CREDIT AGREEMENT
dated as of September 26, 2000,
by and among
HORIZON PERSONAL COMMUNICATIONS, INC.
and
BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC,
as Borrowers,
HORIZON PCS, INC.
and
certain Subsidiaries of Horizon PCS, Inc.,
as Guarantors from time to time party hereto,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH,
as Syndication Agent and Arranger
and
FORTIS CAPITAL CORP.,
as Documentation Agent
FIRST UNION SECURITIES, INC.,
as Sole Lead Arranger and Sole Book Runner
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.........................................................2
Section 1.1 Definitions......................................2
Section 1.2 General.........................................27
Section 1.3 Other Definitions and Provisions................27
ARTICLE II CREDIT FACILITIES.................................................27
Section 2.1 Revolving Loans.................................27
Section 2.2 Swingline Loan Subfacility......................29
Section 2.3 Letter of Credit Subfacility....................30
Section 2.4 Term Loan A.....................................35
Section 2.5 Term Loan B.....................................37
Section 2.6 Additional Term Loan............................38
ARTICLE III FEES; PREPAYMENTS, INTEREST; GENERAL LOAN PROVISIONS.............39
Section 3.1 Fees............................................39
Section 3.2 Reduction of Revolving Commitments
or Term Loan A Commitments....................40
Section 3.3 Prepayments.....................................42
Section 3.4 Minimum Borrowing Amounts; Principal Amount of
Tranches; Lending Office......................45
Section 3.5 Interest; Interest Payment Dates................45
Section 3.6 Conversion Options..............................46
Section 3.7 Computation of Interest and Fees................46
Section 3.8 Pro Rata Treatment and Payments.................47
Section 3.9 Non-Receipt of Funds by the
Administrative Agent..........................48
Section 3.10 Inability to Determine Interest Rate............49
Section 3.11 Illegality......................................49
Section 3.12 Requirements of Law.............................50
Section 3.13 Indemnity.......................................51
Section 3.14 Taxes...........................................51
Section 3.15 Joint and Several Obligations of Borrowers......54
Section 3.16 Defaulting Lender; Limitation on Claims.........54
Section 3.17 Security........................................55
ARTICLE IV CLOSING: CONDITIONS OF CLOSING AND BORROWING......................55
Section 4.1 Closing.........................................55
Section 4.2 Conditions to Effectiveness.....................55
Section 4.3 Conditions to Initial Extensions of Credit......60
Section 4.4 Conditions to All Extensions of Credit..........60
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................61
Section 5.1 Representations and Warranties..................61
Section 5.2 Survival of Representations and
Warranties, Etc...............................69
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ARTICLE VI FINANCIAL INFORMATION AND NOTICES.................................69
Section 6.1 Financial Statements and Projections............69
Section 6.2 Officer's Compliance Certificate................71
Section 6.3 Accountants' Certificate........................71
Section 6.4 Other Reports...................................71
Section 6.5 Notice of Litigation and Other Matters..........72
Section 6.6 Accuracy of Information.........................73
ARTICLE VII AFFIRMATIVE COVENANTS............................................73
Section 7.1 Preservation of Corporate Existence
and Related Matters...........................74
Section 7.2 Maintenance of Property.........................74
Section 7.3 Insurance.......................................74
Section 7.4 Accounting Methods and Financial Records........74
Section 7.5 Payment and Performance of
Credit Party Obligations......................74
Section 7.6 Compliance With Laws and Approvals..............75
Section 7.7 Environmental Laws..............................75
Section 7.8 Compliance with ERISA...........................75
Section 7.9 Compliance With Agreements......................75
Section 7.10 Conduct of Business.............................76
Section 7.11 Visits and Inspections..........................76
Section 7.12 Additional Subsidiaries and Collateral..........76
Section 7.13 Hedging Agreements..............................77
Section 7.14 Use of Proceeds.................................77
Section 7.15 Landlord Waivers................................77
Section 7.16 Further Assurances..............................78
ARTICLE VIII FINANCIAL COVENANTS.............................................78
Section 8.1 Stage 1 Covenants...............................78
Section 8.2 Stage 2 Covenants...............................81
ARTICLE IX NEGATIVE COVENANTS................................................83
Section 9.1 Limitations on Indebtedness.....................83
Section 9.2 Limitations on Guaranty Obligations.............84
Section 9.3 Limitations on Liens............................84
Section 9.4 Limitations on Loans, Advances,
Investments and Acquisitions..................85
Section 9.5 Limitations on Mergers and Liquidation..........86
Section 9.6 Limitations on Sale of Assets...................86
Section 9.7 Limitations on Dividends and Distributions......87
Section 9.8 Limitations on Exchange and
Issuance of Capital Stock.....................88
Section 9.9 Transactions with Affiliates....................88
Section 9.10 Certain Accounting Changes......................88
Section 9.11 Amendments; Payments and Prepayments
of Subordinated Debt..........................88
Section 9.12 Charter Documents; Material Contracts...........89
Section 9.13 Restrictive Agreements..........................89
Section 9.14 Stay, Extension and Usury Laws..................89
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ARTICLE X DEFAULT AND REMEDIES...............................................89
Section 10.1 Events of Default...............................89
Section 10.2 Remedies........................................93
Section 10.3 Rights and Remedies Cumulative;
Non-Waiver; etc...............................94
ARTICLE XI THE ADMINISTRATIVE AGENT..........................................94
Section 11.1 Appointment.....................................94
Section 11.2 Delegation of Duties............................94
Section 11.3 Exculpatory Provisions..........................95
Section 11.4 Reliance by the Administrative Agent............95
Section 11.5 Notice of Default...............................95
Section 11.6 Non-Reliance on the Administrative
Agent and Other Lenders.......................96
Section 11.7 Indemnification.................................96
Section 11.8 The Administrative Agent in Its
Individual Capacity...........................97
Section 11.9 Resignation of the Administrative Agent,
Successor Administrative Agent................97
ARTICLE XII MISCELLANEOUS....................................................98
Section 12.1 Notices.........................................98
Section 12.2 Expenses; Indemnity.............................99
Section 12.3 Set-off........................................100
Section 12.4 Governing Law..................................100
Section 12.5 Consent to Jurisdiction........................100
Section 12.6 Binding Arbitration; Waiver of Jury Trial......100
Section 12.7 Reversal of Payments...........................102
Section 12.8 Injunctive Relief; Punitive Damages............102
Section 12.9 Accounting Matters.............................102
Section 12.10 Successors and Assigns; Participations.........103
Section 12.11 Amendments, Waivers and Consents...............106
Section 12.12 Performance of Duties..........................106
Section 12.13 All Powers Coupled with Interest...............106
Section 12.14 Survival of Indemnities........................107
Section 12.15 Titles and Captions............................107
Section 12.16 Severability of Provisions.....................107
Section 12.17 Counterparts...................................107
Section 12.18 Term of Agreement..............................107
Section 12.19 Inconsistencies with Other Documents;
Independent Effect of Covenants..............108
ARTICLE XIII GUARANTY.......................................................108
Section 13.1 The Guaranty...................................108
Section 13.2 Bankruptcy.....................................109
Section 13.3 Nature of Liability............................109
Section 13.4 Independent Obligation.........................110
Section 13.5 Authorization..................................110
Section 13.6 Reliance.......................................110
Section 13.7 Waiver.........................................110
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Section 13.8 Limitation on Enforcement......................111
Section 13.9 Confirmation of Payment........................112
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SCHEDULES
Schedule 1.1(a) Account Designation Letter
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(d) Form of Revolving Note
Schedule 2.2(d) Form of Swingline Note
Schedule 2.4(d) Form of Term Loan A Note
Schedule 2.5(c) Form of Term Loan B Note
Schedule 3.6 Form of Notice of Conversion/Extension
Schedule 3.14 3.14 Certificate
Schedule 5.1(a) Jurisdictions; Chief Executive Offices
Schedule 5.1(b) Subsidiaries; Stock Ownership
Schedule 5.1(d) Consents; Compliance with Laws; etc.
Schedule 5.1(i) ERISA
Schedule 5.1(l) Material Contracts
Schedule 5.1(m) Labor Matters
Schedule 5.1(r) Real Property and Collateral Locations
Schedule 5.1(t) Indebtedness and Guaranty Obligations
Schedule 5.1(u) Litigation
Schedule 5.1(w) Communications Licenses
Schedule 5.1(y) Sprint Agreements
Schedule 6.2 Form of Officer's Compliance Certificate
Schedule 7.3 Insurance
Schedule 7.12 Form of Joinder Agreement
Schedule 9.3(g) Liens
Schedule 9.4 Investments
Schedule 9.9 Transactions with Affiliates
Schedule 12.1 Lenders' Lending Offices
Schedule 12.10 Form of Assignment and Acceptance
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CREDIT AGREEMENT, dated as of September 26, 2000, by and among HORIZON
PERSONAL COMMUNICATIONS, INC., an Ohio corporation (the "Company") and BRIGHT
PERSONAL COMMUNICATIONS SERVICES, LLC, an Ohio limited liability company
("Bright") (individually each of the Company and Bright, a "Borrower" and
collectively, the "Borrowers"), HORIZON PCS, INC. (the "Parent") and certain
Subsidiaries of the Parent from time to time party hereto (individually each of
the Parent and such Subsidiaries, a "Guarantor" and collectively, the
"Guarantors"), the several banks and other financial institutions as may from
time to time become parties to this Agreement (individually a "Lender" and
collectively the "Lenders"), FIRST UNION NATIONAL BANK, as Administrative Agent
(the "Administrative Agent"), WESTDEUTSCHE LANDESBANK GIROZENTRALE, as
Syndication Agent and Arranger (the "Syndication Agent") and FORTIS CAPITAL
CORP., as Documentation Agent (the "Documentation Agent").
STATEMENT OF PURPOSE
WHEREAS, the Borrowers have entered into certain Sprint Agreements (as
defined herein) with Sprint PCS and its affiliates pursuant to which the
Borrowers have been granted rights and licenses to utilize certain FCC licenses,
trademarks and service marks owned by Sprint PCS or its affiliates;
WHEREAS, the Borrowers have requested the Lenders to make loans and other
extensions of credit available to the Borrowers (a) to finance the direct cost
of the construction and operation of a regional digital wireless
telecommunications network on the Sprint PCS System, (b) to finance transaction
costs and expenses related to the Initial Equity Offering (as defined herein),
the High Yield Offering (as defined herein) and the closing of this Credit
Agreement, (c) to repay certain existing Indebtedness, (d) to make payments
under the Supply Agreement and (e) to finance working capital and other general
corporate purposes; and
WHEREAS, the Lenders have agreed to extend certain credit facilities on the
terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrowers to the Administrative Agent
substantially in the form attached hereto as Schedule 1.1(a).
"Additional Credit Party" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 7.12.
"Additional Term Loan" shall have the meaning set forth in Section 2.6.
"Administrative Agent's Office" shall mean the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
12.1(c).
"Affiliate" shall mean as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person shall be deemed to
be "controlled by" a Person if such Person possesses, directly or indirectly,
power either (a) to vote 10% or more of the securities or other ownership
interests having ordinary voting power for the election of directors of such
Person or (b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Agreement" or "Credit Agreement" shall mean this Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its
terms.
"Alliance Agreements" shall mean a collective reference to each of the
(a) Network Services Agreement dated as of August 12, 1999 among the Alliances
and the Company and (b) Assignment and Agreement dated as of August 12, 1999
among the Alliances, SprintCom, Inc. and the Company.
"Alliances" shall mean a collective reference to Virginia PCS Alliance,
L.C. and West Virginia PCS Alliance, L.C., together with their successors and
assigns.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
2
announced or established from time to time by First Union at its principal
office in Charlotte, North Carolina as its prime rate. Each change in the Prime
Rate shall be effective as of the opening of business on the day such change in
the Prime Rate occurs. The parties hereto acknowledge that the rate announced
publicly by First Union as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other banks;
and "Federal Funds Effective Rate" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published on the next succeeding Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive in the absence of manifest error) that it is unable to
ascertain the Federal Funds Effective Rate, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
opening of business on the date of such change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, (a) during the Stage 1
Covenant Period, the rate per annum set forth below under the heading "Stage 1
Covenant Period" and (b) during the Stage 2 Covenant Period, the rate per annum
set forth below under the heading "Stage 2 Covenant Period" and opposite the
applicable Level then in effect, it being understood that, in each case, the
Applicable Percentage for (i) Revolving Loans and the Term Loan A which are
Alternate Base Rate Loans shall be the percentage set forth under the column
"Alternate Base Rate Margin for Revolving Loans and the Term Loan A", (ii)
Revolving Loans and the Term Loan A which are LIBOR Rate Loans shall be the
percentage set forth under the column "LIBOR Rate Margin for Revolving Loans,
the Term Loan A and Letter of Credit Fee", (iii) Term Loan B which are Alternate
Base Rate Loans shall be the percentage set forth under the column "Alternate
Base Rate Margin for Term Loan B", (iv) Term Loan B which are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for Term
Loan B", and (v) the Letter of Credit Fee shall be the percentage set forth
under the column "LIBOR Rate Margin for Revolving Loans, the Term Loan A and
Letter of Credit Fee":
STAGE 1 COVENANT PERIOD
Alternate Base Rate Margin for LIBOR Rate Margin for
Revolving Loans,
Revolving Loans the Term Loan
and the Term A and Letter
Loan A Term Loan B of Credit Fees Term Loan B
2.50% 3.00% 3.50% 4.00%
3
STAGE 2 COVENANT PERIOD
Alternate Base Rate LIBOR Rate Margin
Leverage Margin for for
Level Ratio
Revolving Revolving
Loans and Term Loans, the Term Term
the Term Loan B Loan A and Loan B
Loan A Letter of
Credit Fees
I greater than or 2.25% 3.00% 3.25% 4.00%
equal to
10.0 to 1.0
II less than 2.00% 3.00% 3.00% 4.00%
10.0 to 1.0 but
greater than or
equal to
8.0 to 1.0
III less than 1.75% 3.00% 2.75% 4.00%
8.0 to 1.0 but
greater than or
equal to
7.0 to 1.0
IV less than 1.50% 3.00% 2.50% 4.00%
7.0 to 1.0 but
greater than or
equal to
6.0 to 1.0
V less than 1.25% 3.00% 2.25% 4.00%
6.0 to 1.0 but
greater than or
equal to
5.0 to 1.0
VI less than
5.0 to 1.0 1.00% 3.00% 2.00% 4.00%
During the Stage 2 Covenant Period, the Applicable Percentage shall, in
each case, be determined and adjusted quarterly on the date five (5) Business
Days after the date on which the Administrative Agent has received from the
Borrowers the quarterly financial information and certifications required to be
delivered to the Administrative Agent and the Lenders in accordance with the
provisions of Sections 6.1(b) and 6.2 (each an "Interest Determination Date").
Such Applicable Percentage shall be effective from such Interest Determination
Date until the next such Interest Determination Date. During the Stage 2
Covenant Period, if the Borrowers shall fail to provide the quarterly financial
information and certifications in accordance with the provisions of Sections
6.1(b) and 6.2, the Applicable Percentages from such Interest Determination Date
shall, on the date five (5) Business Days after the date by which the Borrowers
were so required to provide such financial information and certifications to the
Administrative Agent and the Lenders, be based on Level I until such time as
such information and certifications are provided, whereupon the Level shall be
determined by the then current Leverage Ratio. For purposes hereof, the Leverage
Ratio shall be determined in accordance with Section 5.9(a).
"Apollo Management" shall mean Apollo Management IV, L.P. and affiliated
funds.
"Approved Budget" shall mean the annual budget delivered in conjunction
with the annual financial statements required pursuant to Section 6.1(b)
demonstrating projected income statements, cash flow and balance sheets,
projected covered population and PCS Subscribers, and such other information as
reasonably requested by the Administrative Agent, in a format reasonably
acceptable to the Required Lenders.
4
"Asset Disposition" shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of the Credit Parties or any of their
Subsidiaries, whether by sale, lease, transfer or otherwise. The term "Asset
Disposition" shall not in any event include (a) Specified Sales, (b)
dispositions of property or assets permitted by Section 9.6(b)(ii) or Section
9.6(c) hereof or (c) any Debt Issuance or Equity Issuance or Recovery Event.
"Assignment and Acceptance" shall have the meaning set forth in Section
12.10.
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Borrower" and "Borrowers" shall have the meaning set forth in the first
paragraph of this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such Loan
is made.
"Bright" shall have the meaning set forth in the first paragraph of this
Agreement.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Business Plan" shall mean the initial business plan of the Borrowers
setting forth the management case of the Borrowers and their Subsidiaries dated
June 28, 2000, as amended from time to time, which includes a capital budget, a
construction budget for the Network, projections on a quarterly basis for the
three year period and on an annual basis for the ten year period following the
date of such Business Plan and a schedule of each estimated borrowing, in each
case consistent with the rest of the Business Plan, as approved by the
Administrative Agent and the Required Lenders and as such Business Plan is
revised from time to time by the Borrowers in a format reasonably acceptable to
the Administrative Agent and the Required Lenders.
"Capital Expenditures" shall mean all expenditures of the Borrowers and
their Subsidiaries which in accordance with GAAP would be classified as capital
expenditures, including without limitation, Capital Lease Obligations, but
excluding capital expenditures made with insurance proceeds in connection with a
Recovery Event and proceeds from an asset sale permitted by Section 9.6.
"Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
5
"Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Carry-Forward Amount" shall have the meaning set forth in Section 8.11(g)
hereof.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or any Eligible Assignee which is
a domestic commercial bank or (z) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than 364 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate notes issued by
any Approved Bank (or by the parent company thereof) or commercial paper and
variable rate notes issued by, or guaranteed by any domestic corporation rated
A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within six months of the date of
acquisition, (iv) repurchase agreements with a bank or trust company (including
a Lender) or a recognized securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America, (v) obligations of any state of the United States or
any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P, Moody's and (vii)
shares of money market mutual or similar funds which invest substantially in
assets satisfying the requirements of clauses (i) through (vi) of this
definition.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.
"Collateral Assignment of Contract Rights" shall mean a collective
reference to each Collateral Assignment of Contract Rights entered into between
6
one or both Borrowers and the Administrative Agent pursuant to which such
Borrower(s) collaterally assigns its rights under a Material Contract, as such
Collateral Assignment of Contract Rights may be amended, modified, supplemented,
replaced or restated from time to time.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment, the Term Loan A Commitment, the Term Loan B Commitment,
individually or collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 3.1(a).
"Commitment Percentage" shall mean the Revolving Commitment Percentage, the
LOC Commitment Percentage, the Term Loan A Commitment Percentage and/or the Term
Loan B Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the Funding
Date to but not including the Revolving Commitment Termination Date.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with a Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes a Borrower and
which is treated as a single employer under Section 414 of the Code.
"Communications Law" shall mean the Communications Act of 1934, as amended,
and all rules and regulations thereunder, or any successor statute or statutes
thereto (including, without limitation, the Telecommunications Act of 1996) and
all rules and regulations thereunder, and all rules and regulations of the FCC,
any applicable PUC or any other applicable Governmental Authority related to the
provision of telecommunication or broadcast services, each as amended or
supplemented from time to time.
"Communications License" shall mean, with respect to the Network, any
license for the provision of telephony service, data transport, internet access
and other related services, and any other license, permit, consent, certificate
of compliance, franchise, approval, waiver or authorization granted or issued by
the FCC or other applicable Governmental Authority, including, without
limitation, any PUC Authorization and any of the foregoing authorizing or
permitting the acquisition, construction or operation of the Network.
"Company" shall have the meaning set forth in the first paragraph of this
Agreement.
"Consents" shall mean a collective reference to each of (a) the Sprint
Consent, (b) with respect to the Horizon Services Agreement, the Consent to
Collateral Assignment of Contract Rights dated as of the Closing Date among
Horizon Services, the Borrowers and the Administrative Agent, (c) with respect
to the Supply Agreement, the Consent to Collateral Assignment of Contract Rights
dated as of the Closing Date among Motorola, Inc., the Company and the
7
Administrative Agent, (d) with respect to the SBA Agreements, the Consent to
Collateral Assignment of Contract Rights dated as of the Closing Date among SBA
Towers, Inc., the Company and the Administrative Agent, (e) with respect to the
Alliance Agreements, the Consent to Collateral Assignment of Contract Rights
dated as of the Closing Date among the Alliances, the Company and the
Administrative Agent, and (f) with respect to any other Material Contract, a
Consent to Collateral Assignment of Contract Rights among the parties to such
Material Contract and the Administrative Agent, as reasonably requested by the
Administrative Agent, substantially in the form of the Consents to Collateral
Assignment of Contract Rights referred to in clauses (b) - (e) above.
"Consolidated" shall mean, when used with reference to financial statements
or financial statement items of any Person and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Consolidated Cash Taxes" shall mean, for any period, with respect to any
Person and its Subsidiaries on a Consolidated basis, the aggregate of all taxes
for such period, to the extent the same are paid in cash during such period.
Except as otherwise provided herein, the applicable period shall be for the four
consecutive quarters ending as of the date of computation.
"Consolidated Current Assets" shall mean all amounts which would, in
conformity with GAAP, be set forth opposite the caption "total current assets"
(or any like caption) on a Consolidated balance sheet of any Person and its
Subsidiaries at such date, excluding cash and Cash Equivalents.
"Consolidated Current Liabilities" shall mean all amounts which would, in
conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a Consolidated balance sheet of any Person
and its Subsidiaries at such date, but excluding the current portion of any
Indebtedness (including accrued but unpaid interest) to the extent otherwise
included therein.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
plus, to the extent the following items are deducted in calculating Consolidated
Net Income, the sum of the following (without duplication): (i) Consolidated
Interest Expense, plus (ii) all provisions for any Federal, state, local and
foreign income, franchise, withholding, value added and similar taxes for such
period, plus (iii) depreciation, amortization and other non-cash charges for
such period, plus (iv) extraordinary losses for such period, minus (v)
extraordinary gains and interest income for such period, of any Person and its
Subsidiaries on a Consolidated basis.
"Consolidated Fixed Charges" shall mean, for any period, the sum of the
following (without duplication): (i) Consolidated Interest Expense for such
period plus (ii) Consolidated Scheduled Funded Debt Payments made during such
period plus (iii) Capital Expenditures for such period plus (iv) Consolidated
Cash Taxes for such period plus (v) cash dividends made during such period.
Except as otherwise provided herein, the applicable period shall be for the four
consecutive quarters ending as of the date of determination.
"Consolidated Interest Expense" shall mean, for any period, all interest
expense, including the interest component under Capital Leases, letters of
credit and Hedging Agreements for such period of any Person and its Subsidiaries
on a Consolidated basis; provided that, if the interest expense of the Parent is
included in any such calculation, only interest expense of the Parent that is
8
cash pay shall be taken into account for purposes of calculating Consolidated
Interest Expense. Except as otherwise provided herein, the applicable period
shall be for the four consecutive quarters ending as of the date of computation.
"Consolidated Net Income" shall mean, for any period, the net income of any
Person and its Subsidiaries on a Consolidated basis. Except as otherwise
provided herein, the applicable period shall be for the four consecutive
quarters ending as of the date of computation.
"Consolidated Net Worth" shall mean, on any date of determination, with
respect to any Person and its Subsidiaries on a Consolidated basis, all equity
contributions made in cash.
"Consolidated Scheduled Funded Debt Payments" shall mean, on any date of
determination, with respect to any Person and its Subsidiaries on a Consolidated
basis, the sum of all scheduled payments of principal on funded Indebtedness
made (including the principal component of payments due on Capital Leases)
during such period.
"Consolidated Working Capital" shall mean the excess of Consolidated
Current Assets on such date over Consolidated Current Liabilities on such date.
"Covered Population" shall mean the percentage of the population (based on
the most recent data released by the Census Bureau and/or Rand McNally or any
other source reasonably satisfactory to the Administrative Agent) residing in
geographic areas where the Borrowers have completed the construction of
facilities necessary to permit the Borrowers to provide PCS wireless services to
such areas.
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.
"Credit Facilities" shall mean the collective reference to the Revolving
Credit Facility, the LOC Facility, the Term Loan A Facility and the Term Loan B
Facility.
"Credit Party" shall mean any of the Borrowers or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Agreement, the Notes
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a filing of a petition of bankruptcy
under the Bankruptcy Code with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from any Credit Party
or any of its Subsidiaries to any Lender, or any Affiliate of a Lender, arising
under any Hedging Agreement relating to the Loans.
"Debt Issuance" shall mean the issuance of any Indebtedness for borrowed
money by the Credit Parties or any of their Subsidiaries (excluding any Equity
Issuance and any Indebtedness for borrowed money permitted to exist hereunder
pursuant to Section 9.1 hereof).
9
"Default" shall mean any of the events specified in Section 10.1, whether
or not any requirement for the giving of notice or the lapse of time, or both,
or any other condition, has been satisfied.
"Default Rate" shall have the meaning set forth in Section 3.5(b).
"Defaulting Lender" shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, (c) has been deemed insolvent or has become subject to a bankruptcy
or insolvency proceeding or to a receiver, trustee or similar official or (d)
has failed to perform any of its obligations under this Agreement or any other
Credit Document within the time specified herein or therein or, if no time is so
specified, within five (5) Business Days of notice by the Administrative Agent
of such failure to perform.
