forth
under the heading "Chicago EBITDA Adjustment" on Schedule I hereto for the
corresponding fiscal quarter of the Company and (z) upon the sale by the Company
or its Subsidiaries of all of the San Francisco Assets by an amount equal to
that set forth under the heading "San Francisco EBITDA Adjustment" on Schedule I
hereto for the corresponding fiscal quarter of the Company; provided, however,
that the amounts set forth above shall only be reduced (x) prospectively for
each full fiscal quarter after the respective sale and (y) with respect to the
fiscal quarter in which such sale occurred, based on the relevant amount of the
reduction for such fiscal quarter multiplied by a fraction, (i) the numerator of
which is the number of days in such fiscal quarter that will occur after the
date of the respective sale and (ii) the denominator of which is the total
number of days in such fiscal quarter; provided, further that with respect to
the sale of all of the Chicago Assets, the amount set forth under the heading
"Chicago EBITDA Adjustment" on Schedule I hereto shall be reduced on a
prospective basis beginning with the fourth fiscal quarter occurring after the
fiscal quarter in which such sale occurred by an amount equal to that set forth
under the heading "Chicago Overhead Reduction" on Schedule I hereto.
(d) Intentionally Deleted.
(e) Adjusted Leverage Ratio. The Company will not permit the Adjusted
Leverage Ratio at any time (on or after March 31, 2005) during a period set
forth below to be greater than the ratio set forth opposite such period below:
Fiscal Quarter Ended Ratio
--------------------------------------------- ---------
March 31, 2005 7.76:1.00
June 30, 2005 6.61:1.00
September 30, 2005 6.33:1.00
December 31, 2005 5.75:1.00
March 31, 2006 5.18:1.00
June 30, 2006 4.60:1.00
September 30, 2006 4.03:1.00
December 31, 2006 3.74:1.00
March 31, 2007 3.30:1.00
June 30, 2007 3.16:1.00
September 30, 2007 2.88:1.00
December 31, 2007 2.88:1.00
- iii -
Fiscal Quarter Ended Ratio
--------------------------------------------- ---------
March 31, 2008 2.59:1.00
June 30, 2008 and thereafter 2.30:1.00
(f) Minimum Cash on Hand. The Company will not permit Unrestricted cash and
Cash Equivalents on hand at any time to be less than the Required Unrestricted
Cash Amount.
II. Events of Default
(a) (i) The Company or any of its Subsidiaries shall (x) default in any
payment of any Indebtedness (other than the Obligations) beyond the period of
grace, if any, provided in an instrument or agreement under which such
Indebtedness was created or (y) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the Obligations)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause (determined without regard to whether any notice is required
but determined only after giving effect to any applicable grace period), any
such Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Obligations) of the Company or any of its
Subsidiaries shall be declared to be (or shall become) due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that it shall not be a Default or
an Event of Default under this section unless the aggregate principal amount of
all Indebtedness as described in preceding clauses (i) and (ii) is at least
$25,000,000.
- iv -