"Documentation Agent" shall have the meaning set forth in the first
paragraph of this Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office shown on Schedule 12.1; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrowers as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be made.
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Eligible Assignee" shall mean (i) a Lender; (ii) any Affiliate of a Lender
or any fund that invests in bank loans and is managed by an investment advisor
to a Lender; (iii) any bank, finance company, investment fund, insurance
company, or other financial or lending institution or entity having capital and
surplus in excess of $250,000,000; and (iv) any other institution approved by
the Administrative Agent and, so long as no Default or Event of Default shall
have occurred or be continuing, the Borrowers.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrowers or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrowers or any current or
former ERISA Affiliate.
"Environmental Laws" shall mean any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
10
liability or standards of conduct concerning protection of human health or the
environment, as are now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by a Credit Party or any of its
Subsidiaries to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants where the options or warrants are granted after the initial
Extensions of Credit made on the Funding Date or (c) any shares of its Capital
Stock pursuant to the conversion of any debt securities to equity. The term
"Equity Issuance" shall not include (i) any Asset Disposition, (ii) any Debt
Issuance, (iii) the Initial Equity Offering, (iv) any issuance of Capital Stock
of the Parent which is issued as a result of the exercise of warrants issued to
the holders of the Permitted Parent Debt in connection with the incurrence of
such Permitted Parent Debt by the Parent or (v) the issuance of Capital Stock
upon the exercise of warrants to be granted to Sprint pursuant to a contractual
obligation entered into prior to the Funding Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is part of the same controlled group, or under common control
with, the Borrowers, within the meaning of Code Sections 414(b), (c), (m), or
(o) and/or ERISA Section 4001(a)(14).
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section 10.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" shall mean, with respect to any fiscal year period of
the Borrowers for the Borrowers and their Subsidiaries on a Consolidated basis,
an amount equal to (a) Consolidated EBITDA for such period, minus (b) the sum of
(without duplication) (i) Capital Expenditures made during such period, plus
(ii) cash Consolidated Interest Expense paid, or accrued and payable, during
such period, plus (iii) Consolidated Cash Taxes paid, or accrued and payable,
during such period, plus (iv) Consolidated Scheduled Funded Debt Payments made
during such period, plus (v) the Net Change in Working Capital for such period
(excluding any increase in cash or Cash Equivalents above an increase deemed in
good faith by the Company to be necessary or desirable for the operation of the
business of the Credit Parties and their Subsidiaries).
"Existing Shareholders" shall mean Apollo Management, Horizon Telecom, Inc.
and its direct and indirect shareholders on the Closing Date and, as to any such
shareholder that is a natural person, (a) such person's spouse, parents and
11
descendants (whether by blood or adoption, and including stepchildren) and the
spouses of any of such natural persons and (b) any corporation, partnership,
trust or other Person in which no one has any interest (directly or indirectly)
except for any of such natural person, spouse, parents and descendants (whether
by blood or adoption, and including stepchildren) and the spouses of any of such
natural persons.
"Extension of Credit" shall mean, as to any Lender, the making of a Loan by
such Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the Federal government administering the
Communications Act.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean that certain letter agreement dated as of July 7,
2000 addressed to the Borrowers from First Union and the Arranger, as amended,
modified or otherwise supplemented.
"First Union" shall mean First Union National Bank, a national banking
association.
"Fiscal Year" shall mean the fiscal year of the Parent or the Company, as
the context may require.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Fixed Charges.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funding Date" shall mean the date upon which the conditions set forth in
Section 4.3 shall have been satisfied.
"GAAP" shall mean generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however, to the
provisions of Section 1.3.
"Government Acts" shall have the meaning set forth in Section 2.3(h).
"Governmental Approvals" shall mean all authorizations, consents,
approvals, permits, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities, including without limitation all
Communications Licenses.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" shall have the meaning set forth in the first paragraph of this
Agreement.
12
"Guaranty" shall mean the guaranty given by the Guarantors as set forth in
Article XIII.
"Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements or similar agreements or arrangements) for the benefit of any holder
of Indebtedness of such other Person, (iii) to lease or purchase assets,
securities or services primarily for the purpose of assuring the holder of such
Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such
Indebtedness against loss in respect thereof. The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.
"Hazardous Materials" shall mean any substance, material or waste defined
as toxic or hazardous or regulated in or under any Environmental Laws.
"Hedging Agreements" shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"Horizon Services" shall mean Horizon Services, Inc., an Ohio corporation.
"Horizon Services Agreement" shall mean that certain Services Agreement
dated as of May 1, 2000 among Horizon Services and the Borrowers.
"Indebtedness" shall mean, with respect to any Person, the sum of the
following determined on a Consolidated basis, without duplication, in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money,
including, but not limited to, obligations evidenced by bonds, debentures, notes
or other similar instruments, (b) all obligations to pay the deferred purchase
price of property or services, including, but not limited to, all obligations
under non-competition agreements, except trade payables arising in the ordinary
course of business not more than ninety (90) days past due, (c) all obligations
as lessee under Capital Leases, (d) all indebtedness of any other Person secured
by a Lien on any asset of any such first Person, (e) all Guaranty Obligations,
(f) all obligations, contingent or otherwise, relative to the face amount of
letters of credit, whether or not drawn and banker's acceptances, (g) all
13
obligations to redeem, repurchase, exchange, defease or otherwise make payments
in respect of Capital Stock or other securities, except to the extent that such
obligations are, by their terms, subordinate to the repayment in full of the
Credit Party Obligations and such Capital Stock or other securities are not
subject to the exercise of any redemption, repurchase, exchange, defeasance or
other payment rights in respect thereof prior to the repayment in full of the
Credit Party Obligations; provided, however, for purposes hereof, preferred
stock constituting the Initial Equity Offering shall be excluded from the
calculation of Indebtedness hereunder, and (h) all termination payments which
would be due and payable pursuant to any hedging agreement.
"Initial Equity Offering" shall mean (a) the private equity offering of
Series A Convertible Preferred Stock and Series A-1 Convertible Preferred Stock
of the Parent in an aggregate amount of not less than $126,500,000 and (b) the
initial public offering of the common stock of the Parent.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan,
the last day of each March, June, September and December and on the applicable
Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any LIBOR
Rate Loan having an Interest Period longer than three months, each day which is
three months after the first day of such Interest Period and the last day of
such Interest Period.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Company in the Notice of Borrowing or Notice of Conversion given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months thereafter, as selected by the
Company by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the relevant calendar month;
14
(C) if the Company shall fail to give notice as provided above,
the Company shall be deemed to have selected an Alternate Base Rate
Loan to replace the affected LIBOR Rate Loan;
(D) no Interest Period shall extend beyond the applicable
Maturity Date and, further with regard to the Term Loans, no Interest
Period shall extend beyond any principal amortization payment date
unless the portion of such Term Loan consisting of Alternate Base Rate
Loans together with the portion of such Term Loan consisting of LIBOR
Rate Loans with Interest Periods expiring prior to or concurrently
with the date such principal amortization payment date is due, is at
least equal to the amount of such principal amortization payment due
on such date; and
(E) no more than six (6) LIBOR Rate Loans may be in effect at any
time. For purposes hereof, LIBOR Rate Loans with different Interest
Periods shall be considered as separate LIBOR Rate Loans, even if they
shall begin on the same date and have the same duration, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new LIBOR Rate Loan with a single Interest Period.
"Issuing Lender" shall mean First Union.
"Issuing Lender Fees" shall have the meaning set forth in Section 3.1(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 7.12, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 7.12.
"Lead Arranger" shall mean First Union Securities, Inc.
"Lender" shall have the meaning set forth in the first paragraph of this
Agreement.
"Letters of Credit" shall mean any letter of credit issued by the Issuing
Lender for the account of a Borrower pursuant to the terms hereof, as such
Letters of Credit may be amended, modified, extended, renewed or replaced from
time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section 3.1(b).
"Leverage Ratio" shall have the meaning set forth in Section 8.2(a).
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
15
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. (London
time) two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 12.1; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Company as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to which
is based on the LIBOR Rate.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loan" shall mean a Revolving Loan, a Swingline Loan, the Term Loan A
and/or the Term Loan B, as appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 12.10.
"LOC Committed Amount" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.3 and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a).
16
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum (without duplication) of
(i) the maximum amount which is, or at any time thereafter may become, available
to be drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus (ii)
the aggregate amount of all drawings under Letters of Credit honored by the
Issuing Lender but not theretofore reimbursed.
"Management Agreement Breach" shall have the meaning assigned to such term
in each Consent as in effect on the Closing Date.
"Mandatory Borrowing" shall have the meaning set forth in Section
2.2(b)(ii) or Section 2.3(e), as the context may require.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations, or condition
(financial or otherwise) of the Credit Parties and their Subsidiaries taken as a
whole, (b) the ability of the Credit Parties, to perform their obligations, when
such obligations are required to be performed, under this Agreement, any of the
Notes or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder.
"Material Contract" shall mean (a) the Sprint Agreements, (b) the Horizon
Services Agreement, (c) the Supply Agreement, (d) the Alliance Agreements, (e)
the SBA Agreements and (f) any other written contract or other written
arrangement to which a Credit Party or any of its Subsidiaries is a party as to
which the breach, nonperformance, cancellation or failure to renew by any party
thereto could reasonably be expected to have a Material Adverse Effect.
"Materials of Environmental Concern" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
17
"Maturity Date" shall mean (i) with respect to Revolving Loans, Swingline
Loans and the Term Loan A, the Revolving Commitment Termination Date and (ii)
with respect to the Term Loan B, the Term Loan B Maturity Date.
"Moody's" shall mean Moody's Investors Service, Inc. and its successors and
assigns.
"Mortgage" shall mean a mortgage, deed of trust or deed to secure debt
executed by a Credit Party in favor of the Administrative Agent, on behalf of
the Lenders, and encumbering such Credit Party's fee interest in the real
property asset that is the subject matter thereof.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by a
Credit Party or any of its Subsidiaries in respect of any Asset Disposition,
Equity Issuance, Debt Issuance or Recovery Event, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) in connection therewith, (b) the principal amount of
Indebtedness which is secured by any such asset (other than Indebtedness assumed
by the purchaser of such asset) and which is required to be, and is, repaid in
connection with the sale or disposition thereof (other than Indebtedness
outstanding hereunder) and (c) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received by a Credit Party or any of its Subsidiaries in any Asset Disposition,
Equity Issuance, Debt Issuance or Recovery Event.
"Net Change in Working Capital" shall mean, with respect to any Person and
its Subsidiaries for any period, (a) Consolidated Working Capital as of the last
Business Day of such period less (b) Consolidated Working Capital as of the
Business Day immediately prior to the first Business Day of such period.
"Network" shall mean the wireless PCS telecommunications network to be
operated and managed by the Borrowers and their Subsidiaries pursuant to the
Sprint Management Agreements.
"Note" or "Notes" shall mean the Revolving Notes, the Swingline Note, the
Term Loan A Notes and/or the Term Loan B Notes, collectively, separately or
individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion" shall mean the written notice of extension or
conversion as referenced and defined in Section 3.6.
"Parent" shall have the meaning set forth in the first paragraph of this
Agreement.
18
"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section 2.2(b)(ii) or
in Letters of Credit as provided in Section 2.3.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PCS" shall mean personal communications services.
"PCS License" shall mean the PCS license(s) issued by the FCC described on
the Service Area Exhibit to the Sprint Management Agreements.
"PCS Subscribers" shall mean the total number of subscribers to the
services of the Borrowers and their Subsidiaries; provided, however, for
purposes of Section 8.1(f), PCS Subscribers shall not include any subscriber as
of such date which has any amounts owing to the Borrowers or any of their
Subsidiaries which are past due for more than 60 days or past due for more than
such shorter period of time as the Borrowers may have established for accounting
or credit policy purposes for treating a subscriber as not being in good
standing.
"Pension Plan" shall mean any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the Company
or any ERISA Affiliates or (b) has at any time within the preceding six years
been maintained for the employees of the Company or any of their current or
former ERISA Affiliates.
"Permitted Liens" shall have the meaning set forth in Section 9.3.
"Permitted Parent Debt" shall have the meaning set forth in Section 9.1(c).
"Permitted Parent Debt Documents" shall mean that certain Indenture dated
as of September 26, 2000 among the Parent, the Subsidiaries of the Parent party
thereto, as guarantors and Wells Fargo Bank, a national banking association, as
Trustee and those certain Notes dated as of September 26, 2000 issued by the
Parent in connection therewith and all other documents executed pursuant
thereto, and all exchange notes issued pursuant to the Indenture, in each case
in form and substance satisfactory to the Lenders as of the Closing Date and as
from time to time amended, restated, supplemented or otherwise modified in
accordance with Section 9.11 herein.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the Closing
Date given by the Parent, the Borrowers and the other Credit Parties to the
Administrative Agent, as the same may from time to time be amended, supplemented
or otherwise modified in accordance with the terms hereof and thereof.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
19
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PUC" shall mean any state, provincial or other local regulatory agency or
body that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any telecommunications network facility or over
Persons who own, construct or operate a telecommunications network facility or
any such system, in each case by reason of the nature or type of the business
subject to regulation and not pursuant to laws and regulations of general
applicability to Persons conducting business in any such jurisdiction.
"PUC Authorizations" shall mean all applications, filings, reports,
documents, recordings and registrations with, and all validations, exemptions,
franchises, waivers, approvals, orders or authorizations, consents, licenses,
certificates and permits from, any PUC.
"Recovery Event" shall mean the receipt by a Credit Party or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"Register" shall have the meaning set forth in Section 12.10(d).
"Reimbursement Obligation" shall mean the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 2.3(d) for amounts drawn under
Letters of Credit.
"Reorganization" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Required Lenders" shall mean Lenders holding in the aggregate more than
50% of (a) all Revolving Loans and LOC Obligations then outstanding at such time
plus (b) the aggregate unused Revolving Commitments at such time (treating for
purposes hereof in the case of Swingline Loans and LOC Obligations, in the case
of the Swingline Lender and the Issuing Lender, only the portion of the
Swingline Loans and the LOC Obligations of the Swingline Lender and the Issuing
Lender, respectively, which is not subject to the Participation Interests of the
other Lenders and, in the case of the Lenders other than the Swingline Lender
and the Issuing Lender, the Participation Interests of such Lenders in Swingline
Loans and LOC Obligations hereunder as direct obligations) plus (c) all Term
Loans then outstanding at such time; provided, however, if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders, Credit Party Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender's Commitments, or after termination of the Commitments, the principal
balance of the Credit Party Obligations owing to such Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
20
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Responsible Officer" shall mean, as to any Credit Party, the President,
Chief Executive Officer, Secretary, Treasurer or Chief Financial Officer
thereof.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified in Schedule 2.1(a), as such amount may be increased or reduced from
time to time in accordance with the provisions hereof. The aggregate Revolving
Commitment of all Lenders on the Closing Date shall be $75,000,000.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 12.10.
"Revolving Commitment Termination Date" shall mean September 26, 2008.
"Revolving Committed Amount" shall mean, collectively, the aggregate amount
of all Revolving Commitments as referenced in Section 2.1(a), as such amount may
be reduced from time to time in accordance with the provisions hereof, and,
individually, the amount of each Lender's Revolving Commitment as specified on
Schedule 2.1(a).
"Revolving Credit Facility" shall mean the revolving credit facility
established pursuant to Article II hereof.
"Revolving Loans" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes of
the Borrowers in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc. and its successors and assigns.
"SBA Agreements" shall mean collectively (a) the Site Development Agreement
by and between the Company and SBA Towers, Inc., dated August 17, 1999, (b) the
Master Site Agreement by and between the Company and SBA Towers, Inc., dated
August 17, 1999, (c) the Master Design Build Agreement by and between the
Company and SBA Towers, Inc., dated August 17, 1999, (d) the Master Site
Agreement by and between Bright and SBA Towers, Inc., dated October 1, 1999 and
(e) the Master Design Build Agreement by and between Bright and SBA Towers,
Inc., dated October 1, 1999.
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"Security Agreement" shall mean the Security Agreement dated as of the
Closing Date given by the Borrowers and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Collateral Assignments of Contract Rights, the Consents and such
other documents executed and delivered in connection with the attachment and
perfection of the Administrative Agent's security interests and Liens arising
thereunder, including, without limitation, UCC financing statements and patent
and trademark filings.
"Senior Debt" shall mean, as of any date of determination for the Borrowers
and their Subsidiaries, all Indebtedness (including, without limitation,
Extensions of Credit hereunder) which is not subordinate in right of payment to
the Credit Party Obligations.
"Single Employer Plan" shall mean any Pension Plan which is not a
Multiemployer Plan.
"Solvent" shall mean, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage, (d)
the fair value of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (e) the present fair saleable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Specified Sales" shall mean (a) the sale, transfer, lease, license or
other disposition of inventory, materials, accessories and/or other property
(including Intellectual Property) in the ordinary course of business and (b) the
sale, transfer or other disposition of Cash Equivalents.
"Sprint Agreements" shall mean the Sprint Management Agreements, the Sprint
Services Agreements, the Sprint License Agreements and all other contracts,
agreements or understandings entered into between the Borrowers or any other
Credit Party on the one hand and Sprint Corporation or any of its Affiliates, on
the other hand.
"Sprint Consent" shall mean, with respect to the Sprint Agreements, the
Consent and Agreement dated as of the Closing Date among Sprint Spectrum L.P.,
SprintCom, Inc., Sprint Communications Company, L.P., WirelessCo, L.P., the
Administrative Agent and the Borrowers.
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"Sprint License Agreements" shall mean, collectively, (a) the Sprint
Trademark and Service Mark License Agreement (license of "Sprint", diamond logo,
"Sprint PCS" and "Sprint Personal Communications"), dated June 8, 1998, between
Sprint Communications Company, L.P. and the Company, (b) the Sprint Spectrum
Trademark and Service Mark License Agreement (license of "The Clear Alternative
to Cellular" and "Experience the Clear Alternative to Cellular Today"), dated
June 8, 1998, between Sprint Spectrum, L.P. and the Company, (c) the Sprint
Trademark and Service Mark License Agreement (license of "Sprint", diamond logo,
"Sprint PCS" and "Sprint Personal Communications"), dated October 13, 1999,
between Sprint Communications Company, L.P. and Bright, and (d) the Sprint
Spectrum Trademark and Service Mark License Agreement (license of "The Clear
Alternative to Cellular" and "Experience the Clear Alternative to Cellular
Today"), dated October 13, 1999, between Sprint Spectrum, L.P. and Bright, as
each of the foregoing may be amended and modified from time to time.
"Sprint Management Agreements" shall mean (i) that certain Sprint PCS
Management Agreement between Sprint Spectrum L.P., SprintCom, Inc. and the
Company dated June 8, 1998, as amended by Addendum I dated June 8, 1998, as
further amended by Addendum II dated August 12, 1999, as further amended by
Addendum III dated May 19, 2000 and (ii) that certain Sprint PCS Management
Agreement between WirelessCo, L.P., SprintCom, Inc., Sprint Spectrum L.P. and
Bright dated October 13, 1999, as amended by Addendum I dated October 13, 1999,
as further amended by Addendum II dated April 28, 2000, as each of the foregoing
may be further amended or modified from time to time.
"Sprint PCS" shall mean any or all of the foregoing related parties who are
PCS License holders or signatories to any Sprint Agreement: Sprint Spectrum,
L.P., a Delaware limited partnership, SprintCom, Inc., a Kansas corporation,
Sprint Communications Company, L.P., a Delaware limited partnership, and
WirelessCo, L.P., a Delaware limited partnership.
"Sprint PCS Network" shall mean the national wireless network and business
activities to be developed by Sprint PCS, the Borrowers and certain other
parties in the United States and certain of its territories and possessions.
"Sprint PCS Products and Services" shall mean all types and categories of
wireless communications services and associated products that are designated by
Sprint PCS (whether now existing or developed and implemented in the future) as
products and services to be offered by Sprint PCS, the Borrowers and other
Sprint-related parties as the products and services of the Sprint PCS Network
for fixed and mobile voice, short message and other data services under the
FCC's rules for broadband personal communications services, including all local
area service plans. Sprint PCS Products and Services do not include wireline
products services, including local exchange service, wireline long distance
service, and wireline-based Internet access.
"Sprint Services Agreement" shall mean that (a) certain Sprint PCS Services
Agreement dated June 8, 1998 between the Company and Sprint Spectrum L.P. and
any documents incorporated by reference in such agreement and (b) that certain
Sprint PCS Services Agreement dated October 13, 1999 between Bright and Sprint
Spectrum L.P. and any documents incorporated by reference in such agreement.
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"Stage 1 Covenant Period" shall mean the period commencing with the Closing
Date and ending on the day immediately prior to the first day of the Stage 2
Covenant Period.
"Stage 2 Covenant Period" shall mean the period commencing on April 1, 2004
and ending on the Term Loan B Maturity Date.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrowers.
"Supply Agreement" shall mean that certain Purchase and Sale Agreement
between the Company and Motorola, Inc. dated as of May 2, 1997, as amended,
supplemented or modified from time to time.
"Swingline Commitment" shall mean the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding up
to the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in Section
2.2(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.2(a).
"Swingline Lender" shall mean First Union, in its capacity as such.
"Swingline Loan" or "Swingline Loans" shall have the meaning set forth in
Section 2.2(a).
"Swingline Note" shall mean the promissory note of the Borrowers in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.2(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Syndication Agent" shall have the meaning set forth in the first paragraph
of this Agreement.
"Taxes" shall have the meaning set forth in Section 3.14.
"Term Loan A" shall have the meaning set forth in Section 2.4(a).
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"Term Loan A Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan A in a principal
amount equal to such Lender's Term Loan A Commitment Percentage of the Term Loan
A Committed Amount (and for purposes of making determinations of Required
Lenders hereunder after the Closing Date, the principal amount outstanding on
the Term Loan A).
"Term Loan A Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan A Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 12.10.
"Term Loan A Committed Amount" shall have the meaning set forth in Section
2.4(a).
"Term Loan A Facility" shall mean the term loan facility established
pursuant to Article III hereof.
"Term Loan A Installment" shall have the meaning set forth in Section
2.4(c).
"Term Loan A Note" or "Term Loan A Notes" shall mean the promissory notes
of the Borrowers in favor of each of the Lenders evidencing the portion of the
Term Loan A provided pursuant to Section 2.4(d), individually or collectively,
as appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Term Loan B" shall have the meaning set forth in Section 2.5(a).
"Term Loan B Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan B in a principal
amount equal to such Lender's Term Loan B Commitment Percentage of the Term Loan
B Committed Amount (and for purposes of making determinations of Required
Lenders hereunder after the Closing Date, the principal amount outstanding on
the Term Loan B).
"Term Loan B Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan B Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 12.10.
"Term Loan B Committed Amount" shall have the meaning set forth in Section
2.5(a).
"Term Loan B Facility" shall mean the term loan facility established
pursuant to Article III hereof.
"Term Loan B Maturity Date" shall mean March 31, 2009.
"Term Loan B Note" or "Term Loan B Notes" shall mean the promissory notes
of the Borrowers in favor of each of the Lenders evidencing the portion of the
Term Loan B provided pursuant to Section 2.5(c), individually or collectively,
25
as appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.
"Term Loans" shall mean a collective reference to the Term Loan A and the
Term Loan B.
"Termination Event" shall mean: (a) a "Reportable Event" described in
Section 4043 of ERISA, or (b) the withdrawal of a Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of a Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 512 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"3.14 Certificate" shall have the meaning set forth in Section 3.14.
"Total Capitalization" shall mean, as of any date of determination, the sum
of Total Debt plus Consolidated Net Worth.
"Total Debt" shall mean, as of any date of determination, all Indebtedness
of any Person and its Subsidiaries on a Consolidated basis.
"Total Revenues" shall mean, for any period, total consolidated customer
revenues of the Borrowers less any portion of such revenues derived from
equipment sales for such period.
"Tranche" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"Wholly-Owned" shall mean, with respect to a Subsidiary, that all of the
shares of Capital Stock of such Subsidiary are, directly or indirectly, owned or
controlled by a Credit Party and/or one or more of its Wholly-Owned
Subsidiaries.
26
SECTION 1.2 GENERAL.
Unless otherwise specified, a reference in this Agreement to a particular
section, subsection, Schedule or Exhibit is a reference to that section,
subsection, Schedule or Exhibit of this Agreement. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter. Any
reference herein to "Charlotte, North Carolina time" shall refer to the
applicable time of day in Charlotte, North Carolina.
SECTION 1.3 OTHER DEFINITIONS AND PROVISIONS.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings
when used in this Agreement, the Notes and the other Credit Documents or
any certificate, report or other document made or delivered pursuant to
this Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
CREDIT FACILITIES
SECTION 2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrowers from time to time for the
purposes hereinafter set forth; provided, however, that (i) with regard to
each Lender individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's Revolving Commitment Percentage of
Swingline Loans plus such Lender's LOC Commitment Percentage of LOC
Obligations shall not exceed such Lender's Revolving Commitment Percentage
of the aggregate Revolving Committed Amount and (ii) with regard to the
Lenders collectively, the sum of the aggregate amount of outstanding
Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed
the aggregate Revolving Committed Amount then in effect. For purposes
hereof, the aggregate amount available hereunder shall be SEVENTY-FIVE
MILLION DOLLARS ($75,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.2, the "Revolving
Committed Amount"). Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrowers may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.
27
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Company may request a Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Administrative Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) on the
third Business Day prior to the date of the requested borrowing. Each
such request for borrowing shall be irrevocable and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal
amount to be borrowed and (D) whether the borrowing shall be comprised
of Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest Period(s)
therefor. A form of Notice of Borrowing (a "Notice of Borrowing") is
attached as Schedule 2.1(b)(i). If the Company shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest Period in
the case of a LIBOR Rate Loan, then such notice shall be deemed to be
a request for an Interest Period of one month, or (II) the type of
Revolving Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The Administrative
Agent shall give notice to each Lender promptly upon receipt of each
Notice of Borrowing, the contents thereof and each such Lender's share
thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be in a
minimum aggregate amount of (A) for Revolving Loans made as LIBOR Rate
Loans, $2,000,000 and integral multiples of $500,000 in excess thereof
or (B) for Revolving Loans made as Alternate Base Rate Loans, $500,000
and integral multiples of $250,000 in excess thereof (or the remaining
amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the
Administrative Agent, for the account of the Borrowers, at the
Administrative Agent's Office or at such other office as the
Administrative Agent may designate in writing by 1:00 P.M. (Charlotte,
North Carolina time) on the date specified in the applicable Notice of
Borrowing in Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to
the Borrowers by the Administrative Agent by crediting the account of
the Borrowers on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and
in like funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date.
(d) Revolving Notes. Each Lender's Revolving Commitment Percentage of
the Revolving Loans shall be evidenced by a duly executed
promissory note of the Borrowers to such Lender in substantially the form
of Schedule 2.1(d).
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SECTION 2.2 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrowers
(each a "Swingline Loan" and, collectively, the "Swingline Loans") for the
purposes hereinafter set forth; provided, however, (i) the aggregate amount
of Swingline Loans outstanding at any time shall not exceed TEN MILLION
DOLLARS ($10,000,000) (the "Swingline Committed Amount"), and (ii) the sum
of the aggregate amount of outstanding Revolving Loans plus Swingline Loans
plus LOC Obligations shall not exceed the aggregate Revolving Committed
Amount then in effect. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Swingline Lender
will make Swingline Loans available to the Borrowers on any Business
Day upon a request made by the Company not later than 12:00 Noon
(Charlotte, North Carolina time) on such Business Day. A notice of
request for Swingline Loan borrowing shall be made in the form of
Schedule 2.1(b)(i) with appropriate modifications. Swingline Loan
borrowings hereunder shall be made in minimum amounts of $250,000 and
in integral amounts of $50,000 in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing
shall be due and payable on the Maturity Date. The Swingline Lender
may, at any time, in its sole discretion, by written notice to the
Company and the Administrative Agent, demand repayment of its
Swingline Loans by way of a Revolving Loan borrowing, in which case
the Borrowers shall be deemed to have requested a Revolving Loan
borrowing comprised entirely of Alternate Base Rate Loans in the
amount of such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed to have
been given one Business Day prior to each of (A) the Maturity Date,
(B) the occurrence of any Event of Default described in Section
10.1(j) or (k), (C) upon acceleration of the Credit Party Obligations
hereunder, whether on account of an Event of Default described in
Section 10.1(j) or (k) or any other Event of Default, and (D) the
exercise of remedies in accordance with the provisions of Section 10.2
hereof (each such Revolving Loan borrowing made on account of any such
deemed request therefor as provided herein being hereinafter referred
to as a "Mandatory Borrowing"). Each Lender hereby irrevocably agrees
to make such Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the same such
date notwithstanding (I) the amount of such Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (II) whether any conditions specified in
Section 4.4 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or deemed
29
request for Revolving Loans to be made by the time otherwise required
in Section 2.1(b)(i), (V) the date of such Mandatory Borrowing, or
(VI) any reduction in the Revolving Committed Amount or termination of
the Revolving Commitments immediately prior to such Mandatory
Borrowing or contemporaneously therewith. In the event that any
Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with
respect to either Borrower), then each Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrowers on or after such date and prior to such purchase) from
the Swingline Lender such participations in the outstanding Swingline
Loans as shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its respective Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 10.2), provided that (x) all interest
payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective
participation is purchased, and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay to the Swingline Lender
interest on the principal amount of such participation purchased for
each day from and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of payment for
such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section
3.5, Swingline Loans shall bear interest at a per annum rate equal to the
Alternate Base Rate plus the Applicable Percentage for Revolving Loans that
are Alternate Base Rate Loans. Interest on Swingline Loans shall be payable
in arrears on each Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrowers to the Swingline Lender in the
original amount of the Swingline Committed Amount and substantially in the
form of Schedule 2.2(d).
SECTION 2.3 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the Issuing
Lender may reasonably require consistent with customary practice at such
time, during the Commitment Period the Issuing Lender shall issue, and the
Lenders shall participate in, Letters of Credit for the account of either
Borrower from time to time upon request in a form acceptable to the Issuing
Lender; provided, however, that (i) the aggregate amount of LOC Obligations
shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the "LOC
30
Committed Amount"), (ii) the sum of the aggregate amount of Revolving Loans
plus Swingline Loans plus LOC Obligations shall not at any time exceed the
aggregate Revolving Committed Amount then in effect, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit
shall be issued for other lawful corporate purposes and may be issued as
standby letters of credit, including in connection with workers'
compensation and other insurance programs. Except as otherwise expressly
agreed upon by all the Lenders, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has occurred
and is continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on the
request of a Borrower or by operation of the terms of the applicable Letter
of Credit to a date not more than twelve (12) months from the date of
extension; provided, further, that no Letter of Credit, as originally
issued or as extended, shall have an expiry date extending beyond the
Revolving Commitment Termination Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each Letter
of Credit shall be a Business Day. Any Letters of Credit issued hereunder
shall be in a minimum original face amount of $500,000 or such other amount
as agreed to by the Administrative Agent and a Borrower. First Union shall
be the Issuing Lender on all Letters of Credit issued after the Closing
Date.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5) Business
Days prior to the requested date of issuance. The Issuing Lender will
promptly upon request provide to the Administrative Agent for dissemination
to the Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which may
have occurred since the date of any prior report, and including therein,
among other things, the account party, the beneficiary, the face amount,
expiry date as well as any payments or expirations which may have occurred.
The Issuing Lender will further provide to the Administrative Agent
promptly upon request copies of the Letters of Credit. The Issuing Lender
will provide to the Administrative Agent promptly upon request a summary
report of the nature and extent of LOC Obligations then outstanding.
(c) Participations. Each Lender upon issuance of a Letter of Credit
(or, in the case of each Existing Letter of Credit, on the Closing Date),
shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, in each case in an
amount equal to its LOC Commitment Percentage of the obligations under such
Letter of Credit and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to
the Issuing Lender therefor and discharge when due, its LOC Commitment
Percentage of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any LOC Document, each such Lender shall pay to
the Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender
of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender
31
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrowers to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided. Each
Existing Letter of Credit shall be deemed for all purposes of this
Agreement and the other Credit Documents to be a Letter of Credit.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrowers and the
Administrative Agent. The Borrowers shall reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (with the proceeds of a
Swingline Loan or a Revolving Loan obtained hereunder or otherwise) in same
day funds as provided herein or in the LOC Documents. If the Borrowers
shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at the Default
Rate. Unless the Borrowers shall immediately notify the Issuing Lender and
the Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Borrowers shall be deemed to have requested a Revolving Loan in
the amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the reimbursement obligations.
The Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
set-off, counterclaim or defense to payment the Borrowers may claim or have
against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrowers to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit; provided, however, that the
Borrowers (or any other Credit Party) shall not be obligated to reimburse
the Issuing Lender or other Lender for any payment or indemnify the Issuing
Lender or other Lender for any wrongful dishonor or any other matter to the
extent resulting from acts or omissions constituting gross negligence or
willful misconduct by the Issuing Lender or such other Lender. The Issuing
Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and
in immediately available funds, the amount of such Lender's LOC Commitment
Percentage of such unreimbursed drawing; provided, however, that such
Lender shall not be obligated to reimburse the Issuing Lender or other
Lender for any payment or indemnify the Issuing Lender or other Lender for
any wrongful dishonor or any other matter to the extent resulting from acts
or omissions constituting gross negligence or willful misconduct by such
Issuing Lender or any other Lender. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina time),
otherwise such payment shall be made at or before 12:00 Noon (Charlotte,
North Carolina time) on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the Issuing
Lender in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such
Lender pays such amount to the Issuing Lender in full at a rate per annum
equal to, if paid within two (2) Business Days of the date of drawing, the
32
Federal Funds Effective Rate and thereafter at a rate equal to the
Alternate Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or Event
of Default or the acceleration of the Credit Party Obligations hereunder
and shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which a Borrower
shall have requested, or been deemed to have requested, a Revolving Loan to
reimburse a drawing under a Letter of Credit, the Administrative Agent
shall give notice to the Lenders that a Revolving Loan has been requested
or deemed requested in connection with a drawing under a Letter of Credit,
in which case a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made (without giving effect to any termination of the
Commitments pursuant to Section 10.2) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 10.2) and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the applicable LOC Obligations. Each Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 4.4 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required in Section
2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any reduction in
the Revolving Committed Amount after any such Letter of Credit may have
been drawn upon. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to a Borrower), then each such Lender hereby
agrees that it shall forthwith fund (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from
a Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its Participation
Interest on the day the Mandatory Borrowing would otherwise have occurred,
then the amount of such Lender's unfunded Participation Interest therein
shall bear interest payable to the Issuing Lender upon demand, at the rate
equal to, if paid within two (2) Business Days of such date, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Alternate Base
Rate.
(f) Modification, Extension. The issuance of any renewal or extension
to any Letter of Credit or any supplement, modification or amendment in the
nature of a renewal or extension thereof shall, for purposes hereof, be
treated in all respects the same as the issuance of a new Letter of Credit
hereunder.
33
(g) Uniform Customs and Practices/International Standby Practices
1998. The Issuing Lender shall have the Letters of Credit be subject to The
Uniform Customs and Practice for Documentary Credits (the "UCP") or the
International Standby Practices 1998 (the "ISP98"), in either case as
published as of the date of issue by the International Chamber of Commerce,
in which case the UCP or the ISP98, as applicable, may be incorporated
therein and deemed in all respects to be a part thereof.
(h) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.3,
the Borrowers hereby jointly and severally agree to pay, and protect,
indemnify and save each Lender harmless from and against, any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that such Lender may
incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or (B) the failure of such Lender
to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority (all such acts
or omissions, herein called "Government Acts").
(ii) As between the Borrowers and the Lenders (including the
Issuing Lender), the Borrowers shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (C) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or
not they be in cipher; (D) for any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under
a Letter of Credit or of the proceeds thereof; and (E) for any
consequences arising from causes beyond the control of such Lender,
including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by any Lender (including the Issuing Lender), under or in connection
with any Letter of Credit or the related certificates, if taken or
omitted in good faith, shall not put such Lender under any resulting
liability to the Borrowers or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be construed
34
and applied to protect and indemnify each Lender (including the
Issuing Lender) against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the
Borrowers (on behalf of themselves and each of the other Credit
Parties), including, without limitation, any and all Government Acts.
No Lender (including the Issuing Lender) shall, in any way, be liable
for any failure by such Lender or anyone else to pay any drawing under
any Letter of Credit as a result of any Government Acts or any other
cause beyond the control of such Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrowers contained in subsection (d)
above. The obligations of the Borrowers under this subsection (h)
shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Lenders (including
the Issuing Lender) to enforce any right, power or benefit under this
Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrowers shall have no obligation to indemnify
any Lender (including the Issuing Lender) in respect of any liability
incurred by such Lender arising solely out of the gross negligence or
willful misconduct of such Lender, as determined by a court of
competent jurisdiction.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 4.4 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied.
(k) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
SECTION 2.4 TERM LOAN A.
(a) Term Loan A. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrowers from time to
time pursuant to Section 2.4(c), or such earlier date as the Term Loan A
Commitments shall have been terminated as provided herein, such Lender's
Term Loan A Commitment Percentage of a term loan in Dollars (the "Term Loan
A") in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS
($100,000,000) (the "Term Loan A Committed Amount") for the purposes
hereinafter set forth. The Term Loan A may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Company may
request. Amounts repaid on the Term Loan A may not be reborrowed.
35
(b) Repayment of Term Loan A. The principal amount of the Term Loan A
shall be repaid in eighteen (18) consecutive fiscal quarterly installments
as follows, unless accelerated sooner pursuant to Section 10.2:
PRINCIPAL AMORTIZATION PAYMENT TERM LOAN A PRINCIPAL
DATES AMORTIZATION PAYMENT
-------------------------------- ------------------------------
June 30, 2004 $2,500,000
-------------------------------- ------------------------------
September 30, 2004 $2,500,000
-------------------------------- ------------------------------
December 31, 2004 $2,500,000
-------------------------------- ------------------------------
March 31, 2005 $2,500,000
-------------------------------- ------------------------------
June 30, 2005 $5,000,000
-------------------------------- ------------------------------
September 30, 2005 $5,000,000
-------------------------------- ------------------------------
December 31, 2005 $6,250,000
-------------------------------- ------------------------------
March 31, 2006 $6,250,000
-------------------------------- ------------------------------
June 30, 2006 $6,250,000
-------------------------------- ------------------------------
September 30, 2006 $6,250,000
-------------------------------- ------------------------------
December 31, 2006 $6,250,000
-------------------------------- ------------------------------
March 31, 2007 $6,250,000
-------------------------------- ------------------------------
June 30, 2007 $6,250,000
-------------------------------- ------------------------------
September 30, 2007 $6,250,000
-------------------------------- ------------------------------
December 31, 2007 $7,500,000
-------------------------------- ------------------------------
March 31, 2008 $7,500,000
-------------------------------- ------------------------------
June 30, 2008 $7,500,000
-------------------------------- ------------------------------
Revolving Commitment $7,500,000
Termination Date
-------------------------------- ------------------------------
(c) Borrowing Procedures. The Term Loan A may be drawn down by the
Borrower in increments of $5,000,000 (each a "Term Loan A Installment") at
any time or from time to time until the date that is eighteen (18) months
after the Closing Date. The Company may request a Term Loan A Installment
by submitting a written Notice of Borrowing (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina
36
time) on the third Business Day prior to the date of the requested Term
Loan A Installment. Each such request for a Term Loan A Installment shall
be irrevocable and shall specify (A) that a Term Loan A Installment is
requested, (B) the date of the requested Term Loan A Installment (which
shall be a Business Day), (C) the aggregate principal amount of the Term
Loan A Installment and (D) whether the Term Loan A Installment shall be
comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination
thereof, and if LIBOR Rate Loans are requested, the Interest Period(s)
therefor. Each Lender will make its Term Loan A Commitment Percentage of
each Term Loan A Installment available to the Administrative Agent, for the
account of the Borrowers, at the Administrative Agent's Office or at such
other office as the Administrative Agent may designate in writing by 1:00
P.M. (Charlotte, North Carolina time) on the date of such Term Loan A
Installment in Dollars and in funds immediately available to the
Administrative Agent. Such Term Loan A Installment will then be made
available to the Borrowers by the Administrative Agent by crediting the
account of the Borrowers on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and
in like funds as received by the Administrative Agent.
(d) Term Loan A Notes. Each Lender's Term Loan A Commitment Percentage
of the Term Loan A Committed Amount shall be evidenced by a duly executed
promissory note of the Borrowers to such Lender in substantially the form
of Schedule 2.4(d).
SECTION 2.5 TERM LOAN B.
(a) Term Loan B. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrowers on the Funding
Date such Lender's Term Loan B Commitment Percentage of a term loan in
Dollars (the "Term Loan B") in the aggregate principal amount of FIFTY
MILLION DOLLARS ($50,000,000) (the "Term Loan B Committed Amount") for the
purposes hereinafter set forth. The Term Loan B may consist of Alternate
Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Company may request. Amounts repaid on the Term Loan B may not be
reborrowed. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
(b) Repayment of Term Loan B. The principal amount of the Term Loan B
shall be repaid in twenty (20) consecutive fiscal quarterly installments as
follows, unless accelerated sooner pursuant to Section 10.2:
================================ ==============================
PRINCIPAL AMORTIZATION PAYMENT TERM LOAN B PRINCIPAL
DATES AMORTIZATION PAYMENT
-------------------------------- ------------------------------
June 30, 2004 $125,000
-------------------------------- ------------------------------
September 30, 2004 $125,000
-------------------------------- ------------------------------
37
================================ ==============================
PRINCIPAL AMORTIZATION PAYMENT TERM LOAN B PRINCIPAL
DATES AMORTIZATION PAYMENT
-------------------------------- ------------------------------
December 31, 2004 $125,000
-------------------------------- ------------------------------
March 31, 2005 $125,000
-------------------------------- ------------------------------
June 30, 2005 $125,000
-------------------------------- ------------------------------
September 30, 2005 $125,000
-------------------------------- ------------------------------
December 31, 2005 $125,000
-------------------------------- ------------------------------
March 31, 2006 $125,000
-------------------------------- ------------------------------
June 30, 2006 $125,000
-------------------------------- ------------------------------
September 30, 2006 $125,000
-------------------------------- ------------------------------
December 31, 2006 $125,000
-------------------------------- ------------------------------
March 31, 2007 $125,000
-------------------------------- ------------------------------
June 30, 2007 $125,000
-------------------------------- ------------------------------
September 30, 2007 $125,000
-------------------------------- ------------------------------
December 31, 2007 $125,000
-------------------------------- ------------------------------
March 31, 2008 $125,000
-------------------------------- ------------------------------
June 30, 2008 $125,000
-------------------------------- ------------------------------
September 30, 2008 $125,000
-------------------------------- ------------------------------
December 31, 2008 $23,875,000
-------------------------------- ------------------------------
Term Loan B Maturity Date $23,875,000
-------------------------------- ------------------------------
(c) Term Loan B Notes. Each Lender's Term Loan B Commitment Percentage
of the Term Loan B Committed Amount shall be evidenced by a duly executed
promissory note of the Borrowers to such Lender in substantially the form
of Schedule 2.4(c).
SECTION 2.6 ADDITIONAL TERM LOAN.
Subject to the terms and conditions set forth herein, upon twenty (20)
Business Days advance written notice to the Administrative Agent, the Borrowers
shall have the right, subject to the prior written approval of the Required
Lenders, at any time from the Funding Date until one hundred eighty (180) days
prior to the Term Loan B Maturity Date, to increase the aggregate amount of the
Commitments hereunder by an aggregate amount not to exceed $50,000,000 through
38
the addition of a new tranche of term loans (the "Additional Term Loan") under
this Agreement which shall have a final maturity date no earlier than March 31,
2009 and shall otherwise be pari passu with the Loans and LOC Obligations in all
respects, including as to ranking, security, mandatory prepayments and voting
issues; provided that
(i) the Additional Term Loan shall be in a minimum principal amount of
$10,000,000 and integral multiples of $5,000,000 in excess thereof,
(ii) each existing Lender shall be given the opportunity (but shall
not be obligated) to issue a commitment for its pro rata share (based on
such Lender's aggregate Commitment Percentage) of the Additional Term Loan;
(iii) to the extent any new Lender provides a portion of the
Additional Term Loan, such Lender shall be an Eligible Assignee and shall
enter into a joinder agreement to give effect to such new Lender's
commitment as the Administrative Agent and the Borrowers may reasonably
request;
(iv) the Borrowers shall execute and/or deliver to the Administrative
Agent such promissory notes, certified resolutions, opinions of counsel and
such modifications to this Agreement (including revisions of Schedule
2.1(a)) and the other Credit Documents as the Administrative Agent shall
reasonably request in connection with the addition of the Additional Term
Loan; and
(v) the conditions to borrowing set forth in Section 4.4 shall be
satisfied as of the date of such addition of the Additional Term Loan.
The Lenders hereby authorize the Administrative Agent, on their behalf, to
execute any amendment or modification to this Agreement and the other Credit
Documents necessary to consummate the addition of the Additional Term Loan
pursuant to this Section.
ARTICLE III
FEES; PREPAYMENTS, INTEREST; GENERAL LOAN PROVISIONS
SECTION 3.1 FEES.
(a) The Borrowers jointly and severally agree to pay to the
Administrative Agent for the account of the Lenders a commitment fee (the
"Commitment Fee") on the daily average of the undrawn Revolving Loan
Commitment and Term Loan A Commitment (the "Undrawn Commitments"), from the
Closing Date until the Revolving Commitment Termination Date, in an amount
determined pursuant to the schedule below. For purposes of computing the
Commitment Fee hereunder, Swingline Loans shall not be considered usage but
39
LOC Obligations shall be considered usage under the aggregate Revolving
Committed Amount. The Commitment Fee shall be payable quarterly in arrears
on the 15th day following the last day of each calendar quarter for the
prior calendar quarter and upon termination of the Revolving Commitments or
the Tranche A Term Loan Commitments, as applicable. The Commitment Fee
shall be reduced as the Undrawn Commitment is reduced in accordance with
the schedule below.
Commitment Fee
Undrawn Commitment Percentage
greater than 67% of total Revolving Loan Commitment
and Term Loan A Commitment 1.375%
greater than 34% but not equal to 67% of total
Revolving Loan Commitment and
Term Loan A Commitment 1.125%
less than but not equal to 34% of total Revolving
Loan Commitment and Term Loan
A Commitment 0.75%
(b) Letter of Credit Fees. In consideration of the LOC Commitments,
the Borrowers agree to pay to the Issuing Lender a fee (the "Letter of
Credit Fee") equal to the Applicable Percentage per annum on the average
daily maximum amount available to be drawn under each Letter of Credit from
the date of issuance (or in the case of Letters of Credit outstanding on
the Closing Date, from the Closing Date) to the date of expiration. In
addition to such Letter of Credit Fee, the Issuing Lender may charge, and
retain for its own account without sharing by the other Lenders, an
additional facing fee of one-eighth of one percent (1/8%) per annum on the
average daily maximum amount available to be drawn under each such Letter
of Credit issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including the
Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) above, the Borrowers shall pay to the
Issuing Lender for its own account without sharing by the other Lenders the
reasonable and customary charges from time to time of the Issuing Lender
with respect to the amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit (collectively,
the "Issuing Lender Fees").
(d) Administrative Fee. The Borrowers agree to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.
SECTION 3.2 REDUCTION OF REVOLVING COMMITMENTS OR TERM LOAN A COMMITMENTS.
(a) Voluntary Reductions. The Borrowers shall have the right to
terminate or permanently reduce the unused portion of the Revolving
Committed Amount and/or the Term Loan A Committed Amount at any time or
from time to time upon not less than three Business Days' prior notice to
the Administrative Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction
40
which shall be in a minimum amount of $2,000,000 or a whole multiple of
$500,000 in excess thereof and shall be irrevocable and effective upon
receipt by the Administrative Agent, provided that no such reduction or
termination shall be permitted if after giving effect thereto, and to any
prepayments of the Loans made on the effective date thereof, (i) the sum of
the then outstanding aggregate principal amount of the Revolving Loans plus
Swingline Loans plus LOC Obligations would exceed the Revolving Committed
Amount after such proposed reduction or (ii) the amount of the then
outstanding aggregate principal amount of the Term Loan B would exceed the
Term Loan B Committed Amount.
(b) Mandatory Reductions.
(i) On any date that the Revolving Loans are required to be
prepaid pursuant to the terms of Section 3.3(b)(ii)-(vi), the
Revolving Committed Amount shall be automatically permanently reduced
by the amount of Revolving Loans prepaid.
(ii) The Revolving Committed Amount shall be reduced in eighteen
(18) consecutive fiscal quarterly installments as follows (and the
outstanding Revolving Loans shall be repaid in an amount necessary to
comply with Section 3.3(b)(i)), unless accelerated sooner pursuant to
Section 10.2:
================================ ==============================
REVOLVING COMMITTED AMOUNT
REDUCTION DATES AMOUNT OF REDUCTION
-------------------------------- ------------------------------
June 30, 2004 $1,875,000
-------------------------------- ------------------------------
September 30, 2004 $1,875,000
-------------------------------- ------------------------------
December 31, 2004 $1,875,000
-------------------------------- ------------------------------
March 31, 2005 $1,875,000
-------------------------------- ------------------------------
June 30, 2005 $3,750,000
-------------------------------- ------------------------------
September 30, 2005 $3,750,000
-------------------------------- ------------------------------
December 31, 2005 $4,687,500
-------------------------------- ------------------------------
March 31, 2006 $4,687,500
-------------------------------- ------------------------------
June 30, 2006 $4,687,500
-------------------------------- ------------------------------
September 30, 2006 $4,687,500
-------------------------------- ------------------------------
December 31, 2006 $4,687,500
-------------------------------- ------------------------------
March 31, 2007 $4,687,500
-------------------------------- ------------------------------
June 30, 2007 $4,687,500
-------------------------------- ------------------------------
September 30, 2007 $4,687,500
-------------------------------- ------------------------------
41
================================ ==============================
REVOLVING COMMITTED AMOUNT
REDUCTION DATES AMOUNT OF REDUCTION
-------------------------------- ------------------------------
December 31, 2007 $5,625,000
-------------------------------- ------------------------------
March 31, 2008 $5,625,000
-------------------------------- ------------------------------
June 30, 2008 $5,625,000
-------------------------------- ------------------------------
Revolving Commitment $5,625,000
Termination Date
-------------------------------- ------------------------------
(c) Maturity Date. The Revolving Commitments, the LOC Commitments and
the Swingline Commitment shall automatically terminate on the Revolving
Commitment Termination Date.
SECTION 3.3 PREPAYMENTS.
(a) Optional Prepayments. The Borrowers shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that (i)
each partial prepayment of Alternate Base Rate Loans shall be in a minimum
principal amount of $500,000 and integral multiples of $250,000 in excess
thereof, (ii) each partial prepayment of LIBOR Rate Loans shall be in a
minimum principal amount of $2,000,000 and integral multiples of $500,000
in excess thereof and (iii) each prepayment of Swingline Loans shall be in
a minimum principal amount of $250,000 and integral multiples of $100,000
in excess thereof. The Borrowers shall give irrevocable written notice (or
telephone notice promptly confirmed in writing which confirmation may be by
fax) to the Administrative Agent (which shall notify the Lenders thereof as
soon as practicable) not later than 1:30 P.M. (Charlotte, North Carolina
time) on the date of the requested prepayment in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date of the
requested prepayment in the case of LIBOR Rate Loans. Subject to the
foregoing terms, amounts prepaid under this Section 3.3(a) shall be applied
as the Borrowers may elect; provided, however, if the Borrowers shall fail
to elect an order of prepayment, such amounts shall be applied (A) first,
to prepay Revolving Loans outstanding at such time until paid in full
without a corresponding reduction in the Revolving Commitment, (B) second,
pro rata to the Term Loan A (ratably to the remaining principal
installments thereof) and (C) third, pro rata to the Term Loan B (ratably
to the remaining principal installments thereof). Within the parameters of
the applications set forth above, prepayments shall be applied first to
Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities. All prepayments under this Section 3.3(a) shall
be subject to Section 2.19, but otherwise without premium or penalty;
provided, however, that optional prepayments made with respect to Term Loan
42
B (i) prior to the first anniversary of the Closing Date shall be subject
to a prepayment penalty of 2.0% and (ii) on or after the first anniversary
of the Closing Date but prior to the second anniversary of the Closing Date
shall be subject to a prepayment penalty of 1.0%. Interest on the principal
amount prepaid shall be payable on the next occurring Interest Payment Date
that would have occurred had such loan not been prepaid. Amounts prepaid on
the Swingline Loans and the Revolving Loans may be reborrowed in accordance
with the terms hereof. Amounts prepaid on the Term Loans may not be
reborrowed.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the sum of the
aggregate principal amount of outstanding Revolving Loans plus Swingline
Loans plus LOC Obligations shall exceed the Revolving Committed Amount, the
Borrowers immediately shall prepay the Revolving Loans and (after all
Revolving Loans have been repaid) cash collateralize the LOC Obligations,
in an amount sufficient to eliminate such excess.
(ii) Asset Dispositions. Within ten (10) Business Days following any
Asset Disposition, the Borrowers shall prepay the Loans in an aggregate
amount equal to one hundred percent (100%) of the Net Cash Proceeds derived
from such Asset Disposition (such prepayment to be applied as set forth in
clause (vii) below); provided, however, that such Net Cash Proceeds shall
not be required to be so applied to the extent that the Company delivers to
the Administrative Agent a certificate certifying that the Credit Parties
intend to reinvest such Net Cash Proceeds in replacement assets within 180
days of the receipt of such Net Cash Proceeds. Notwithstanding anything to
the contrary contained herein, after the occurrence and during the
continuance of an Event of Default, the Required Lenders shall have the
option to require such Net Cash Proceeds to be applied immediately to
prepay the Loans in accordance with clause (vii) below.
(iii) Debt Issuance. Within ten (10) Business Days following any Debt
Issuance, the Borrowers shall prepay the Loans in an aggregate amount equal
to one hundred percent (100%) of the Net Cash Proceeds derived from such
Debt Issuance (such prepayment to be applied as set forth in clause (vii)
below).
(iv) Equity Issuance. Within ten (10) Business Days following any
Equity Issuance, the Borrowers shall prepay the Loans in an aggregate
amount equal to fifty percent (50%) of the Net Cash Proceeds derived from
such Equity Issuance (such prepayment to be applied as set forth in clause
(vii) below); provided, however, that such Net Cash Proceeds shall not be
required to be so applied to the extent that the Company delivers to the
Administrative Agent a certificate that the Credit Parties intend to use
such Net Cash Proceeds to (A) redeem up to 35% of the outstanding principal
amount of the Permitted Parent Debt and pay any penalties, premiums or
accrued interest with respect thereto, and/or (B) acquire additional
telecommunications assets within 18 months of the receipt of such Net Cash
Proceeds, so long as such additional telecommunications assets are useful
in its business in accordance with the provisions of Section 7.10 and as
permitted pursuant to Section 9.4. Notwithstanding anything to the contrary
contained herein, after the occurrence and during the continuance of an
Event of Default, the Required Lenders shall have the option to require
43
such Net Cash Proceeds to be applied immediately to prepay the Loans in
accordance with clause (vii) below.
(v) Recovery Event. Within ten (10) Business Days following the
receipt of insurance proceeds in connection with a Recovery Event, the
Borrowers shall prepay the Loans in an aggregate amount equal to one
hundred percent (100%) of such insurance proceeds (such prepayment to be
applied as set forth in clause (vii) below); provided, however, that such
insurance proceeds shall not be required to be so applied to the extent
that the Company delivers to the Administrative Agent a certificate
certifying that the Credit Parties intend to reinvest such insurance
proceeds in replacement assets within 180 days of the receipt of such
insurance proceeds. Notwithstanding anything to the contrary contained
herein, after the occurrence and during the continuance of an Event of
Default, the Required Lenders shall have the option to require such
insurance proceeds to be applied immediately to prepay the Loans in
accordance with clause (vii) below.
(vi) Excess Cash Flow. Within ninety (90) days after the end of each
fiscal year (commencing with the fiscal year ending December 31, 2003), the
Borrowers shall prepay the Loans in an amount equal to fifty percent (50%)
of the Excess Cash Flow earned during such prior fiscal year. Any payments
of Excess Cash Flow shall be applied as set forth in clause (vii) below.
(vii) Application of Mandatory Prepayments. All amounts required to be
paid pursuant to this Section 3.3(b) shall be applied as follows: (A) with
respect to all amounts prepaid pursuant to Section 3.3(b)(i), to Revolving
Loans and (after all Revolving Loans have been repaid) to a cash collateral
account (held by the Administrative Agent for the ratable benefit of the
Lenders) in respect of LOC Obligations and (B) with respect to all amounts
prepaid pursuant to Sections 3.3(b)(ii)-(vi), (1) first pro rata to the
Term Loan A and the Term Loan B (ratably to the remaining principal
installments thereof); provided that one or more holders of the Term Loan B
may decline to accept a mandatory prepayment under Section 3.3(b)(ii) -
(vi) to the extent there is a sufficient portion of the Term Loan A
outstanding to be paid with such prepayment, in which case such declined
prepayments shall be allocated, on a pro rata basis, to the holders of the
Term Loan A and the holders of the Term Loan B accepting such prepayments,
and (2) second pro rata to the Revolving Loans and (after all Revolving
Loans have been repaid) to a cash collateral account in respect of LOC
Obligations. Within the parameters of the applications set forth above,
prepayments shall be applied first to Alternate Base Rate Loans and then to
LIBOR Rate Loans in direct order of Interest Period maturities. All
prepayments under this Section 3.3(b) shall be subject to Section 3.13 and
be accompanied by interest on the principal amount prepaid to the date of
prepayment. Amounts prepaid on Swingline Loans and Revolving Loans may be
reborrowed in accordance with the terms hereof. Amounts prepaid on the Term
Loans may not be reborrowed.
44
SECTION 3.4 MINIMUM BORROWING AMOUNTS; PRINCIPAL AMOUNT OF TRANCHES;
LENDING OFFICE.
(a) Each Alternate Base Rate Loan (other than Swingline Loans)
borrowing shall be in a minimum amount of $500,000 and whole multiples of
$250,000 in excess thereof (or, of such Alternate Base Rate Loan is a
Revolving Loan, the remaining amount of the Revolving Committed Amount, if
less).
(b) Each LIBOR Rate Loan borrowing shall be in a minimum amount of
$2,000,000 and whole multiples of $500,000 in excess thereof.
(c) All borrowings, payments and prepayments in respect of Revolving
Loans and Term Loans shall be in such amounts and be made pursuant to such
elections so that after giving effect thereto the aggregate principal
amount of the Revolving Loans and Term Loans comprising any Tranche shall
either be zero or shall not be less than $2,000,000 or a whole multiple of
$500,000 in excess thereof.
(d) LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending
Office and Alternate Base Rate Loans at its Domestic Lending Office.
SECTION 3.5 INTEREST; INTEREST PAYMENT DATES.
(a) Subject to the provisions of Section 3.5(b), all Loans (other than
Swingline Loans) shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as Loans shall
be comprised of Alternate Base Rate Loans, each such Alternate Base
Rate Loan shall bear interest at a per annum rate equal to the sum of
the Alternate Base Rate plus the Applicable Percentage; and ----
(ii) LIBOR Rate Loans. During such periods as Loans shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate plus
the Applicable Percentage.
(b) Upon the occurrence, and during the continuance of an Event of
Default, the principal of and, to the extent permitted by law, interest on
(i) LIBOR Rate Loans shall bear interest, payable on demand, at a per annum
rate 2% greater than the rate then applicable to such Loans until the end
of the applicable Interest Period and thereafter at a per annum rate 2%
greater than the rate then applicable to Alternate Base Rate and (ii)
Alternate Base Rate Loans, fees and other amounts due and payable hereunder
and under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate 2% greater than the rate then applicable to
Alternative Base Rate Loans.
(c) Interest on Loans shall be payable in arrears on each Interest
Payment Date, subject to Section 3.13; provided, however, at any time after
45
an Event of Default shall have occurred and be continuing, interest then
due and owing shall be payable on demand made by the Administrative Agent
at the discretion of the Required Lenders.
SECTION 3.6 CONVERSION OPTIONS.
(a) The Company may, in the case of Revolving Loans and the Term
Loans, elect from time to time to convert Alternate Base Rate Loans to
LIBOR Rate Loans by giving irrevocable written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the third Business Day prior to the date of the requested
conversion. A form of Notice of Conversion/ Extension is attached as
Schedule 3.6. If the date upon which an Alternate Base Rate Loan is to be
converted to a LIBOR Rate Loan is not a Business Day, then such conversion
shall be made on the next succeeding Business Day and during the period
from such last day of an Interest Period to such succeeding Business Day
such Loan shall bear interest as if it were an Alternate Base Rate Loan.
All or any part of outstanding Alternate Base Rate Loans may be converted
as provided herein, provided that (i) no Loan may be converted into a LIBOR
Rate Loan when any Default or Event of Default has occurred and is
continuing and (ii) partial conversions shall be in an aggregate principal
amount of $2,000,000 or a whole multiple of $500,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the expiration
of an Interest Period with respect thereto by compliance by the Company
with the notice provisions contained in subsection (a) above; provided,
that no LIBOR Rate Loan may be continued as such when any Default or Event
of Default has occurred and is continuing, in which case such Loan shall be
automatically converted to an Alternate Base Rate Loan at the end of the
applicable Interest Period with respect thereto. If the Company shall fail
to give timely notice of an election to continue a LIBOR Rate Loan, or the
continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR
Rate Loans shall be automatically converted to Alternate Base Rate Loans at
the end of the applicable Interest Period with respect thereto.
SECTION 3.7 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base Rate
Loans accruing interest at the Prime Rate shall be calculated on the basis
of a year of 365 days (or 366 days, as applicable) for the actual days
elapsed. All other fees, interest and all other amounts payable hereunder
shall be calculated on the basis of a 360 day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Company and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof. Any change in the interest rate
on a Loan resulting from a change in the Alternate Base Rate shall become
effective as of the opening of business on the day on which such change in
the Alternate Base Rate shall become effective. The Administrative Agent
shall as soon as practicable notify the Company and the Lenders of the
effective date and the amount of each such change.
46
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Company, deliver to the
Company a statement showing the computations used by the Administrative
Agent in determining any interest rate.
(c) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to
time in effect. All agreements between the Lenders and the Credit Parties
are hereby limited by the provisions of this paragraph which shall override
and control all such agreements, whether now existing or hereafter arising
and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of
any obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrowers or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
Indebtedness evidenced by any of the Credit Documents does not include the
right to receive any interest which has not otherwise accrued on the date
of such demand, and the Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or agreed
to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of the
Loans so that the amount of interest on account of such indebtedness does
not exceed the maximum nonusurious amount permitted by applicable law.
SECTION 3.8 PRO RATA TREATMENT AND PAYMENTS.
Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment under this Agreement or any Note shall
be applied, first, to any fees then due and owing by the Borrowers pursuant to
Section 3.1, second, to interest then due and owing in respect of the Notes of
the Borrowers and, third, to principal then due and owing hereunder and under
the Notes of the Borrowers. Each payment on account of any fees pursuant to
Section 3.1 shall be made pro rata in accordance with the respective amounts due
47
and owing (except as to the portion of the Letter of Credit Fee retained by the
Issuing Lender, the Issuing Lender Fees and fees payable to the Administrative
Agent). Each payment (other than prepayments) by the Borrowers on account of
principal of and interest on the Revolving Loans and on the Term Loans shall be
made pro rata according to the respective amounts due and owing in accordance
with Section 3.3(a) hereof. Each optional prepayment on account of principal of
the Loans shall be applied to such of the Loans as the applicable Borrower may
designate (to be applied pro rata among the Lenders); provided, that prepayments
made pursuant to Section 3.13 shall be applied in accordance with such section.
Each mandatory prepayment on account of principal of the Loans shall be applied
in accordance with Section 3.3(b). All payments (including prepayments) to be
made by the Borrowers on account of principal, interest and fees shall be made
without defense, set-off or counterclaim and shall be made to the Administrative
Agent for the account of the Lenders at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 2:00 P.M. (Charlotte,
North Carolina time) on the date when due. The Administrative Agent shall
distribute such payments to the Lenders entitled thereto promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on the
LIBOR Rate Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Rate Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
SECTION 3.9 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrowers a corresponding amount. If
such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent will promptly notify the Company and the
Borrowers shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover from the Lender or the Borrowers, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrowers to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrowers at
the applicable rate for the applicable borrowing pursuant to the Notice of
Borrowing and (ii) from a Lender at the Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been notified in
writing by the Company, prior to the date on which any payment is due from
it hereunder (which notice shall be effective upon receipt) that the
48
Borrowers do not intend to make such payment, the Administrative Agent may
assume that the Borrowers have made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to each Lender on such payment date an amount
equal to the portion of such assumed payment to which such Lender is
entitled hereunder, and if the Borrowers have not in fact made such payment
to the Administrative Agent, such Lender shall, on demand, repay to the
Administrative Agent the amount made available to such Lender. If such
amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand interest on such amount in respect of each
day from the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is recovered by the
Administrative Agent at a per annum rate equal to the Federal Funds
Effective Rate.
(c) A certificate of the Administrative Agent submitted to the Company
or any Lender with respect to any amount owing under this Section 3.9 shall
be conclusive in the absence of manifest error.
SECTION 3.10 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for an Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Company has requested
be outstanding as a LIBOR Tranche during an Interest Period, the Administrative
Agent shall forthwith give telephone notice of such determination, confirmed in
writing, to the Company, and the Lenders at least two Business Days prior to the
first day of such Interest Period. Unless the Company shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Alternate Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall be converted into Alternate Base Rate Loans. Until any
such notice has been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as, or converted into, LIBOR Rate Loans for the
Interest Periods so affected.
SECTION 3.11 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Company thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
49
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law as Alternate Base Rate Loans. The Borrowers hereby jointly and
severally agree promptly to pay any Lender, upon its demand, any additional
amounts necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any
repayment in accordance with this Section including, but not limited to, any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to
any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Company shall be conclusive in
the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to
minimize any amounts which may otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by such
Lender in its sole discretion to be material.
SECTION 3.12 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date
hereof:
(i) shall subject such Lender to any tax of any kind whatsoever
with respect to any Letter of Credit or any application relating
thereto, any LIBOR Rate Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or to reduce any amount receivable hereunder or under any Note,
then, in any such case, the Borrowers jointly and severally shall
promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced
amount receivable which such Lender reasonably deems to be material as
determined by such Lender with respect to its LIBOR Rate Loans or
50
Letters of Credit. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Company shall be conclusive in the absence
of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or
LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this paragraph of
this Section; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in
the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any central bank or Governmental Authority made subsequent to the date
hereof does or shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount reasonably deemed by such Lender to be
material, then from time to time, promptly after demand by such Lender, the
Borrowers shall pay to such Lender such additional amount as shall be
certified by such Lender as being required to compensate it for such
reduction. Such a certificate as to any additional amounts payable under
this Section submitted by a Lender, through the Administrative Agent, to
the Company shall be conclusive absent manifest error.
(c) The agreements in this Section 3.12 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
SECTION 3.13 INDEMNITY.
The Borrowers hereby agree to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or incur
as a consequence of (a) default by a Borrower in payment of the principal amount
of or interest on any Loan by such Lender in accordance with the terms hereof,
(b) default by a Borrower in accepting a borrowing after the Company has given a
notice in accordance with the terms hereof, (c) default by a Borrower in making
any prepayment after such Borrower has given a notice of such prepayment to the
Administrative Agent, and/or (d) the making by a Borrower of a prepayment of a
Loan, or the conversion thereof, on a day which is not the last day of the
Interest Period with respect thereto, in each case including, but not limited
to, any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Company shall be conclusive in the absence of manifest error. The agreements in
this Section shall survive termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
SECTION 3.14 TAXES.
(a) All payments made by the Borrowers hereunder or under any Note
will be, except as provided in Section 3.14(b), made free and clear of, and
51
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any Governmental Authority or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or
profits of a Lender) and all interest, penalties or similar liabilities
with respect thereto (all such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrowers agree to pay
the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such
Note. The Borrowers will furnish to the Administrative Agent as soon as
practicable after the date the payment of any Taxes is due pursuant to
applicable law certified copies (to the extent reasonably available and
required by law) of tax receipts evidencing such payment by the Borrowers.
The Borrowers agree to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid by such Lender but excluding any interest or
penalties caused by such Lender's failure to pay any such taxes when due.
(b) Each Lender that is not a United States person (as such term is
defined in Section 5701(a)(30) of the Code) agrees to deliver to the
Borrowers and the Administrative Agent on or prior to the Closing Date, or
in the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 12.10 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment
or transfer), on the date of such assignment or transfer to such Lender,
(i) if the Lender is a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or W-8BEN (or successor forms) certifying such
Lender's entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any
Note, or (ii) if the Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, either Internal Revenue Service Form W-8ECI or
W-8BEN as set forth in clause (i) above, or (x) a certificate substantially
in the form of Schedule 3.14 (any such certificate, a "3.14 Certificate")
and (y) two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or W-8BEN (or successor form) certifying such
Lender's entitlement to an exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Lender agrees that it will deliver upon
the Company's request updated versions of the foregoing, as applicable,
whenever the previous certification has become obsolete or inaccurate in
any material respect, together with such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect
to payments under this Agreement and any Note. Notwithstanding anything to
the contrary contained in Section 3.14(a), but subject to the immediately
succeeding sentence, (x) each Borrower shall be entitled, to the extent it
is required to do so by law, to deduct or withhold Taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
52
therein) from interest, fees or other amounts payable hereunder for the
account of any Lender which is not a United States person (as such term is
defined in Section 5701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the Company
U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) each Borrower shall not be
obligated pursuant to Section 3.14(a) hereof to gross-up payments to be
made to a Lender in respect of Taxes imposed by the United States if (I)
such Lender has not provided to the Company the Internal Revenue Service
Forms required to be provided to the Company pursuant to this Section
3.14(b) or (II) in the case of a payment, other than interest, to a Lender
described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 3.14, each Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 3.14(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted
or withheld by it as described in the immediately preceding sentence as a
result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as
the case may be) to avoid or to minimize any amounts which might otherwise
be payable pursuant to this Section; provided, however, that such efforts
shall not cause the imposition on such Lender of any additional costs or
legal or regulatory burdens deemed by such Lender in its sole discretion to
be material.
(d) If a Borrower pays any additional amount pursuant to this Section
3.14 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of
such payment; provided that such Lender shall have no obligation to use
such reasonable efforts if either (i) it is in an excess foreign tax credit
position or (ii) it believes in good faith, in its sole discretion, that
claiming a refund or credit would cause adverse tax consequences to it. In
the event that such Lender receives such a refund or credit, such Lender
shall pay to the applicable Borrower an amount that such Lender reasonably
determines is equal to the net tax benefit obtained by such Lender as a
result of such payment by such Borrower. In the event that no refund or
credit is obtained with respect to a Borrower's payments to such Lender
pursuant to this Section 3.14(d), then such Lender shall upon request
provide a certification that such Lender has not received a refund or
credit for such payments. Nothing contained in this Section 3.14(d) shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 3.14(d) to a Borrower or any other party.
(e) The agreements in this Section 3.14 shall survive the termination
of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
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SECTION 3.15 JOINT AND SEVERAL OBLIGATIONS OF BORROWERS.
(a) The Borrowers hereby irrevocably appoint and authorize the Company
(i) to provide the Administrative Agent with all notices with respect to
Extensions of Credit obtained for the benefit of either Borrower and all
other notices and instructions under this Agreement and (ii) to take such
action on behalf of the Borrowers as it deems appropriate to obtain
Extensions of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.
(b) Each Borrower shall be jointly and severally liable for the Credit
Party Obligations, however incurred. References to the Borrowers with
respect to the Credit Party Obligations or any portion thereof shall mean
each Borrower on a joint and several basis.
SECTION 3.16 DEFAULTING LENDER; LIMITATION ON CLAIMS.
(a) Generally. In addition to the rights and remedies that may be
available to the Administrative Agent or the Borrowers under this Agreement
or applicable law, if at any time a Lender is a Defaulting Lender such
Defaulting Lender's right to participate in the administration of the
Loans, this Agreement and the other Credit Documents, including without
limitation, any right to vote in respect of, to consent to or to direct any
action or inaction of the Administrative Agent or to be taken into account
in the calculation of the Required Lenders, shall be suspended during the
pendency of such failure or refusal. If a Lender is a Defaulting Lender
because it has failed to make timely payment to the Administrative Agent of
any amount required to be paid to the Administrative Agent hereunder
(without giving effect to any notice or cure periods), in addition to other
rights and remedies which the Administrative Agent or the Borrowers may
have under the immediately preceding provisions or otherwise, the
Administrative Agent shall be entitled (i) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date
on which the payment was due until the date on which the payment is made at
the Federal Funds Effective Rate, (ii) to withhold or setoff and to apply
in satisfaction of the defaulted payment and any related interest, any
amounts otherwise payable to such Defaulting Lender under this Agreement or
any other Credit Document until such defaulted payment and related interest
has been paid in full and such default no longer exists and (iii) to bring
an action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest. Any
amounts received by the Administrative Agent in respect of a Defaulting
Lender's Loans shall not be paid to such Defaulting Lender and shall be
held uninvested by the Administrative Agent and either applied against the
purchase price of such Loans under the following subsection (b) or paid to
such Defaulting Lender upon the default of such Defaulting Lender being
cured.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is not
a Defaulting Lender shall have the right, but not the obligation, in its
sole discretion, to acquire all of a Defaulting Lender's Commitment. If
more than one Lender exercises such right, each such Lender shall have the
right to acquire such proportion of such Defaulting Lender's Commitment on
a pro rata basis. Upon any such purchase, the Defaulting Lender's interest
54
in the Loans and its rights hereunder (but not its liability in respect
thereof or under the Credit Documents or this Agreement to the extent the
same relate to the period prior to the effective date of the purchase)
shall terminate on the date of purchase, and the Defaulting Lender shall
promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof subject to and in
accordance with the requirements set forth in Section 12.10, including an
appropriate Assignment and Acceptance. The purchase price for the
Commitment of a Defaulting Lender shall be equal to the sum of the amount
of the principal balance of the Loans outstanding and owed by the Borrowers
to the Defaulting Lender, plus any accrued interest with respect thereto,
plus any fees or other amounts owed by the Borrowers to the Defaulting
Lender. Prior to payment of such purchase price to a Defaulting Lender, the
Administrative Agent shall apply against such purchase price any amounts
retained by the Administrative Agent pursuant to the last sentence of the
immediately preceding subsection (a). The Defaulting Lender shall be
entitled to receive all amounts owed to it by the Borrowers on account of
principal of and interest on the Loans and the Notes, and fees and other
amounts due under the Credit Documents which accrued prior to the date of
the default by the Defaulting Lender, to the extent the same are received
by the Administrative Agent from or on behalf of the Borrowers. There shall
be no recourse against any Lender or the Administrative Agent for the
payment of such sums by the Borrowers except to the extent of the receipt
of payments from any other party or in respect of the Loans.
(c) Limitation on Claims. Notwithstanding anything to the contrary
contained herein, the Borrower shall not be required to make any payments
to any Lender or the Issuing Lender pursuant to Sections 3.11 through 3.15
if the Company shall not have received notice of such Lender's or the
Issuing Lender's claim for payment or reimbursement within 180 days after
such Lender or the Issuing Lender, as applicable, became aware that such
amounts were due and owing.
SECTION 3.17 SECURITY.
The Credit Party Obligations of the Credit Parties shall be secured as
provided in the Security Documents.
ARTICLE IV
CLOSING: CONDITIONS OF CLOSING AND BORROWING
SECTION 4.1 CLOSING.
The closing shall take place at the offices of Moore & Van Allen, PLLC on
September 26, 2000 or on such other date as the parties hereto shall mutually
agree.
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SECTION 4.2 CONDITIONS TO EFFECTIVENESS.
The obligation of the Lenders to close this Agreement is subject to the
satisfaction of each of the following conditions on or before the date of
funding the initial Loans or issuing the initial Letters of Credit:
(a) Executed Credit Documents. This Agreement, the Revolving Notes,
the Term Loan A Notes, the Term Loan B Notes, the Swingline Note, the
Security Agreement, the Pledge Agreement, each Collateral Assignment of
Contract Rights and the Consents shall have been duly authorized, executed
and delivered to the Administrative Agent by the parties thereto, shall be
in full force and effect and no default shall exist thereunder, and the
Borrowers shall have delivered original counterparts thereof to the
Administrative Agent (or facsimile counterparts the delivery of which shall
constitute a representation that original counterparts will follow).
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Company. The Administrative
Agent shall have received a certificate from a Responsible Officer of
the Company, in form and substance satisfactory to the Administrative
Agent, to the effect that all representations and warranties of the
Credit Parties contained in this Agreement and the other Credit
Documents are true, correct and complete in all material respects;
that, to the best of such Responsible Officer's knowledge after due
inquiry, the Credit Parties are not in violation of any of the
covenants contained in this Agreement and the other Credit Documents;
that, after giving effect to the transactions contemplated by this
Agreement, no Default or Event of Default has occurred and is
continuing; and that the Credit Parties have satisfied each of the
closing conditions (except for conditions waived or delayed by the
Lenders).
(ii) Certificate of Secretary of the Credit Parties. The
Administrative Agent shall have received a certificate of the
secretary, assistant secretary or managing member of each Credit Party
certifying as to the incumbency and genuineness of the signature of
each officer thereof executing Credit Documents to which it is a party
and certifying that attached thereto is a true, correct and complete
copy of (A) the articles of incorporation, operating or limited
liability company agreement or similar charter document of each Credit
Party, as applicable, and all amendments thereto, certified as of a
recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation, organization or formation, (B) the
bylaws or similar organization document of each Credit Party, as
applicable, as in effect on the date of such certifications, and (C)
resolutions duly adopted by the board of directors of each Credit
Party, as applicable, authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which
it is a party.
(iii) Certificates of Good Standing. The Administrative Agent
shall have received long-form certificates as of a recent date of the
good standing of each Credit Party under the laws of its jurisdiction
of organization and to the extent requested by the Administrative
56
Agent each other jurisdiction where such Person is qualified to do
business (except for those jurisdictions where the failure to be in
good standing could not be reasonably expected to cause an Event of
Default hereunder or a Material Adverse Effect) and to the extent so
requested a certificate of the relevant taxing authorities of such
jurisdictions certifying that such Person has filed required tax
returns and owes no delinquent taxes.
(iv) Opinions of Counsel.
(A) The Administrative Agent shall have received favorable
opinions of counsel (including corporate and regulatory counsel
and local collateral counsel as necessary) to the Credit Parties
addressed to the Administrative Agent and the Lenders with
respect to the Credit Parties, the Credit Documents and such
other matters as the Lenders shall reasonably request.
(B) The Administrative Agent shall have received an opinion
of counsel to Sprint PCS addressed to the Administrative Agent
and the Lenders with respect to the Sprint Agreements.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the
collateral described in the Security Documents shall have been
forwarded for filing in all appropriate locations and the
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that upon such filings and recordations such
security interests constitute valid and perfected first priority Liens
therein.
(ii) Pledged Collateral. The Administrative Agent shall have
received (A) original stock certificates or other certificates
evidencing the Capital Stock pledged pursuant to the Pledge Agreement,
together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof and (B) each
original promissory note pledged pursuant to the Security Agreement.
(iii) Lien Search. The Administrative Agent shall have received
the results of a Lien search (including a search as to judgments,
pending litigation and tax matters) made against the Credit Parties
under the Uniform Commercial Code (or applicable judicial docket) as
in effect in the state in which each of them is incorporated or
organized and any state in which any of their respective assets are
located, indicating among other things that such assets are free and
clear of any Lien except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The Administrative Agent
shall have received certificates of insurance, evidence of payment of
all insurance premiums for the current policy year of each, and, if
requested by the Administrative Agent, copies (certified by a
57
Responsible Officer) of insurance policies in the form required under
the Security Documents and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.
(v) Real Property Security and Information. The Administrative
Agent shall have received such Mortgages, landlord consents, mortgagee
estoppel letters, title insurance, flood hazard certification,
surveys, environmental assessments with respect to any real property
owned or leased by the Borrowers or any other Credit Party, and such
other certificates, documents and information related thereto, in each
case as are reasonably requested by the Lenders, in form and substance
satisfactory to the Administrative Agent.
(vi) Consent. (i) Each Consent shall have been executed and
delivered and be in full force and effect, (ii) there shall have been
delivered to the Lenders true and correct copies of each Consent and
(iii) all terms and provisions of each Consent shall be in form and
substance reasonably satisfactory to the Administrative Agent and the
Required Lenders and shall not have been amended without the consent
of the Administrative Agent and the Required Lenders.
(vii) Material Contracts. (i) The Material Contracts shall be in
full force and effect, (ii) the Required Lenders shall be satisfied
with all material terms and conditions of the Material Contracts and
(iii) the Administrative Agent shall have received copies of the
Material Contracts (and all amendments or modifications thereto),
certified by a Responsible Officer of the Company to be true, correct
and complete copies and in full force and effect.
(d) Consents; Defaults.
(i) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any Governmental Authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement or the other Credit
Documents or the consummation of the transactions contemplated hereby
or thereby, or which, in the Administrative Agent's sole reasonable
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Credit Documents.
(ii) No Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the most recent Consolidated financial statements of the
Company and its Subsidiaries and of Bright and its Subsidiaries, all
in form and substance satisfactory to the Administrative Agent.
58
(ii) Financial Condition Certificate. The Company shall have
delivered to the Administrative Agent a certificate, in form and
substance satisfactory to the Administrative Agent, and certified as
accurate by a Responsible Officer, that, to the best of such
Responsible Officer's knowledge after due inquiry, (A) the Borrowers
and each other Credit Party are Solvent, (B) the Borrowers' and the
other Credit Parties' payables are current and not past due and (C)
the financial projections previously delivered to the Administrative
Agent represent the good faith opinions of the Borrowers and the other
Credit Parties and senior management thereof as to the projected
results contained therein.
(iii) Payment at Closing; Fee Letters. The Borrowers and the
other Credit Parties collectively shall have paid the fees set forth
or referenced in the Fee Letter and any other accrued and unpaid fees
or commissions due hereunder (including, without limitation,
reasonable legal fees and expenses actually incurred) to the
Administrative Agent and Lenders, and to any other Person such amount
as may be due thereto in connection with the transactions contemplated
hereby, including all taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of any of
the Credit Documents.
(f) Miscellaneous.
(i) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Lenders. The Administrative
Agent shall have received copies of the Sprint Agreements (certified
as true, correct and complete by a Responsible Officer), and all other
instruments and other evidence as the Lenders may reasonably request,
in form and substance reasonably satisfactory to the Lenders, with
respect to the transactions contemplated by this Agreement and the
taking of all actions in connection therewith.
(ii) Business Plans. The Lenders shall have received copies of
all Business Plans and any Approved Budgets currently in effect in
form and substance satisfactory to the Lenders with respect to the
buildout of the Network, each in form and substance satisfactory to
the Lenders.
(iii) Due Diligence and Other Documents. The Lenders and their
counsel shall have concluded their business and legal due diligence
review of the Borrowers and the other Credit Parties, including
without limitation a review of all material agreements. The Credit
Parties shall have delivered to the Lenders such other documents,
certificates and opinions as the Lenders have reasonably requested.
59
(iv) Compliance. The Borrowers shall be in compliance in all
material respects with the terms of each of the Supply Agreement and
the Sprint Agreements, each of which shall be valid and in full force
and effect.
SECTION 4.3 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT.
The obligation of the Lenders to make the initial Loan, or issue the
initial Letter of Credit is subject to the satisfaction of each of the following
conditions on or before the date of funding the initial Loans or issuing the
initial Letters of Credit:
(a) Notice of Borrowing. The Administrative Agent shall have received
a Notice of Borrowing from the Company, on behalf of the applicable
Borrower or Borrowers, in accordance with Section 2.1(b) or Section 2.2(b),
as applicable, and a Notice of Account Designation specifying the account
or accounts to which the proceeds of any Loans made after the Closing Date
are to be disbursed.
(b) Receipt of Proceeds and Commitment. The Company shall have
received not less than $275,000,000 in gross proceeds (and not less than
$255,000,000 in Net Cash Proceeds) from a combination of the Initial Equity
Offering and Permitted Parent Debt; provided, however, that not less than
$126,500,000 of such gross proceeds (and not less than $115,000,000 of such
Net Cash Proceeds) shall be received from the Initial Equity Offering on
terms and conditions reasonably satisfactory to the Lenders.
(c) Governmental and Third Party Approvals. The Company and the other
Credit Parties shall have obtained all necessary approvals, authorizations
and consents of any Person and of all Governmental Authorities and courts
having jurisdiction with respect to the transactions contemplated by this
Agreement and the other Credit Documents.
(d) Real Estate Collateral. The Administrative Agent shall have
received Mortgages and landlord consents (and mortgagee estoppel letters,
if reasonably requested by the Administrative Agent) with respect to any
real property then leased by any Credit Party, and such other certificates,
documents and information related thereto, in form and substance
satisfactory to the Administrative Agent.
(e) Pre-Closing Conditions. The Credit Parties shall have complied
with all provisions of Section 4.2 applicable thereto.
SECTION 4.4 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of the Lenders to make any Extensions of Credit are subject
to the satisfaction of the following conditions precedent on the relevant
borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article V shall be true and
correct on and as of such borrowing or issuance date with the same effect
60
as if made on and as of such date; except for any representation and
warranty made as of an earlier date, which representation and warranty
shall have been true and correct as of such earlier date.
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect
to such Loan or after giving effect to the Loans to be made on such date or
(ii) or the issue date with respect to such Letter of Credit or after
giving affect to such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
Administrative Agent shall have received the current Officer's Compliance
Certificate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and Lenders to enter into this
Agreement and to induce the Lenders to make Extensions of Credit, the Credit
Parties hereby represent and warrant to the Administrative Agent and Lenders
that:
(a) Organization; Power; Qualification. Each of the Credit Parties is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and authority
to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties
or the nature of its business requires such qualification and
authorization. The jurisdictions in which each Credit Party and its
Subsidiaries are organized and qualified to do business as of the Closing
Date, and the chief executive office and principal place of business of
each Credit Party and its Subsidiaries as of the Closing Date, are
described on Schedule 5.1(a).
(b) Ownership. Each Subsidiary of each Credit Party as of the Closing
Date is listed on Schedule 5.1(b). As of the Closing Date, the
capitalization of each Credit Party and its Subsidiaries consists of the
number of shares or units, authorized, issued and outstanding, of such
classes and series, with or without par value, described on Schedule
5.1(b). All outstanding shares or units have been duly authorized and
validly issued and are fully paid and nonassessable. The shareholders or
unitholders of each Credit Party and its Subsidiaries and the number of
shares or units owned by each as of the Closing Date are described on
Schedule 5.1(b). As of the Closing Date, there are no outstanding stock
purchase warrants, subscriptions, options, securities, instruments or other
rights of any type or nature whatsoever, which are convertible into,
exchangeable for or otherwise provide for or permit the issuance of Capital
Stock of any Credit Party, except as described on Schedule 5.1(b).
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(c) Authorization of Agreement, Credit Documents and Borrowing. Each
Credit Party has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Credit Documents to
which it is a party in accordance with their respective terms. This
Agreement and each of the other Credit Documents have been duly executed
and delivered by the duly authorized officers of each Credit Party that is
a party thereto, and each such document constitutes the legal, valid and
binding obligation of such Credit Party that is a party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which
affect the enforcement of creditors' rights in general and the availability
of equitable remedies.
(d) Compliance of Agreement, Credit Documents and Borrowing with Laws,
Etc. Except as set forth in Schedule 5.1(d), the execution, delivery and
performance by each Credit Party of the Credit Documents to which each such
Person is a party, in accordance with their respective terms, the
borrowings hereunder and the transactions contemplated hereby do not and
will not, by the passage of time, the giving of notice or otherwise, (i)
require any Governmental Approval or violate any applicable law relating to
any Credit Party or any of its Subsidiaries, (ii) conflict with, result in
a breach of or constitute a default under the articles of incorporation,
bylaws or other organizational documents of any Credit Party or any of its
Subsidiaries or any indenture, agreement or other instrument to which such
Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens
arising under the Credit Documents.
(e) Compliance with Law; Governmental Approvals. Each Credit Party and
each of its Subsidiaries (i) has all Governmental Approvals required by any
applicable law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on appeal and is not
the subject of any pending or, to the best of its knowledge, threatened
attack by direct or collateral proceeding, and (ii) is in material
compliance with each Governmental Approval applicable to it and in material
compliance with all other applicable laws relating to it or any of its
respective properties.
(f) Tax Returns and Payments. Each Credit Party and each of its
Subsidiaries has duly filed or caused to be filed all federal, state, local
and other tax returns required by applicable law to be filed, and has paid,
or made adequate provision for the payment of, all federal, state, local
and other taxes, assessments and governmental charges or levies upon it and
its property, income, profits and assets which are due and payable. No
Governmental Authority has asserted any Lien (other than Permitted Liens)
or other claim against any Credit Party or Subsidiary thereof with respect
to unpaid taxes which has not been discharged or resolved. The charges,
accruals and reserves on the books of any Credit Party and each of its
Subsidiaries in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of such Credit
Party and its Subsidiaries are in the judgment of the Company adequate, and
the Company does not anticipate any additional taxes or assessments for any
of such years.
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(g) Intellectual Property Matters. Each Credit Party and each of its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses,
patent applications, trademarks, trademark rights, trade names, trade name
rights, copyrights and rights with respect to the foregoing which are
required to conduct its business. No event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such rights, and neither any Credit Party nor any
Subsidiary thereof is liable to any Person for infringement under
applicable law with respect to any such rights as a result of its business
operations.
(h) Environmental Matters.
(i) The properties of the Credit Parties and their Subsidiaries
do not contain, and to their knowledge have not previously contained,
any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws
or (B) could give rise to liability under applicable Environmental
Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under
or about such properties or such operations which could interfere with
the continued operation of such properties or impair the fair saleable
value thereof;
(iii) Neither any Credit Party nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of their
properties or the operations conducted in connection therewith, nor
does any Credit Party or any Subsidiary thereof have knowledge or
reason to believe that any such notice will be received or is being
threatened;
(iv) Hazardous Materials have not been transported or disposed of
from the properties of any Credit Party or any of its Subsidiaries in
violation of, or in a manner or to a location which could give rise to
liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of
such properties in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Laws;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Credit Parties,
threatened, under any Environmental Law to which any Credit Party or
any Subsidiary thereof is or will be named as a party with respect to
such properties or operations conducted in connection therewith, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to such properties or such operations; and
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(vi) There has been no release, or to the best of any Credit
Party's knowledge, the threat of release, of Hazardous Materials at or
from such properties, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
(i) ERISA.
(i) As of the Closing Date, neither the Company nor any ERISA
Affiliate maintains or contributes to, or has any obligation under,
any Pension Plans other than those identified on Schedule 5.1(i);
(ii) Each Credit Party and each ERISA Affiliate are in
substantial compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to
all Employee Benefit Plans except for any required amendments for
which the remedial amendment period as defined in Section 401(b) of
the Code has not yet expired. Each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and
each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code. No liability has been incurred by any
Credit Party or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(iii) Within the last three years, no Pension Plan has been
terminated, nor has any accumulated funding deficiency (as defined in
Section 412 of the Code) been incurred (without regard to any waiver
granted under Section 412 of the Code), nor has any funding waiver
from the Internal Revenue Service been received or requested with
respect to any Pension Plan, nor has any Credit Party or any ERISA
Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 302 of ERISA
or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;
(iv) Within the last three years, neither any Credit Party nor
any ERISA Affiliate has: (A) engaged in a nonexempt prohibited
transaction described in Section 406 of the ERISA or Section 4975 of
the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (C) failed to make a
required contribution or payment to a Multiemployer Plan, or (D)
failed to make a required installment or other required payment under
Section 412 of the Code;
(v) No Termination Event has occurred within the last three
years; and
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(vi) No proceeding, claim, lawsuit and/or investigation which
would have a Material Adverse Effect is existing or, to the best
knowledge of any Credit Party, threatened concerning or involving any
(A) employee welfare benefit plan (as defined in Section 3(1) of
ERISA) currently maintained or contributed to by any Credit Party or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither any Credit Party nor any Subsidiary thereof
is engaged principally or as one of its activities in the business of
extending credit for the purpose of "purchasing or carrying" any "margin
stock" (as each such term is defined or used in Regulation U of the Board
of Governors of the Federal Reserve System). No part of the proceeds of any
of the Loans or Letters of Credit will be used for purchasing or carrying
margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors.
(k) Government Regulation. Neither any Credit Party nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the
Investment Company Act of 1940, as amended) and neither any Credit Party
nor any Subsidiary thereof is, or after giving effect to any Extension of
Credit will be, subject to regulation under the Public Utility Holding
Company Act of 1935 or the Interstate Commerce Act, each as amended, or any
other applicable law which limits its ability to incur or consummate the
transactions contemplated hereby.
(l) Material Contracts. Schedule 5.1(l) sets forth a complete and
accurate list of all Material Contracts of the Credit Parties and their
Subsidiaries in effect as of the Closing Date (including, but not limited
to, all of the Sprint Agreements which are designated as such on Schedule
5.1(l)) not listed on any other Schedule hereto; other than as set forth in
Schedule 5.1(l), each such Material Contract is, and after giving effect to
the consummation of the transactions contemplated by the Credit Documents
will be, in full force and effect in accordance with the terms thereof as
of the Closing Date. The Credit Parties and their Subsidiaries have
delivered to the Administrative Agent a true and complete copy of each
Material Contract required to be listed on Schedule 5.1(l) or any other
Schedule hereto.
(m) Employee Relations. Each of the Credit Parties and their
Subsidiaries has a stable work force in place and is not, as of the Closing
Date, party to any collective bargaining agreement nor has any labor union
been recognized as the representative of its employees except as set forth
on Schedule 5.1(m). Neither the Credit Parties nor any of their
Subsidiaries knows of any pending, threatened or contemplated strikes, work
stoppage or other collective labor disputes involving its employees.
(n) Burdensome Provisions. Neither the Credit Parties nor any
Subsidiary thereof is a party to any indenture, agreement, lease or other
instrument, or subject to any corporate or partnership restriction,
Governmental Approval or applicable law which is so unusual or burdensome
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as in the foreseeable future could be reasonably expected to have a
Material Adverse Effect. The Credit Parties and their Subsidiaries do not
presently anticipate that future expenditures needed to meet the provisions
of any statutes, orders, rules or regulations of a Governmental Authority
will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The Consolidated balance sheets of the
Parent and its Subsidiaries and of Bright and its Subsidiaries as of
December 31, 1999 and the related statements of income and cash flows for
the portion of a year then ended, copies of which have been furnished to
the Administrative Agent and each Lender, are complete and correct and
fairly present, in all material respects, the assets, liabilities and
financial position of the Parent and its Subsidiaries and of the Company
and its Subsidiaries as at such dates, and the results of the operations
and changes of financial position for the periods then ended. All such
financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP. From December 31, 1999 to the
Closing Date, the Parent and its Subsidiaries and Bright and its
Subsidiaries have no Indebtedness or other unusual forward or long-term
commitment which is not incurred in the ordinary course of business or not
fairly reflected in the foregoing financial statements or in the Parent's
Registration Statement on Form S-1 filed in connection with the initial
public offering of the Parent's common stock.
(p) No Material Adverse Change. Since December 31, 1999, there has
been no material adverse change in the properties, business, operations,
prospects, or condition (financial or otherwise) of the Credit Parties and
their Subsidiaries taken as a whole and no event has occurred or condition
arisen that could reasonably be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, each of the Credit Parties will be
Solvent.
(r) Titles to Properties. Each of the Credit Parties and their
Subsidiaries has such title to the real property owned or leased by it as
is necessary or desirable to the conduct of its business and valid and
legal title to all of its personal property and assets, including, but not
limited to, those reflected on the balance sheets of the Parent and its
Subsidiaries and the Company and its Subsidiaries delivered pursuant to
Section 5.1(o), except those which have been disposed of by the Parent or
its Subsidiaries subsequent to such date which dispositions have been in
the ordinary course of business or as otherwise expressly permitted
hereunder. Schedule 5.1(r) sets forth as of the Closing Date (i) the
address of each parcel of real property owned or leased by the Credit
Parties or any Subsidiary thereof, and with respect to all leasehold
interests, a summary of the relevant lease terms, and (ii) the address of
each location where assets of a Credit Party or any of its Subsidiaries are
held.
(s) Liens. None of the properties and assets of the Credit Parties or
any Subsidiary thereof is subject to any Lien, except Liens permitted
pursuant to Section 9.3. No financing statement under the Uniform
Commercial Code of any state which names any Credit Party or any Subsidiary
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thereof or any of their respective trade names or divisions as debtor and
which has not been terminated, has been filed in any state or other
jurisdiction, except those relating to Liens permitted by Section 9.3
hereof and neither any Credit Party nor any Subsidiary thereof has signed
any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement, except to
perfect those Liens permitted by Section 9.3 hereof.
(t) Indebtedness and Guaranty Obligations. Schedule 5.1(t) is a
complete and correct listing of all Indebtedness and Guaranty Obligations
of the Credit Parties and their Subsidiaries as of the Closing Date in
excess of $250,000. The Credit Parties and their Subsidiaries have
performed and are in compliance in all material respects with all of the
terms of such Indebtedness and Guaranty Obligations and all instruments and
agreements relating thereto, and no default or event of default, or event
or condition which with notice or lapse of time or both would constitute
such a default or event of default on the part of the Company or its
Subsidiaries exists with respect to any such Indebtedness or Guaranty
Obligation.
(u) Litigation. Except for matters existing on the Closing Date and
set forth on Schedule 5.1(u), there are no actions, suits or proceedings
pending nor, to the knowledge of the Credit Parties or any of their
Subsidiaries, threatened against or in any other way relating adversely to
or affecting any Credit Party or any Subsidiary thereof or any of their
respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority which could reasonably be expected
to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred and is continuing which
constitutes a default or an event of default, or which constitutes, or
which with the passage of time or giving of notice or both would
constitute, an event of default by any Credit Party or any Subsidiary
thereof under any Material Contract which has not been cured or waived and
which would give the non-breaching party or parties thereto a right of
termination. Additionally, no judgment, decree or order to which any Credit
Party or its Subsidiaries is a party or by which such Credit Party or its
Subsidiaries or any of their respective properties may be bound or which
would require such Credit Party or its Subsidiaries to make any payment
thereunder prior to the scheduled maturity date therefor has been rendered
or issued which could reasonably be expected to have a Material Adverse
Effect.
(w) Communications Regulatory Matters.
(i) Schedule 5.1(w) hereto sets forth, as of the date hereof, a
true and complete list of the following information for each
Communications License issued to any Credit Party or any its
Subsidiaries: (A) for all Communications Licenses, the name of the
licensee, the type of service and the expiration dates; and (B) for
each PUC Authorization only, the geographic area covered by such PUC
Authorization, the services that may be provided thereunder and the
expiration date, if any.
(ii) Neither any Credit Party nor any Subsidiary thereof is in
material violation of any Communications Law applicable thereto. The
Communications Licenses specified on Schedule 5.1(w) hereto are valid
and in full force and effect without conditions except for such
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conditions as are generally applicable to holders of such
Communications Licenses and except as set forth on such Schedule. No
event has occurred and is continuing which could reasonably be
expected to (A) result in the imposition of a material forfeiture or
the revocation, termination or adverse modification of any such
Communications License or (B) materially and adversely affect any
rights of any Credit Party or any of its Subsidiaries thereunder. No
Credit Party has any reason to believe and has no knowledge that the
Communications Licenses of such Credit Party or its Subsidiaries will
not be approved or renewed, as applicable, in the ordinary course.
(iii) All of the Network Facilities and other material
properties, equipment and systems owned, leased or managed by any
Credit Party or any of its Subsidiaries are in good repair, working
order and condition (reasonable wear and tear excepted) and are and
will be in compliance with all material terms and conditions of the
Communications Licenses and all material standards or rules imposed by
applicable Communications Law and any Governmental Authority or as
imposed under any agreements with telephone companies and customers.
(iv) Each Credit Party and each of its Subsidiaries have paid all
franchise, license or other fees and charges which have become due
pursuant to any Governmental Approval in respect of their business and
have made appropriate provision as is required by GAAP for any such
fees and charges which have accrued.
(v) To the best of Credit Parties' knowledge, each PCS License
required to operate the Network has been obtained by and duly issued
to SprintCom, Inc. and/or its Affiliates by the FCC or other relevant
Governmental Authority is in full force and effect and there are no
grounds for any revocation, early termination or suspension of, or
similar action with respect to, any PCS License.
(x) Supply Agreement. The Borrowers (i) are in compliance in all
material respects with the terms and conditions of the Supply Agreement and
(ii) have not terminated, nor taken any action which could result in the
termination of, the Supply Agreement.
(y) Sprint Agreements. The Sprint Agreements and any assignments
thereof, true and complete copies of which have been furnished to the
Administrative Agent, have been duly authorized, executed and delivered by
the Credit Parties thereto, as of the Closing Date have not been amended or
otherwise modified in any material respects except as set forth in Schedule
5.1(y), and are in full force and effect and are binding upon and
enforceable against all parties thereto in accordance with their terms. To
the extent any Sprint Agreement was not originally executed by a Borrower,
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but rather by an Affiliate of a Borrower, such Sprint Agreement has been
assigned to a Borrower, all third party consents required with respect to
such assignment have been obtained and each of the applicable Borrower and
the SprintCom, Inc. Affiliate or Affiliates a party to such assignment are
bound by the terms of such assignment. There has occurred no (i) default
which could reasonably be expected to have a Material Adverse Effect, (ii)
Management Agreement Breach, (iii) Event of Termination, in each case under
any Sprint Agreement by any party thereto or (iv) amendment or modification
to any Program Requirements (as defined in the Sprint Management
Agreements), guidelines or policies set forth in the Sprint Agreements
which could reasonably be expected to have a Material Adverse Effect.
(z) Accuracy and Completeness of Information. All information, reports
and other papers and data (other than financial projections which have been
prepared in good faith based upon reasonable assumptions) produced by or on
behalf of any Credit Party or any Subsidiary thereof and furnished to the
Lenders were, to the best of such Credit Party's or Subsidiary's knowledge,
at the time the same were so furnished, complete and correct in all
material respects to the extent necessary to give the recipient a true and
accurate knowledge of the subject matter. No document furnished or
statement made to the Administrative Agent or the Lenders by any Credit
Party or any Subsidiary thereof in connection with the negotiation,
preparation or execution of this Agreement or any of the Credit Documents
contains any untrue statement of a fact material to the creditworthiness of
any Credit Party or its Subsidiaries or omits to state a fact necessary in
order to make the statements contained therein not misleading. No Credit
Party is aware of any facts having a Material Adverse Effect.
SECTION 5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All representations and warranties set forth in this Article V and all
representations and warranties contained in any certificate, or any of the
Credit Documents (including but not limited to any such representation or
warranty made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
Until all the Credit Party Obligations (other than inchoate indemnity
Credit Party Obligations) have been paid and satisfied in full and the Credit
Facilities have been terminated, unless consent has been obtained in the manner
set forth in Section 12.11 hereof, the Credit Parties will furnish or cause to
be furnished to the Administrative Agent and to the Lenders at their respective
addresses as set forth on Schedule 12.1, or such other office as may be
designated by the Administrative Agent and Lenders from time to time:
SECTION 6.1 FINANCIAL STATEMENTS AND PROJECTIONS.
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(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter of
each Fiscal Year, an unaudited Consolidated and consolidating balance sheet
of the Parent and its Subsidiaries and the Company and its Subsidiaries as
of the close of such fiscal quarter and unaudited Consolidated and
consolidating statements of income, retained earnings and cash flows for
the fiscal quarter then ended and that portion of the Fiscal Year then
ended, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by the
Parent or the Company, as applicable, in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position
or results of operations of any change in the application of accounting
principles and practices during the period, and certified by a Responsible
Officer to present fairly in all material respects the financial condition
of the Parent and its Subsidiaries or the Company and its Subsidiaries, as
applicable, as of their respective dates and the results of operations of
the Parent and its Subsidiaries or the Company and its Subsidiaries, as
applicable, for the respective periods then ended, subject to normal year
end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Parent and its Subsidiaries and the
Company and its Subsidiaries as of the close of such Fiscal Year and
audited Consolidated statements of income, retained earnings and cash flows
for the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year and prepared by an independent
certified public accounting firm acceptable to the Administrative Agent in
accordance with GAAP and, if applicable, containing disclosure of the
effect on the financial position or results of operation of any change in
the application of accounting principles and practices during the year, and
accompanied by a report thereon by such certified public accountants that
is not qualified with respect to scope limitations imposed by the Parent or
any of its Subsidiaries or with respect to accounting principles followed
by the Parent or any of its Subsidiaries not in accordance with GAAP.
(c) Budgets. As soon as practicable and in any event within forty-five
(45) days after the end of each fiscal quarter of each Fiscal Year (except
with respect to the last fiscal quarter of any Fiscal Year, within ninety
(90) days thereafter), an annual budget for the following four quarter
period demonstrating the variation between actual results for the previous
fiscal quarter versus the budget most recently submitted, in each case
accompanied by a certificate from a Responsible Officer to the effect that,
to the best of such Responsible Officer's knowledge, such projections are
good faith estimates of the financial condition and operations of the
Credit Parties and their Subsidiaries for such period.
(d) Business Plans. As soon as practicable and in any event within
five (5) Business Days after its approval by the board of directors of the
Parent, each Business Plan of the Credit Parties and their Subsidiaries in
a format reasonably acceptable to the Required Lenders.
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SECTION 6.2 OFFICER'S COMPLIANCE CERTIFICATE.
At each time financial statements are delivered pursuant to Sections 6.l(a)
and 6.1(b) and at such other times as the Administrative Agent shall reasonably
request, a certificate of a Responsible Officer or the treasurer of the Company,
demonstrating compliance with the financial covenants set forth in Article VIII,
which certificate shall be in the form of Schedule 6.2 attached hereto (an
"Officer's Compliance Certificate").
SECTION 6.3 ACCOUNTANTS' CERTIFICATE.
At each time financial statements are delivered pursuant to Section 6.1(c),
a certificate of the independent public accountants certifying such financial
statements addressed to the Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of
any Default or Event of Default under Article X hereof or, if such is not
the case, specifying such Default or Event of Default and its nature and
period of existence; and
(b) including the calculations prepared by such accountants required
to establish whether or not the Company and its Subsidiaries are in
compliance with the financial covenants set forth in Article X hereof as at
the end of each respective period.
SECTION 6.4 OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to any Credit Party or its board of directors by its independent
public accountants in connection with their auditing function, including,
without limitation, any management report and any management responses
thereto;
(b) Within ten (10) Business Days after the receipt by any Credit
Party or any of its Subsidiaries of notice that any Communications License
held by any of the Credit Parties or otherwise necessary for the operation
of the Network has been lost or canceled, copies of any such notice
accompanied by a report describing the measures undertaken by the Credit
Parties or any of their Subsidiaries to prevent such loss or cancellation
(and the anticipated impact, if any, that such loss or cancellation will
have upon the business of the Credit Parties and their Subsidiaries);
(c) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by any
Credit Party or any of its Subsidiaries with the Securities and Exchange
Commission (the "SEC") and required by the SEC to be delivered to the
shareholders of any Credit Party or any of its Subsidiaries, (ii) each
report made by any Credit Party or any of its Subsidiaries to the SEC on
Form 8-K and (iii) each final registration statement of any Credit Party or
any of its Subsidiaries filed with the SEC; and
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(d) Such other information regarding the operations, business affairs,
financial condition and prospects of any Credit Party or any of its
Subsidiaries as the Administrative Agent or any Lender may reasonably
request.
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS.
(a) Promptly (but in no event later than thirty (30) days after a
Responsible Officer of any Credit Party obtains knowledge thereof) provide
telephonic and written notice of:
(i) the commencement of all material proceedings and material
investigations by or before any Governmental Authority and all
material actions and material proceedings in any court or before any
arbitrator against or involving any Credit Party or any Subsidiary
thereof or any of their respective properties, assets or businesses;
(ii) any notice of any violation received by any Credit Party or
any Subsidiary thereof from any Governmental Authority including,
without limitation, any notice of violation of Environmental Laws
which in any such case could reasonably be expected to have a Material
Adverse Effect;
(iii) any labor controversy that has resulted in a strike or
other work stoppage against any Credit Party or any Subsidiary
thereof;
(iv) any attachment, judgment, lien, levy or order exceeding
$1,000,000 that is assessed against or threatened against any Credit
Party or any Subsidiary thereof;
(v) (A) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit
Plan under Section 401(a) of the Code (along with a copy thereof), (B)
all notices received by any Credit Party or any ERISA Affiliate of the
PBGC's intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan, (C) all notices received by
any Credit Party or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (D) any Credit Party obtaining
knowledge that any Credit Party or any ERISA Affiliate has filed a
notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
(vi) the enactment or promulgation after the date hereof of any
federal, state, provincial or local statute, regulation or ordinance
or judicial or administrative decision or order having a material
effect on a Credit Party or on the operation of the Network Facilities
by any Credit Party or any of its Subsidiaries (including, without
limitation, any statutes, decisions or orders affecting their
telecommunication networks generally and not directed against the
72
Credit Parties or any of their Subsidiaries specifically) which have
been issued or adopted and which could reasonably be expected to have
a Material Adverse Effect;
(vii) any event which makes any of the representations set forth
in Section 5.1 inaccurate in any material respect; and
(viii) all material notices delivered by a Borrower or any of its
Affiliates pursuant to the Sprint Agreements to any of Sprint
Corporation or any of its Affiliates and any material notices
delivered by Sprint Corporation or any of its Affiliates to a Borrower
or any of its Affiliates.
(b) Promptly (but in no event later than five (5) days after a
Responsible Officer of any Credit Party obtains knowledge thereof) provide
telephonic and written notice of any Default or Event of Default, or any
event which constitutes or which with the passage of time or giving of
notice or both would constitute a default or event of default under any
Material Contract to which any Credit Party or any of its Subsidiaries is a
party or by which any Credit Party or any Subsidiary thereof or any of
their respective properties may be bound.
(c) At least three Business Days prior to the execution and delivery
thereof, provide telephonic and written notice of any new Sprint Agreement
or any material amendment, material modification, or termination of any
existing Sprint Agreement; provided, however, if a Credit Party is not a
party to any such amendment or modification, or if a Credit Party does not
have prior knowledge of any such termination, then the Credit Parties shall
provide notice of any such amendment, modification or termination promptly
(but in no event later than five (5) days) after a Responsible Officer of
any Credit Party obtains knowledge thereof.
SECTION 6.6 ACCURACY OF INFORMATION.
All written information, reports, statements and other papers and data
furnished by or on behalf of any Credit Party to the Administrative Agent or any
Lender (other than financial forecasts) whether pursuant to this Article VI or
any other provision of this Agreement, or any of the Security Documents, shall
be, at the time the same is so furnished, complete and correct in all material
respects to the extent necessary to give the Administrative Agent or any Lender
complete, true and accurate knowledge of the subject matter based on such Credit
Parties' knowledge thereof.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until all of the Credit Party Obligations (other than inchoate
indemnity Credit Party Obligations) have been paid and satisfied in full and the
Credit Facilities have been terminated, unless consent has been obtained in the
manner provided for in Section 12.11, each Credit Party will, and will cause
each of their Subsidiaries to:
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SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE AND RELATED MATTERS.
Except as permitted by Section 9.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under applicable
law.
SECTION 7.2 MAINTENANCE OF PROPERTY.
In addition to the requirements of any of the Security Documents, protect
and preserve all properties useful in and material to its business, including
copyrights, patents, trade names and trademarks; maintain in good working order
(excepting ordinary wear and tear) and condition all buildings, equipment and
other tangible real and personal property; and from time to time make or cause
to be made all renewals, replacements and additions to such property reasonably
necessary for the conduct of its business.
SECTION 7.3 INSURANCE.
Maintain with insurance companies that have an A.M. Best rating of A or
better, insurance against such risks and in such amounts as are set forth on
Schedule 7.3 and any additional insurance customarily maintained by similar
businesses and as may be required by applicable law and the Security Documents,
and on the Closing Date and from time to time thereafter deliver to the
Administrative Agent upon its request (a) a detailed list of the insurance then
in effect, stating the names of the insurance companies, the amounts and rates
of the insurance, the dates of the expiration thereof and the properties and
risks covered thereby and (b) a report from an independent insurance broker as
to the insurance then in effect.
SECTION 7.4 ACCOUNTING METHODS AND FINANCIAL RECORDS.
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete in all material respects) as may be required
or as may be necessary to permit the preparation of financial statements in
accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.
SECTION 7.5 PAYMENT AND PERFORMANCE OF CREDIT PARTY OBLIGATIONS.
Pay and perform all Credit Party Obligations under this Agreement and the
other Credit Documents, and pay or perform (a) all taxes, assessments and other
governmental charges that may be levied or assessed upon it or any of its
property, and (b) all other indebtedness, obligations and liabilities in
accordance with customary trade practices; provided, that such Credit Party or
such Subsidiary may contest any item described in clauses (a) or (b) of this
Section 7.5 in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
74
SECTION 7.6 COMPLIANCE WITH LAWS AND APPROVALS.
Observe and remain in material compliance with all applicable laws
applicable to the conduct of its business and maintain in full force and effect
all Governmental Approvals reasonably necessary for the operation of the
Network.
SECTION 7.7 ENVIRONMENTAL LAWS.
In addition to and without limiting the generality of Section 7.6, (a)
comply with, and ensure such compliance by all tenants and subtenants with all
applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of such Credit Party or such
Subsidiary, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 7.8 COMPLIANCE WITH ERISA.
In addition to and without limiting the generality of Section 7.6, (a)
comply in all material respects with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (b) not participate in any prohibited transaction that
could result in any material civil penalty under ERISA or tax under the Code
being imposed upon a Credit Party, (c) operate each Employee Benefit Plan in
such a manner that the Credit Parties will not incur any tax liability under
Section 4980B of the Code that would have a Material Adverse Effect, and (d)
furnish to the Administrative Agent upon the Administrative Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.
SECTION 7.9 COMPLIANCE WITH AGREEMENTS.
Comply in all material respects with each term, condition and provision of
all material leases, agreements or other instruments entered into in the conduct
of its business including, without limitation, any Material Contract; provided,
that such Credit Party or such Subsidiary may contest any such material lease,
agreement or other instrument, or any term, condition or provision of any
Material Contract, in good faith through applicable proceedings so long as
adequate reserves are maintained in accordance with GAAP.
75
SECTION 7.10 CONDUCT OF BUSINESS.
Engage only in the construction and operation of digital wireless
telecommunications networks, the provision of telecommunications and data
services and in lines of business directly related thereto.
SECTION 7.11 VISITS AND INSPECTIONS.
Permit the Administrative Agent or any Lender (or any consultant retained
thereby) upon reasonable notice and during normal business hours, from time to
time and at the Credit Parties' expense, to visit and inspect its properties;
conduct periodic field audits and otherwise inspect, audit and make extracts
from its books, records and files (provided, however, that so long as no Default
or Event of Default shall have occurred and be continuing, the Credit Parties
shall not be required to pay for more than one audit per fiscal year),
including, but not limited to, management letters prepared by independent
accountants, but excluding confidential attorney-client work product; and
discuss with its principal officers, and its independent accountants, its
business, assets, liabilities, financial condition, results of operations and
business prospects.
SECTION 7.12 ADDITIONAL SUBSIDIARIES AND COLLATERAL.
(a) At such time as any Subsidiary of any Credit Party is created or
acquired after the Closing Date, cause to be executed and delivered to the
Administrative Agent (i) a Joinder Agreement such that such Subsidiary
shall become a Guarantor hereunder, (ii) a supplement to the Security
Agreement, a Mortgage for each parcel of real property owned or leased
thereby and such other applicable Security Documents in form and substance
reasonably satisfactory to the Administrative Agent such that the assets of
such Subsidiary shall become Collateral for the Credit Party Obligations,
(iii) a duly executed Pledge Agreement or supplement thereto, with such
changes as the Administrative Agent may reasonably request, such that all
of the Capital Stock or other equity interests of such Subsidiary is
pledged to the Administrative Agent for the ratable benefit of itself and
the Lenders and (iv) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance reasonably
satisfactory thereto with respect to such supplements and agreements and
such other documents and closing certificates as consistent with Article IV
as may be reasonably requested by the Administrative Agent.
(b) Upon the consummation by any Credit Party or any Subsidiary of any
lease with respect to (i) real property (including, without limitation,
retail store sites) at which any material assets or equipment are to be
located, cause to be executed and/or delivered to the Administrative Agent
(A) with respect to each such property that is owned, (x) a Mortgage with
respect to such property and (y) a favorable opinion of counsel to the
Credit Parties addressed to the Administrative Agent and the Lenders and in
form and substance satisfactory to the Administrative Agent, (B) with
respect to each such property that is leased, (x) a copy of the lease and
all related documents and (y) a landlord consent and estoppel letter with
respect to such property, (C) a legal description of the premises, (D)
UCC-1 Financing Statements in form and substance satisfactory to the
76
Administrative Agent with respect to such premises and any other filings or
recordings necessary to perfect the security interests of the Lenders in
all Collateral located at such premises, and (E) each additional document,
instrument or other item of information reasonably requested by the
Administrative Agent; (ii) SBA cell sites, cause to be executed and
delivered (A) all amendments deemed necessary or advisable by the
Administrative Agent to all applicable SBA Agreements, and (B) UCC-1
Financing Statements in form and substance satisfactory to the
Administrative Agent with respect to such premises and each additional
document, instrument or other item of information reasonably requested by
the Administrative Agent; and (iii) Non-SBA collocation sites, cause to be
executed and/or delivered to the Administrative Agent (A) a Collateral
Assignment of Contract Rights and, if requested by the Administrative
Agent, a Consent in connection therewith, (B) a legal description of the
premises, (C) a copy of the lease and all related documents, (D) UCC-1
Financing Statements in form and substance satisfactory to the
Administrative Agent with respect to such premises and any other filings or
recordings necessary to perfect the security interests of the Lenders in
all Collateral located at such premises, and (E) each additional document,
instrument or other item of information reasonably requested by the
Administrative Agent.
(c) Promptly deliver from time to time such additional Security
Documents to the Administrative Agent upon the reasonable request of the
Required Lenders with respect to any assets of any such Person not subject
to an existing Lien in favor of the Administrative Agent for the ratable
benefit of itself and the Lenders.
SECTION 7.13 HEDGING AGREEMENTS.
Within sixty (60) days after the Closing Date, the Borrowers shall have
entered into Hedging Agreements with a minimum notional amount equal to fifty
percent (50%) of the outstanding principal balance of the Borrowers' borrowed
money Indebtedness for a period of not less than three (3) years at an interest
rate and upon other terms and conditions reasonably satisfactory to the
Administrative Agent.
SECTION 7.14 USE OF PROCEEDS.
Use the proceeds of the Loans (a) to finance the direct cost of the
construction and operation of a regional digital wireless telecommunications
network on the Sprint PCS System, (b) to finance transaction costs and expenses
related to the Initial Equity Offering (as defined herein), the High Yield
Offering (as defined herein) and the closing of this Credit Agreement, (c) to
repay certain existing Indebtedness (including, without limitation, Indebtedness
under the Existing Credit Agreement), (d) to make payments under the Supply
Agreement and (e) to finance working capital and other general corporate
purposes.
SECTION 7.15 LANDLORD WAIVERS.
Use its commercially reasonable best efforts to deliver to the
Administrative Agent, within 30 days after the Closing Date, any landlord waiver
reasonably requested by the Administrative Agent and not previously delivered
pursuant to Section 4.2(c)(v).
77
SECTION 7.16 FURTHER ASSURANCES.
Make, execute and deliver all such additional and further acts, things,
deeds and instruments as the Administrative Agent or any Lender may reasonably
require to document and consummate the transactions contemplated hereby and to
vest completely in and insure the Administrative Agent and the Lenders their
respective rights under this Agreement, the Notes, the Letters of Credit and the
other Credit Documents.
ARTICLE VIII
FINANCIAL COVENANTS
SECTION 8.1 STAGE 1 COVENANTS.
Until all of the Credit Party Obligations (other than inchoate indemnity
Credit Party Obligations) have been paid and satisfied in full and the Credit
Facilities have been terminated, unless consent has been obtained in the manner
set forth in Section 12.11 hereof, during the Stage 1 Covenant Period the Credit
Parties will not:
(a) Total Debt to Total Capitalization Ratio: As of any date of
determination, permit the ratio of (i) Total Debt of the Parent and its
Subsidiaries on such date to (ii) Total Capitalization of the Parent and
its Subsidiaries on such date to be greater than .75 to 1.0.
(b) Senior Debt to Total Capitalization Ratio. As of any date of
determination, permit the ratio of (i) Senior Debt of the Parent and its
Subsidiaries (excluding for purposes hereof, the Permitted Parent Debt) on
such date to (ii) Total Capitalization of the Parent and its Subsidiaries
on such date to be greater than .45 to 1.0.
(c) Minimum Covered POPS. As of the last day of each fiscal quarter
occurring during the Stage 1 Covenant Period, permit the Covered Population
to be less than the amount set forth opposite the period below in which
such fiscal quarter end occurs:
Fiscal Quarter Ended Amount
----------------------------------------- -------------------------
September 30, 2000 1,900,000
----------------------------------------- -------------------------
December 31, 2000 3,950,000
----------------------------------------- -------------------------
March 31, 2001 through 3,990,000
June 30, 2001
----------------------------------------- -------------------------
September 30, 2001 through 5,590,000
December 31, 2001
----------------------------------------- -------------------------
March 31, 2002 through 5,640,000
December 31, 2002
----------------------------------------- -------------------------
78
Fiscal Quarter Ended Amount
----------------------------------------- -------------------------
March 31, 2003 through 5,690,000
December 31, 2003
----------------------------------------- -------------------------
March 31, 2004 5,710,000
----------------------------------------- -------------------------
(d) EBITDA. As of the last day of each fiscal quarter occurring during
the Stage 1 Covenant Period, (i) permit the Consolidated EBITDA gains for
the Borrowers on a combined basis for such fiscal quarter to be less than
the amount set forth below opposite such date or (ii) permit the
Consolidated EBITDA losses for the Borrowers on a combined basis for such
fiscal quarter to exceed the amount set forth below opposite such date, as
applicable:
Fiscal Quarter Ended Amount
- ----------------------------------------- -----------------------------
September 30, 2000 ($13,000,000)
- ----------------------------------------- -----------------------------
December 31, 2000 ($20,000,000)
- ----------------------------------------- -----------------------------
March 31, 2001 ($13,250,000)
- ----------------------------------------- -----------------------------
June 30, 2001 ($12,000,000)
- ----------------------------------------- -----------------------------
September 30, 2001 ($18,000,000)
- ----------------------------------------- -----------------------------
December 31, 2001 ($23,000,000)
- ----------------------------------------- -----------------------------
March 31, 2002 ($6,000,000)
- ----------------------------------------- -----------------------------
June 30, 2002 ($5,000,000)
- ----------------------------------------- -----------------------------
September 30, 2002 ($9,500,000)
- ----------------------------------------- -----------------------------
December 31, 2002 ($17,500,000)
- ----------------------------------------- -----------------------------
March 31, 2003 $3,000,000
- ----------------------------------------- -----------------------------
June 30, 2003 $5,000,000
- ----------------------------------------- -----------------------------
September 30, 2003 $1,500,000
- ----------------------------------------- -----------------------------
December 31, 2003 ($6,000,000)
- ----------------------------------------- -----------------------------
March 31, 2004 $12,100,000
- ----------------------------------------- -----------------------------
(e) Minimum Total Revenues. As of the last day of each fiscal quarter
occurring during the Stage 1 Covenant Period, permit Total Revenues to be
equal or less than the amount set forth below opposite such date:
Fiscal Quarter Ended Amount
- ------------------------------------ ---------------------------------
September 30, 2000 $4,311,000
- ------------------------------------ ---------------------------------
December 31, 2000 $6,416,000
- ------------------------------------ ---------------------------------
March 31, 2001 $8,500,000
- ------------------------------------ ---------------------------------
June 30, 2001 $10,500,000
- ------------------------------------ ---------------------------------
September 30, 2001 $13,500,000
- ------------------------------------ ---------------------------------
December 31, 2001 $18,000,000
- ------------------------------------ ---------------------------------
March 31, 2002 $22,400,000
- ------------------------------------ ---------------------------------
June 30, 2002 $24,500,000
- ------------------------------------ ---------------------------------
September 30, 2002 $30,000,000
- ------------------------------------ ---------------------------------
79
Fiscal Quarter Ended Amount
- ------------------------------------ ---------------------------------
December 31, 2002 $34,000,000
- ------------------------------------ ---------------------------------
March 31, 2003 $40,500,000
- ------------------------------------ ---------------------------------
June 30, 2003 $43,000,000
- ------------------------------------ ---------------------------------
September 30, 2003 $47,000,000
- ------------------------------------ ---------------------------------
December 31, 2003 $52,000,000
- ------------------------------------ ---------------------------------
March 31, 2004 $53,500,000
- ------------------------------------ ---------------------------------
(f) Minimum PCS Subscribers. As of the last day of each fiscal quarter
occurring during the Stage 1 Covenant Period, permit the number of PCS
Subscribers to be less than the number of PCS Subscribers set forth below
opposite such date:
Fiscal Quarter Ended Amount
-------------------------------------- ---------------------------------
September 30, 2000 30,800
-------------------------------------- ---------------------------------
December 31, 2000 43,000
-------------------------------------- ---------------------------------
March 31, 2001 58,000
-------------------------------------- ---------------------------------
June 30, 2001 71,000
-------------------------------------- ---------------------------------
September 30, 2001 92,000
-------------------------------------- ---------------------------------
December 31, 2001 133,000
-------------------------------------- ---------------------------------
March 31, 2002 147,000
-------------------------------------- ---------------------------------
June 30, 2002 163,000
-------------------------------------- ---------------------------------
September 30, 2002 207,000
-------------------------------------- ---------------------------------
December 31, 2002 263,000
-------------------------------------- ---------------------------------
March 31, 2003 281,000
-------------------------------------- ---------------------------------
June 30, 2003 297,000
-------------------------------------- ---------------------------------
September 30, 2003 333,000
-------------------------------------- ---------------------------------
December 31, 2003 398,000
-------------------------------------- ---------------------------------
March 31, 2004 432,600
-------------------------------------- ---------------------------------
(g) Maximum Capital Expenditures: Permit Capital Expenditures made during
each fiscal year occurring during the Stage 1 Covenant Period to exceed the
corresponding amount set forth below:
-------------------------------------- ---------------------------------
Fiscal Year Amount
-------------------------------------- ---------------------------------
2000 $128,900,000
-------------------------------------- ---------------------------------
2001 $94,300,000
-------------------------------------- ---------------------------------
2002 $23,800,000
-------------------------------------- ---------------------------------
2003 $23,800,000
-------------------------------------- ---------------------------------
; provided, however, if any portion of the annual Capital Expenditure limitation
is not used during any fiscal year referred to above, such unused amount may be
80
carried forward (the "Carry-Forward Amount") and used in the next fiscal year
only; provided, further, that with respect to any fiscal year, Capital
Expenditures made during such fiscal year shall be deemed to be made first with
respect to the applicable limitation for such year and then with respect to any
Carry-Forward Amount to the extent applicable.
SECTION 8.2 STAGE 2 COVENANTS.
Until all of the Credit Party Obligations (other than inchoate indemnity
Credit Party Obligations) have been paid and satisfied in full and the Credit
Facilities have been terminated, unless consent has been obtained in the manner
set forth in Section 12.11 hereof, during the Stage 2 Covenant Period the Credit
Parties will not:
(a) Leverage Ratio: As of any fiscal quarter end during the applicable
period set forth below, permit the ratio of (i) Total Debt of the Credit
Parties and their Subsidiaries to (ii) the product of Consolidated EBITDA
of the Credit Parties and their Subsidiaries for the six-month period
ending on such fiscal quarter end multiplied by two (2) (the "Leverage
Ratio") to exceed the corresponding ratio set forth below:
- ----------------------------------------- ------------------------------------
Period Ratio
- ----------------------------------------- ------------------------------------
June 30, 2004 through 8.00 to 1.0
December 31, 2004
- ----------------------------------------- ------------------------------------
March 31, 2005 6.00 to 1.0
- ----------------------------------------- ------------------------------------
June 30, 2005 through 5.00 to 1.0
December 31, 2005
- ----------------------------------------- ------------------------------------
March 31, 2006 4.00 to 1.0
- ----------------------------------------- ------------------------------------
June 30, 2006 and thereafter 3.50 to 1.0
- ----------------------------------------- ------------------------------------
81
(b) Senior Leverage Ratio: As of any fiscal quarter end during the
applicable period set forth below, permit the ratio of (i) Senior Debt to
(ii) the product of Consolidated EBITDA of the Borrowers and their
Subsidiaries for the six-month period ending on such fiscal quarter end
multiplied by two (2) to exceed the corresponding ratio set forth below:
- ----------------------------------------------- ----------------------------
Period Ratio
- ----------------------------------------------- ----------------------------
June 30, 2004 through 3.00 to 1.0
December 31, 2004
- ----------------------------------------------- ----------------------------
March 31, 2005 through 2.50 to 1.0
December 31, 2005
- ----------------------------------------------- ----------------------------
March 31, 2006 and thereafter 2.00 to 1.0
- ----------------------------------------------- ----------------------------
(c) Interest Coverage Ratio: As of any fiscal quarter end during the
applicable period set forth below, permit the ratio of (i) Consolidated
EBITDA of the Credit Parties and their Subsidiaries for the six-month
period ending on such fiscal quarter end to (ii) Consolidated Interest
Expense of the Credit Parties and their Subsidiaries for the six-month
period ending on such fiscal quarter end, to be less than the corresponding
ratio set forth below:
- ------------------------------------------ ------------------------------------
Period Ratio
- ------------------------------------------ ------------------------------------
June 30, 2004 through 1.00 to 1.0
December 31, 2004
- ------------------------------------------ ------------------------------------
March 31, 2005 1.25 to 1.0
- ------------------------------------------ ------------------------------------
June 30, 2005 through 1.50 to 1.0
December 31, 2005
- ------------------------------------------ ------------------------------------
March 31, 2006 1.75 to 1.0
- ------------------------------------------ ------------------------------------
June 30, 2006 through 2.00 to 1.0
September 30, 2006
- ------------------------------------------ ------------------------------------
December 31, 2006 2.25 to 1.0
- ------------------------------------------ ------------------------------------
March 31, 2007 through 2.50 to 1.0
September 30, 2007
- ------------------------------------------ ------------------------------------
December 31, 2007 2.75 to 1.0
- ------------------------------------------ ------------------------------------
March 31, 2008 and thereafter 3.00 to 1.0
- ------------------------------------------ ------------------------------------
(d) Fixed Charge Coverage Ratio: As of any fiscal quarter end during
the applicable period set forth below, permit the ratio of (i) Consolidated
EBITDA of the Credit Parties and their Subsidiaries for the six-month
period ending on such fiscal quarter end times two (2) to (ii) Consolidated
82
Fixed Charges of the Credit Parties and their Subsidiaries for the period
of four (4) consecutive fiscal quarters ending on such fiscal quarter end,
to be less than the corresponding ratio set forth below:
- ------------------------------------------ ------------------------------------
Period Ratio
- ------------------------------------------ ------------------------------------
June 30, 2005 through 1.00 to 1.0
December 31, 2005
- ------------------------------------------ ------------------------------------
March 31, 2006 and thereafter 1.15 to 1.0
- ------------------------------------------ ------------------------------------
(e) Maximum Capital Expenditures: Permit Capital Expenditures made
during any fiscal year occurring during the Stage 2 Covenant Period to
exceed $19,578,000 in the aggregate; provided, however, if any portion of
the annual Capital Expenditure limitation is not used during any fiscal
year referred to above, the Carry-Forward Amount may be used in the next
fiscal year only; provided, further, that with respect to any fiscal year,
Capital Expenditures made during such fiscal year shall be deemed to be
made first with respect to the applicable limitation for such year and then
with respect to any Carry-Forward Amount to the extent applicable.
ARTICLE IX
NEGATIVE COVENANTS
Until all of the Credit Party Obligations (other than inchoate indemnity
Credit Party Obligations) have been paid and satisfied in full and the Credit
Facilities have been terminated, unless consent has been obtained in the manner
set forth in Section 12.11 hereof, the Credit Parties shall not and shall not
permit any of their Subsidiaries to:
SECTION 9.1 LIMITATIONS ON INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness except:
(a) the Credit Party Obligations;
(b) Indebtedness of the Borrowers incurred in connection with a
Hedging Agreement with a counterparty and upon terms and conditions
(including interest rate) reasonably satisfactory to the Administrative
Agent;
(c) Indebtedness of the Parent arising under the Permitted Parent Debt
Documents in an original issue principal amount not to exceed $150,000,000
(such Indebtedness, the "Permitted Parent Debt");
(d) Indebtedness existing on the Closing Date and not otherwise
permitted under or referred to in this Section 9.1, as set forth on
Schedule 5.1(t), and the renewal and refinancing (but not the increase of
the aggregate principal amount) thereof;
83
(e) Indebtedness of the Borrowers and their Subsidiaries not to exceed
$10,000,000 on any date of determination which may be used for (i) Capital
Leases, (ii) purchase money Indebtedness, (iii) short-term debt in the
ordinary course of business, or (iv) any other use consented to in writing
by the Required Lenders (such consent not to be unreasonably withheld,
delayed or denied); and
(f) Indebtedness consisting of Guaranty Obligations permitted by
Section 9.2.
provided, that none of the Indebtedness permitted to be incurred by this Section
shall restrict, limit or otherwise encumber (by covenant or otherwise) the
ability of any Subsidiary of the Borrowers to make any payment to any Borrower
or any Subsidiary of any Borrower (in the form of dividends, intercompany
advances or otherwise) for the purpose of enabling such Borrower to pay the
Credit Party Obligations.
SECTION 9.2 LIMITATIONS ON GUARANTY OBLIGATIONS.
Create, incur, assume or suffer to exist any Guaranty Obligations except:
(a) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(b) Guaranty Obligations in respect of the Permitted Parent Debt; and
(c) Other Guaranty Obligations in an aggregate amount not to exceed
$2,000,000 at any time outstanding.
SECTION 9.3 LIMITATIONS ON LIENS.
Create, incur, assume or suffer to exist, any Lien on or with respect to
any of its assets or properties (including without limitation shares of Capital
Stock or other ownership interests), real or personal, whether now owned or
hereafter acquired, except the following permitted Liens ("Permitted Liens"):
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of
ERISA or Environmental Laws) with respect to obligations not yet due or as
to which the period of grace (not to exceed thirty (30) days), if any,
related thereto has not expired or which are being contested in good faith
and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred
in the ordinary course of business, (i) which are not overdue for a period
of more than thirty (30) days or (ii) which are being contested in good
faith and by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
84
under workers' compensation, unemployment insurance or similar legislation
or obligations (not to exceed $50,000) under customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of
real property, which in the aggregate are not substantial in amount and
which do not, in any case, detract from the value of such property or
impair the use thereof in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens evidencing the interest of lessors under Capital Leases
permitted by Section 9.1(e) and Liens securing any purchase money
Indebtedness permitted under Section 9.1(e); provided that with respect to
any such purchase money Liens, (i) such Liens shall be created
substantially simultaneously with the acquisition of the related asset,
(ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness together with accessions thereto,
replacements and substitutions therefor and proceeds thereof, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed one hundred percent (100%) of the original purchase price of such
property at the time it was acquired; and
(g) Liens existing on the Closing Date and set forth on Schedule
9.3(g) attached hereto.
SECTION 9.4 LIMITATIONS ON LOANS, ADVANCES, INVESTMENTS AND ACQUISITIONS.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
Capital Stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of
Indebtedness or other obligation or security, substantially all or a portion of
the business or assets of any other Person or any other investment or interest
whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person (collectively, "Investments")
except:
(a) Investments not otherwise permitted by this Section 9.4 in
Subsidiaries existing on the Closing Date and the other existing loans,
advances and Investments not otherwise permitted by this Section 9.4
described on Schedule 9.4;
(b) Investments by any Credit Party in another Credit Party other than
the Parent;
(c) Investments by any Credit Party in cash and Cash Equivalents;
(d) Investments by any Credit Party in the form of acquisitions of all
or substantially all of the business or a line of business (whether through
a merger, the acquisition of Capital Stock, assets or any combination
thereof) of any other Person so long as (i) the aggregate amount of all
85
such acquisitions does not exceed $20,000,000 in any fiscal year and
$50,000,000 in the aggregate for all such acquisitions without the consent
of the Required Lenders; provided, however, if such acquisition is made
exclusively with Capital Stock of the Parent, such acquisition shall be
excluded in determining compliance with this clause (i), (ii) the
Administrative Agent (for the benefit of the Lenders) receives a
first-priority perfected security interest in or Lien on all Capital Stock
and assets acquired in any such acquisition, (iii) on a pro forma basis,
the Credit Parties shall have demonstrated compliance with the provisions
of Article VIII hereof in a manner reasonably acceptable to the
Administrative Agent and (iv) both before and after giving effect to such
acquisition, no Default or Event of Default shall exist;
(e) loans and advances to officers, directors and employees of the
Credit Parties in an aggregate amount not to exceed $500,000 at any time
outstanding; and
(f) any Investment not otherwise permitted hereunder in an aggregate
amount not to exceed $5,000,000.
SECTION 9.5 LIMITATIONS ON MERGERS AND LIQUIDATION.
Merge, consolidate or enter into any similar combination with any other
Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:
(a) any Wholly-Owned Subsidiary of any Borrower may merge with any
other Wholly-Owned Subsidiary of any Borrower or with a Borrower;
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire (or such Person may merge
into a Borrower or a Wholly-Owned Subsidiary of a Borrower) in connection
with an acquisition or merger permitted by Section 9.4(c) so long as (i)
both before and after giving effect to such merger, no Default or Event of
Default shall exist and (ii) if such merger involves a Borrower, such
Borrower shall be the surviving entity; and
(c) any Wholly-Owned Subsidiary of any Borrower may liquidate or
wind-up into such Borrower or any other Wholly-Owned Subsidiary of such
Borrower.
SECTION 9.6 LIMITATIONS ON SALE OF ASSETS.
Convey, sell, lease, assign, transfer or otherwise dispose of any of (a
"Transfer") its property, business or assets (including, without limitation, the
sale of any receivables and leasehold interests and any sale-leaseback or
similar transaction), whether now owned or hereafter acquired except:
(a) the sale or lease by any Credit Party in the ordinary course of
business of any portion of the Network not then in use by such Credit Party
and, in the case of a sale, not contemplated to be used thereby; provided
that the Net Cash Proceeds thereof are applied to prepay the Loans in
accordance with Section 3.3;
86
(b) the sale by any Credit Party of (i) assets no longer used or
usable in the business of the Credit Parties or any of their Subsidiaries,
so long as the aggregate amount of such Net Cash Proceeds from such sales
pursuant to this subsection (b)(i) in any one fiscal year does not exceed
$2,000,000, (ii) inventory in the ordinary course of such Person's business
and (iii) Lucent equipment to Sprint Corporation so long as such sale is
(A) a one-time sale occurring prior to December 31, 2000 and (B) does not
exceed $4,000,000 in the aggregate;
(c) the transfer of assets to any Borrower or any Wholly-Owned
Subsidiary of any Borrower pursuant to Section 9.5(c);
(d) any asset sale not referenced above under this Section 9.6 in an
aggregate amount for all such sales not to exceed $2,000,000 during any
fiscal year, as long as such sale is in the ordinary course of business and
the Net Cash Proceeds thereof are, if applicable, applied to prepay the
Loans in accordance with Sections 3.3;
provided, that in each case (except for subsection (c) above) at least 75% of
the consideration received therefor by any Credit Party or any Subsidiary of
such Credit Party is in the form of cash or Cash Equivalents.
SECTION 9.7 LIMITATIONS ON DIVIDENDS AND DISTRIBUTIONS.
Declare or pay any dividends upon any of its Capital Stock or other equity
interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its Capital Stock or other equity interests; return
capital of the Borrowers to the Parent; or make any distribution of cash,
property or assets among the holders of shares of its Capital Stock or make
other payments or distributions to any Affiliate of any Credit Party or any of
its Subsidiaries, in each case with respect to its Capital Stock or in its
capacity as holder of Capital Stock; provided that (a) each Credit Party may
make dividends payable solely in the same class of Capital Stock of such Person,
(b) each Credit Party may make dividends or other distributions payable to the
Borrowers and (c) if no Default or Event of Default has occurred and is
continuing nor would occur as a result thereof (i) the Borrowers may make
payments to the Parent to pay (A) corporate overhead or administrative costs in
an aggregate amount not to exceed $150,000 during any fiscal year and (B)
amounts necessary to pay liquidated damages payable by the Parent as a result of
a Registration Default (as defined in the Warrant Registration Rights Agreement
dated as of the Closing Date among the Parent and the initial purchasers named
therein and the Note Registration Rights Agreement dated as of the Closing Date
among the Parent, the subsidiary guarantors named therein and the initial
purchasers named therein) such amounts not to exceed $1,000,000 in the
aggregate, (ii) a Credit Party may repurchase shares of its Capital Stock
pursuant to the exercise of rights of first refusal granted in connection with a
proposed sale of such Capital Stock by an option-holder who has exercised stock
options pursuant to an option plan approved by the board of directors of such
Credit Party in an aggregate amount not to exceed $3,000,000 during any fiscal
year, (iii) a Credit Party may make payments as required pursuant to the
contracts set forth on Schedule 9.9 as in effect on the Closing Date and in the
amounts stated on such Schedule, (iv) the Borrowers may make distributions to
the Parent to make regularly scheduled payments of interest on Permitted Parent
Debt, (v) the Company may dividend or distribute shares of Horizon Telcom, Inc.
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that it owns to the Parent and the Parent may dividend or distribute such shares
of Horizon Telcom, Inc. to its shareholders and (vi) at any time prior to April
30, 2001, the Parent may redeem its Series A-1 Convertible Preferred Capital
Stock in an aggregate amount not to exceed $86,000,000 pursuant to Article 4,
Subpart C, Subsection F(2)(i) of the Parent's Amended and Restated Articles of
Incorporation with proceeds of an initial public offering of the Parent's
Capital Stock in an aggregate amount yielding proceeds of not less than
$86,000,000 in the aggregate.
SECTION 9.8 LIMITATIONS ON EXCHANGE AND ISSUANCE OF CAPITAL STOCK.
After the Closing Date, issue, sell or otherwise dispose of any class or
series of Capital Stock that, by its terms or by the terms of any security into
which it is convertible or exchangeable, is, or upon the happening of an event
or passage of time would be, (a) convertible or exchangeable into Indebtedness
or (b) except as permitted by Section 9.7(c)(ii) and (vii), required to be
redeemed or repurchased, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or passage of time would have, a
redemption or similar payment due unless any such redemptive right is
subordinate to the repayment in full of the Credit Party Obligations and is not
subject to any redemption or repurchase prior to the repayment in full of the
Credit Party Obligations.
SECTION 9.9 TRANSACTIONS WITH AFFILIATES.
Except as otherwise permitted pursuant to the terms of this Agreement,
directly or indirectly (a) make any loan or advance to, or purchase or assume
any note or other obligation to or from, any of its officers, directors,
shareholders or other Affiliates (other than a Credit Party), or to or from any
member of the family of any of its officers, directors, shareholders or other
Affiliates, or subcontract any operations to any of its Affiliates (other than a
Credit Party), (b) except for the contractual obligations set forth in Schedule
9.9, enter into, or be a party to, any other transaction with any of its
Affiliates (other than a Credit Party), except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are fully
disclosed to and approved in writing by the Administrative Agent prior to the
consummation thereof and are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 9.10 CERTAIN ACCOUNTING CHANGES.
Change its Fiscal Year end, or make any change in its accounting treatment
and reporting practices except as required or permitted by GAAP.
SECTION 9.11 AMENDMENTS; PAYMENTS AND PREPAYMENTS OF SUBORDINATED DEBT.
Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Permitted Parent Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or voluntarily redeem or acquire
for value (including without limitation by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of paying
when due) any Permitted Parent Debt, in each case in any material respect which
is adverse to the interests of the Lenders (as determined by the Administrative
Agent); provided, however, (a) the Parent may redeem up to 35% in the aggregate
of the outstanding principal amount of the Permitted Parent Debt and pay any
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penalties, premiums or accrued interest with respect thereto with the Net Cash
Proceeds from any Equity Issuance and (b) the Parent may exchange notes that
evidence the Permitted Parent Debt for new notes in accordance with the terms of
the Permitted Parent Debt Documents.
SECTION 9.12 CHARTER DOCUMENTS; MATERIAL CONTRACTS.
Amend or modify (a) the articles or certificate of incorporation or the
by-laws of any Credit Party or (b) any Material Contract, in each case in any
material respect which is adverse to the interests of the Lenders (as determined
by the Administrative Agent).
SECTION 9.13 RESTRICTIVE AGREEMENTS.
Enter into any Indebtedness (other than the Permitted Parent Debt) which
contains any negative pledge on assets or any covenants more restrictive than
the provisions of Articles VIII, IX and X hereof; or which restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such
Indebtedness.
SECTION 9.14 STAY, EXTENSION AND USURY LAWS.
Insist upon, plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Credit Agreement or the other Credit Documents; and each of the Credit
Parties (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Administrative Agent, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
ARTICLE X
DEFAULT AND REMEDIES
SECTION 10.1 EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrowers shall default in any payment of principal of any
Loan, Note or Reimbursement Obligation when and as due (whether at
maturity, by reason of acceleration or otherwise).
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(b) Other Payment Default. The Borrowers shall default in the payment
when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan, Note or Reimbursement Obligation or the
payment of any other Obligation, and such default shall continue unremedied
for three (3) Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by any Credit Party under this Agreement, any Credit Document or
any amendment hereto or thereto, shall at any time prove to have been
incorrect or misleading in any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. Any Credit Party, as
applicable, shall default in the performance or observance of any covenant
or agreement contained in Sections 6.1, 6.2 or 6.5(e), Section 7.3 or
Articles VIII or IX of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. Any
Credit Party shall default in the performance or observance of any term,
covenant, condition or agreement contained in this Agreement (other than as
specifically provided for otherwise in this Section 10.1) or any other
Credit Document and such default shall continue for a period of thirty (30)
days after written notice thereof has been given to the Company by the
Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by a
Borrower under any Hedging Agreement and such amount is not paid within
thirty (30) Business Days of the due date thereof.
(g) Indebtedness Cross-Default. Any Credit Party shall (i) default in
the payment of any Indebtedness (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which Indebtedness is in
excess of $250,000 beyond the period of grace or cure if any, provided in
the instrument or agreement under which such Indebtedness was created, or
(ii) default in the observance or performance of any other agreement or
condition relating to any Indebtedness (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which
Indebtedness is in excess of $250,000 or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, with the giving of notice if required, any such Indebtedness to
become due prior to its stated maturity (any applicable grace or cure
period having expired).
(h) Other Cross-Defaults.
(i) Any Credit Party shall default in the payment when due, or in
the performance or observance, of any material obligation or material
condition of any Material Contract unless, but only as long as, the
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existence of any such default is being contested by such Credit Party
in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of such Credit
Party to the extent required by GAAP.
(ii) Any Event of Default (as such term is defined in the
Permitted Parent Debt Documents) shall occur and be continuing; the
Guarantee Obligations (as such term is defined in the Permitted Parent
Debt Documents) shall cease, for any reason, to be validly
subordinated to the Credit Party Obligations as provided in the
Permitted Parent Debt Documents, or any Credit Party or any of its
Subsidiaries shall so assert; this Credit Agreement and the
Indebtedness evidenced hereby shall cease, for any reason, to be
considered the Senior Financing and Senior Debt (as such terms are
defined in the Permitted Parent Debt Documents), respectively, for
purposes of the Permitted Parent Debt Documents; or the Parent shall
fail to contribute the Net Cash Proceeds from the Initial Equity
Offering and the Permitted Parent Debt to the Borrower pursuant to the
terms of Section 4.3(b).
(i) Change in Control. (i) Existing Shareholders shall cease to own or
control shares of common stock or other voting securities which constitute
more than 51% of the voting rights of the Parent or (ii) any person or
group of persons (within the meaning of Section 14(d) of the Securities
Exchange Act of 1934, as amended) other than Existing Shareholders shall
obtain ownership or control in one or more series of transactions of more
than thirty-five (35%) of the voting rights of the Parent or control of the
board of directors of the Parent or (iii) any Borrower shall no longer be a
Wholly-Owned Subsidiary of the Parent or any such Person shall be party to
any agreement which contemplates that it shall not be such a Wholly-Owned
Subsidiary or (iv) during any period of up to 24 consecutive months,
commencing after the Closing Date, individuals who at the beginning of such
24 month period were directors of the Parent (together with any new
director whose election by the Parent's board of directors or whose
nomination for election by the Parent's shareholders was approved by a vote
of at least two-thirds of the directors then still in office who either
were 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 directors of the Parent then in office or (v)
there shall have occurred under any indenture or other instrument
evidencing any Indebtedness in excess of $1,000,000 any "change in control"
(as defined in such indenture or other evidence of Indebtedness) obligating
any Credit Party to repurchase, redeem or repay all or any part of the
Indebtedness or Capital Stock provided for therein (any such event, a
"Change in Control").
(j) Voluntary Bankruptcy Proceeding. Any Credit Party or any
Subsidiary thereof shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition
seeking to take advantage of any other laws, domestic or foreign, relating
to bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case
under such bankruptcy laws or other laws, (iv) apply for or consent to, or
fail to contest in a timely and appropriate manner, the appointment of; or
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the taking of possession by, a receiver, custodian, trustee, or liquidator
of itself or of a substantial part of its property, domestic or foreign,
(v) admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit of creditors, or (vii) take
any corporate action for the purpose of authorizing any of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against any Credit Party or any Subsidiary thereof in
any court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like for any Credit Party or any
Subsidiary thereof or for all or any substantial part of their respective
assets, domestic or foreign, and such case or proceeding shall continue
without dismissal or stay for a period of sixty (60) consecutive days, or
an order granting the relief requested in such case or proceeding
(including, but not limited to, an order for relief under such federal
bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any material provision of this Agreement or
of any other Credit Document shall for any reason cease to be valid and
binding on any Credit Party or Subsidiary party thereto or any such Person
shall so state in writing, or this Agreement or any other Credit Document
shall for any reason cease to create a valid and perfected first priority
Lien on, or security interest in, a material portion of the collateral
purported to be covered thereby, in each case other than in accordance with
the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following events:
(i) an accumulated funding deficiency exists, whether or not waived, with
respect to any Pension Plan which is reasonably likely to result in a
Material Adverse Effect, (ii) a Termination Event which is reasonably
likely to result in a Material Adverse Effect or (iii) any Credit Party or
any ERISA Affiliate as employers under one or more Multiemployer Plan makes
a complete or partial withdrawal from any such Multiemployer Plan and the
plan sponsor of such Multiemployer Plans notifies such withdrawing employer
that such employer has incurred a withdrawal liability requiring payments
in an amount which is reasonably likely to result in a Material Adverse
Effect.
(n) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments to exceed $250,000 shall
be entered against any Credit Party or any of its Subsidiaries by any court
and such judgment or order shall continue without discharge or stay for a
period of sixty (60) days.
(o) Loss of License. Any Communications License of any Credit Party or
any Subsidiary thereof or of Sprint Corporation or any of its Affiliates,
which Communications License is used in the Network, shall expire,
terminate, be canceled or otherwise lost or any application therefor be
rejected, which event could reasonably be expected to have a Material
Adverse Effect.
(p) Sprint Agreements. (i) The termination of any Sprint Agreement, or
the occurrence of any "Event of Termination" as defined in any Sprint
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Agreement, (ii) the occurrence of any breach or default under the Sprint
Consent (other than a breach or default by the Administrative Agent) which
breach or default entitles the Administrative Agent to exercise a right or
remedy under or in connection with the Sprint Consent or (iii) the
occurrence of any termination, invalidity or unenforceability with respect
to any Sprint Agreement or the Sprint Consent or with respect to any
material term or provision contained therein or relating thereto in any
manner adverse to the interests of the Credit Parties or the Lenders
hereunder.
SECTION 10.2 REMEDIES.
Upon the occurrence and during the continuance of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Company:
(a) Acceleration; Termination of Credit Facilities. Declare the
principal of and interest on the Loans, the Notes and the Reimbursement
Obligations at the time outstanding, and all other amounts owed to the
Lenders and to the Administrative Agent under this Agreement or any of the
other Credit Documents (other than any Hedging Agreement) (including,
without limitation, all LOC Obligations, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Credit Party Obligations
(other than obligations owing under any Hedging Agreement), to be forthwith
due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind,
all of which are expressly waived, anything in this Agreement or the other
Credit Documents to the contrary notwithstanding, and terminate the Credit
Facilities and any right of the Borrowers to request borrowings or Letters
of Credit thereunder; provided, that upon the occurrence of an Event of
Default specified in Section 10.1(j) or (k), the Credit Facilities shall be
automatically terminated and all Credit Party Obligations (other than
obligations owing under any Hedging Agreement) shall automatically become
due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time
of an acceleration pursuant to the preceding paragraph, require the
Borrowers at such time to deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit shall have expired or been
fully drawn upon, if any, shall be applied to repay the other Credit Party
Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied
and all other Credit Party Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrowers.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Credit Documents
and applicable law, in order to satisfy all of the Credit Party
Obligations.
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SECTION 10.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC.
The enumeration of the rights and remedies of the Administrative Agent and
the Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Credit Documents or that may now or hereafter exist in
law or in equity or by suit or otherwise. No delay or failure to take action on
the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any Credit Party, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Credit Documents or to
constitute a waiver of any Event of Default.
ARTICLE XI
THE ADMINISTRATIVE AGENT
SECTION 11.1 APPOINTMENT.
Each of the Lenders hereby irrevocably designates and appoints First Union
as Administrative Agent of such Lender under this Agreement and the other Credit
Documents for the term hereof and each such Lender irrevocably authorizes First
Union as Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and such other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Credit Documents, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Credit Documents or otherwise exist against the
Administrative Agent. Any reference to the Administrative Agent in this Article
XI shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.
SECTION 11.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its respective duties under
this Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Administrative Agent with reasonable care.
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SECTION 11.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Credit Documents (except
for actions occasioned solely by its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Credit Party
or its Subsidiaries or any officer thereof contained in this Agreement or the
other Credit Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or the other Credit Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or the other Credit Documents or for any failure of any Credit
Party or any Subsidiary thereof to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of any Credit Party or any of its Subsidiaries.
SECTION 11.4 RELIANCE BY THE ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Credit Parties), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless
such Note shall have been transferred in accordance with Section 14.10 hereof.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement and the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders (or, when
expressly required hereby or by the relevant other Credit Document, all the
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in accordance with a request of the
Required Lenders (or, when expressly required hereby, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
SECTION 11.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless it has
received notice from a Lender or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, it shall promptly give notice thereof to the Lenders. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
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shall be reasonably directed by the Required Lenders; provided that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders, except
to the extent that other provisions of this Agreement expressly require that any
such action be taken or not be taken only with the consent and authorization or
the request of the Lenders or Required Lenders, as applicable.
SECTION 11.6 NON-RELIANCE ON THE ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of any Credit Party or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties and their Subsidiaries and
made its own decision to make its Loans and issue or participate in any Letter
of Credit hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Credit Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties and their Subsidiaries.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder or by the other
Credit Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Credit Parties or any of their Subsidiaries which may
come into the possession of the Administrative Agent or any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates.
SECTION 11.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity as
such and (to the extent not reimbursed by the Credit Parties and without
limiting the obligation of the Credit Parties to do so), ratably according to
the respective amounts of their Extensions of Credit, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
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Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement or the other Credit Documents, or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's bad faith, gross negligence or willful
misconduct. The agreements in this Section 11.7 shall survive the payment of the
Notes, any Reimbursement Obligation and all other amounts payable hereunder and
the termination of this Agreement.
SECTION 11.8 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its respective Subsidiaries and Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Credit Parties and their Subsidiaries as though the Administrative
Agent were not an Administrative Agent hereunder. With respect to any Loans made
or renewed by it and any Note issued to it and with respect to any Letter of
Credit issued by it or participated in by it, the Administrative Agent shall
have the same rights and powers under this Agreement and the other Credit
Documents as any Lender and may exercise the same as though it were not an
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
SECTION 11.9 RESIGNATION OF THE ADMINISTRATIVE AGENT, SUCCESSOR
ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor as provided below,
the Administrative Agent may resign at any time by giving thirty (30) days prior
notice thereof to the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent with the consent of the Borrowers (such consent not to be unreasonably
withheld and not required if a Default or Event of Default then exists), which
successor shall have minimum capital and surplus of at least $500,000,000. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the Administrative Agent's giving of notice of resignation, then the
Administrative Agent may, on behalf of the Lenders and with the consent of the
Borrowers (such consent not to be unreasonably withheld and not required if a
Default or Event of Default then exists), appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 11.9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.
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SECTION 11.10 NATURE OF DUTIES.
Each of the Syndication Agent, the Documentation Agent and the Lead
Arranger shall have no obligations, responsibilities or duties under this
Agreement or under any other Credit Document in its capacity as such.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 NOTICES.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or
by telephone subsequently confirmed in writing. Any notice shall be
effective if delivered by hand delivery or sent via telecopy, recognized
overnight courier service or certified mail, return receipt requested, and
shall be presumed to be received by a party hereto (i) on the date of
delivery if delivered by hand or sent by telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) upon
receipt if sent by certified mail, return receipt requested. A telephonic
notice to the Administrative Agent as understood by the Administrative
Agent will be deemed to be the controlling and proper notice in the event
of a discrepancy with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Company Horizon Personal Communications, Inc.
or Borrowers: 68 East Main Street
Chillicothe, Ohio 45601-0480
Attention: Pete Holland
Telephone No.: (740) 772-8547
Telecopy No.: (740) 774-3400
copy to: Arnall Golden & Gregory, LLP
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3450
Attention: Donald Hackney, Esq.
Telephone No.: (404) 873-8500
Telecopy No.: (404) 873-8501
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If to First Union as First Union National Bank
Administrative Agent: 301 South College Street, 5th Floor
Charlotte, North Carolina 28288
Attention: Syndication Agency Services
Telephone No.: (704) 383-4131
Telecopy No.: (704) 383-0835
If to any Lender: To the Address set forth on Schedule 12.1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any
subsequent office which shall have been specified for such purpose by
written notice to the Borrowers and Lenders, as the Administrative Agent's
Office referred to herein, to which payments due are to be made and at
which Loans will be disbursed and Letters of Credit issued.
SECTION 12.2 EXPENSES; INDEMNITY.
The Borrowers on a joint and several basis will (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent and the Lead Arranger in
connection with (i) the preparation, execution and delivery of this Agreement
and each other Credit Document, whenever the same shall be executed and
delivered, including without limitation all out-of-pocket syndication and due
diligence expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and the Lead Arranger actually incurred and (ii) the
preparation, execution and delivery of any waiver, amendment or consent relating
to this Agreement or any other Credit Document, including without limitation
reasonable fees and disbursements of counsel for the Administrative Agent and
the Lead Arranger actually incurred, (b) pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the administration of
the Credit Facilities, (c) pay all reasonable out-of-pocket expenses of the
Administrative Agent and each Lender actually incurred in connection with the
enforcement of any rights and remedies of the Administrative Agent and Lenders
under the Credit Facilities, including consulting with appraisers, accountants,
engineers, attorneys and other Persons concerning the nature, scope or value of
any right or remedy of the Administrative Agent or any Lender hereunder or under
any other Credit Document or any factual matters in connection therewith, which
expenses shall include without limitation the reasonable fees and disbursements
of such Persons actually incurred, and (d) defend, indemnify and hold harmless
the Administrative Agent, the Documentation Agent, the Syndication Agent, the
Lead Arranger and the Lenders, and their respective parents, Subsidiaries,
Affiliates, employees, agents, officers and directors, from and against any
losses, penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Administrative Agent, the
Lead Arranger or any Lender is a party thereto) and the prosecution and defense
thereof, arising out of or in any way connected with the Agreement, any other
Credit Document or the Loans, including without limitation reasonable attorney's
and consultant's fees actually incurred, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.
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SECTION 12.3 SET-OFF.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 12.10 are hereby
authorized by the Borrowers at any time or from time to time, without notice to
the Borrowers or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit whether matured or unmatured) and any other
indebtedness at any time held or owing by the Lenders, or any such assignee or
participant to or for the credit or the account of the Borrowers against and on
account of the Credit Party Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other
Credit Documents or (b) the Administrative Agent shall have declared any or all
of the Credit Party Obligations to be due and payable as permitted by Section
10.2 and although such Credit Party Obligations shall be contingent or
unmatured.
SECTION 12.4 GOVERNING LAW.
This Agreement, the Notes and the other Credit Documents, unless otherwise
expressly set forth therein, shall be governed by, construed and enforced in
accordance with the laws of the State of North Carolina, without reference to
the conflicts or choice of law principles thereof.
SECTION 12.5 CONSENT TO JURISDICTION.
Each Credit Party hereby irrevocably consents to the personal jurisdiction
of the state and federal courts located in Mecklenburg County, North Carolina,
in any action, claim or other proceeding arising out of any dispute in
connection with this Agreement, the Notes and the other Credit Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations. Each Credit Party hereby irrevocably consents to the service of
a summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Agreement, the Notes or the other Credit Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 12.1.
Nothing in this Section 12.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by applicable
law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against any Credit Party or its properties in the courts of
any other jurisdictions.
SECTION 12.6 BINDING ARBITRATION; WAIVER OF JURY TRIAL.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any
other Credit Documents ("Disputes"), between or among parties to the Notes
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or any other Credit Document shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not
waive the right of that party to demand arbitration hereunder. Disputes may
include, without limitation, tort claims, counterclaims, claims brought as
class actions, claims arising from Credit Documents executed in the future,
or claims concerning any aspect of the past, present or future
relationships arising out of or connected with the Credit Documents.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable
statutes of limitation shall apply to any Dispute. A judgment upon the
award may be entered in any court having jurisdiction. Notwithstanding
anything foregoing to the contrary, any arbitration proceeding demanded
hereunder shall begin within ninety (90) days after such demand thereof and
shall be concluded within one hundred twenty (120) days after such demand.
These time limitations may not be extended unless a party hereto shows
cause for extension and then such extension shall not exceed a total of
sixty (60) days. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of
general jurisdiction, state or federal, of the state where the hearing will
be conducted. The parties hereto do not waive any applicable Federal or
state substantive law except as provided herein. Notwithstanding the
foregoing, this paragraph shall not apply to any Hedging Agreement that is
a Credit Document.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER, AND EACH CREDIT
PARTY HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Credit
Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone, in conjunction with or during
a Dispute. Each such Person shall have and hereby reserves the right to
proceed in any court of proper jurisdiction or by self help to exercise or
prosecute the following remedies: (i) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted in the Credit Documents or under applicable law or by judicial
foreclosure and sale, (ii) all rights of self help including peaceful
occupation of property and collection of rents, set off, and peaceful
possession of property, (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding,
and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
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SECTION 12.7 REVERSAL OF PAYMENTS.
To the extent any Credit Party makes a payment or payments to the
Administrative Agent for the ratable benefit of the Lenders or the
Administrative Agent receives any payment or proceeds of the collateral which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Credit Party Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Administrative Agent.
SECTION 12.8 INJUNCTIVE RELIEF; PUNITIVE DAMAGES.
(a) Each Credit Party recognizes that, in the event any such Person
fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be
inadequate relief to the Lenders. Therefore, each Credit Party agrees that
the Lenders, at the Lenders' option, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of
proving actual damages.
(b) The Administrative Agent, Lenders and each Credit Party (on behalf
of itself and its Subsidiaries) hereby agree that no such Person shall have
a remedy of punitive or exemplary damages against any other party to a
Credit Document and each such Person hereby waives any right or claim to
punitive or exemplary damages that they may now have or may arise in the
future in connection with any Dispute, whether such Dispute is resolved
through arbitration or judicially.
(c) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute and hereby waive
any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any Dispute whether the Dispute
is resolved by arbitration or judicially.
SECTION 12.9 ACCOUNTING MATTERS.
All financial and accounting calculations, measurements and computations
made for any purpose relating to this Agreement, including, without limitation,
all computations utilized by each Credit Party or any Subsidiary thereof to
determine compliance with any covenant contained herein, shall, except as
otherwise expressly contemplated hereby or unless there is an express written
direction by the Administrative Agent to the contrary agreed to by the Company,
be performed in accordance with GAAP as in effect on the Closing Date. In the
event that changes in GAAP shall be mandated by the Financial Accounting
Standards Board, or any similar accounting body of comparable standing, or shall
be recommended by the Company's certified public accountants, to the extent that
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such changes would modify such accounting terms or the interpretation or
computation thereof, such changes shall be followed in defining such accounting
terms only from and after the date the Company and other Credit Parties and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
SECTION 12.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Credit Parties, the Administrative Agent and
the Lenders, all future holders of the Notes, and their respective
successors and assigns, except that the Credit Parties shall not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Company (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents
shall not be unreasonably withheld, assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under
this Agreement (including, without limitation, all or a portion of the
Extensions of Credit at the time owing to it and the Notes held by it);
provided that:
(i) no consent of the Administrative Agent or the Company shall
be required of any such assignment to an Affiliate of the assigning
Lender, so long as the assignment otherwise complies with the terms
hereof;
(ii) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and
obligations under this Agreement;
(iii) if less than all of the assigning Lender's Commitment is to
be assigned, the Commitment so assigned shall not be less than
$5,000,000;
(iv) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance in the form of Schedule
12.10 attached hereto (an "Assignment and Acceptance"), together with
any Note or Notes subject to such assignment;
(v) such assignment shall not, without the consent of the
Company, require the Borrowers to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state; and
(vi) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,500 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable
upon any assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
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date shall be at least five (5) Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations
of a Lender hereby and (B) the Lender thereunder shall, to the extent
provided in such assignment, be released from its obligations under this
Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the amount of the
Extensions of Credit with respect to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the Company or the Lenders at any reasonable
time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee
together with any Note or Notes subject to such assignment and the written
consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the
form of Schedule 12.10:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Company;
and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Company.
Within five (5) Business Days after receipt of notice, the Borrowers
shall execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of such
Eligible Assignee in amounts equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and a new Note or Notes to
the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes delivered to the assigning Lender. Each
surrendered Note or Notes shall be canceled and returned to the
Company.
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(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of
its Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less than
$5,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it
for all purposes of this Agreement;
(v) the Credit Parties, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this
Agreement or any other Credit Document other than waivers, amendments
or modifications which would reduce the principal of or the interest
rate on any Loan or Reimbursement Obligation, extend the term or
increase the amount of the Commitment, reduce the amount of any fees
to which such participant is entitled, extend any scheduled payment
date for principal of any Loan or, except as expressly contemplated
hereby or thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the
Company, require the Borrowers to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans
or the Notes under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to
the Credit Parties obtained pursuant to the Credit Documents in accordance
with their customary procedures for handling confidential information;
provided, that the Administrative Agent may disclose information relating
to this Agreement to Gold Sheets and other similar bank trade publications,
such information to consist of deal terms and other information customarily
found in such publications and provided further, that the Administrative
Agent and Lenders may disclose any such information to the extent such
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disclosure is required by law or requested by any regulatory authority. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section 12.10,
disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to the Credit Parties furnished to
such Lender by or on behalf of the Borrowers; provided, that prior to any
such disclosure, each such assignee, proposed assignee, participant or
proposed participant shall agree with the Company or such Lender to
preserve the confidentiality of any confidential information relating to
the Credit Parties received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with applicable law.
SECTION 12.11 AMENDMENTS, WAIVERS AND CONSENTS.
Except as set forth below, any term, covenant, agreement or condition of
this Agreement or any of the other Credit Documents (other than any Hedging
Agreement, the terms and conditions of which may be amended, modified or waived
by the parties thereto) may be amended or waived by the Lenders, and any consent
given by the Lenders, if, but only if, such amendment, waiver or consent is in
writing signed by the Required Lenders (or by the Administrative Agent with the
consent of the Required Lenders) and delivered to the Administrative Agent and,
in the case of an amendment, signed by the Credit Parties; provided, that no
amendment, waiver or consent shall (a) increase the amount or extend the time of
the obligation of the Lenders to make Loans or issue or participate in Letters
of Credit, (b) extend the originally scheduled time or times of payment of (i)
the principal of any Loan or Reimbursement Obligation, (ii) the interest on any
Loan or Reimbursement Obligation or (iii) any fees, (c) reduce the rate of
interest or fees payable on any Loan or Reimbursement Obligation, (d) reduce the
principal amount of any Loan or Reimbursement Obligation, (e) permit any
subordination of the principal or interest on any Loan or Reimbursement
Obligation, (f) permit any assignment (other than as specifically permitted or
contemplated in this Agreement) of any of the Borrowers' rights and obligations
hereunder, (g) release all or any substantial portion of the Collateral or
release any Security Document (other than as specifically permitted or
contemplated in this Agreement or the applicable Security Document), (h) release
all or any substantial portion of the Guarantors from their guaranty Credit
Party Obligations hereunder or (i) amend the provisions of this Section 12.11,
Section 7.14 or the definition of Required Lenders, without the prior written
consent of each Lender. In addition, no amendment, waiver or consent to the
provisions of (a) Article XI shall be made without the written consent of the
Administrative Agent and (b) Section2.3 without the written consent of the
Issuing Lender. Notwithstanding the foregoing terms of this Section 12.11, the
Administrative Agent is authorized to release any Guarantor that is sold to or
merged into another Person in accordance with the terms of this Agreement.
SECTION 12.12 PERFORMANCE OF DUTIES.
The Credit Parties' obligations under this Agreement and each of the
Credit Documents shall be performed thereby at their sole cost and expense.
SECTION 12.13 ALL POWERS COUPLED WITH INTEREST.
All powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
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any Lender pursuant to any provisions of this Agreement or any of the other
Credit Documents shall be deemed coupled with an interest and shall be
irrevocable so long as any of the Credit Party Obligations remain unpaid or
unsatisfied or the Credit Facilities have not been terminated.
SECTION 12.14 SURVIVAL OF INDEMNITIES.
Notwithstanding any termination of this Agreement, the indemnities to which
the Administrative Agent and the Lenders are entitled under the provisions of
this Article XII and any other provision of this Agreement and the Credit
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.
SECTION 12.15 TITLES AND CAPTIONS.
Titles and captions of Articles, Sections and subsections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 12.16 SEVERABILITY OF PROVISIONS.
Any provision of this Agreement or any other Credit Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 12.17 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.
SECTION 12.18 TERM OF AGREEMENT.
This Agreement (including the Guaranty) shall remain in effect from the
Closing Date through and including the date upon which all Credit Party
Obligations shall have been indefeasibly and irrevocably paid and satisfied in
full. Upon repayment of the outstanding principal of and all accrued interest on
the Loans, payment of all outstanding fees and expenses hereunder and the
termination of the Lender's Revolving Loan Commitments and Term Loan
Commitments, (a) the Administrative Agent is permitted to release all Liens on
the Collateral in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders and (B) the obligations of the Guarantors under the
Guaranty shall automatically be deemed terminated and the Guarantors released
from such obligations without any further action by any party hereto. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.
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SECTION 12.19 INCONSISTENCIES WITH OTHER DOCUMENTS; INDEPENDENT EFFECT OF
COVENANTS.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Credit Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which
imposes additional burdens on the Credit Parties or their Subsidiaries or
further restricts the rights of the Credit Parties or their Subsidiaries or
gives the Administrative Agent or Lenders additional rights shall not be
deemed to be in conflict or inconsistent with this Agreement and shall be
given full force and effect.
(b) The Credit Parties expressly acknowledge and agree that each
covenant contained in Articles VI, VII, VIII or IX hereof shall be given
independent effect. Accordingly, no Credit Party shall engage in any
transaction or other act otherwise permitted under any covenant contained
in Articles VI, VII, VIII or IX if, before or after giving effect to such
transaction or act, such Credit Party shall or would be in breach of any
other covenant contained in Articles VI, VII, VIII or IX.
ARTICLE XIII
GUARANTY
Each of the Guarantors hereby agrees as follows:
SECTION 13.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to extend
credit hereunder and in recognition of the direct benefits to be received by the
Guarantors from the Extensions of Credit hereunder, each of the Guarantors
hereby agrees with the Administrative Agent and the Lenders as follows: each
Guarantor hereby unconditionally and irrevocably jointly and severally
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all indebtedness of the Borrowers to the Administrative Agent and the
Lenders. If any or all of the indebtedness of the Borrowers to the
Administrative Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent and the Lenders, on order, on demand, together with any and
all reasonable expenses which may be incurred by the Administrative Agent or the
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Lenders in collecting any of such indebtedness. The word "indebtedness" is used
in this Article XIII in its most comprehensive sense and means any and all
advances, debts, obligations and liabilities of the Borrowers arising under any
Credit Document, including, without limitation, Hedging Agreements permitted
hereunder, in each case, heretofore, now, or hereafter made, incurred or
created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether either Borrower may be liable individually or
jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
SECTION 13.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrowers to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 10.1(j) and (k), and
unconditionally promises to pay such indebtedness to the Administrative Agent
for the account of the Lenders, or order, on demand, in lawful money of the
United States. Each of the Guarantors further agrees that to the extent that a
Borrower or a Guarantor shall make a payment or a transfer of an interest in any
property to the Administrative Agent or any Lender, which payment or transfer or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, or otherwise is avoided, and/or required to be repaid to a
Borrower or a Guarantor, the estate of a Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.
SECTION 13.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the indebtedness of the Borrowers whether
executed by any such Guarantor, any other guarantor or by any other party, and
no Guarantor's liability hereunder shall be affected or impaired by (a) any
direction as to application of payment by a Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of the Borrowers, or
(c) any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel by
a Borrower, or (e) any payment made to the Administrative Agent or the Lenders
on the indebtedness which the Administrative Agent or such Lenders repay a
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of the Guarantors waives
any right to the deferral or modification of its obligations hereunder by reason
of any such proceeding. The obligations of the Guarantors hereunder are absolute
and unconditional, irrespective of the value, genuineness, validity, regularity
or enforceability of any of the Credit Documents, any Hedging Agreement entered
into in connection with this Agreement, or any other agreement or instrument
referred to therein, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or a guarantor.
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SECTION 13.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or either Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or either Borrower and whether or
not any other Guarantor or either Borrower is joined in any such action or
actions.
SECTION 13.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each Lender
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to (a) renew, compromise, extend, increase, accelerate or
otherwise change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof in accordance with this Agreement, including
any increase or decrease of the rate of interest thereon, (b) take and hold
security from any Guarantor or any other party for the payment of this Guaranty
or the indebtedness and exchange, enforce, waive and release any such security,
(c) apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine and (d)
release or substitute any one or more endorsers, Guarantors, Borrowers or other
obligors.
SECTION 13.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to inquire
into the capacity or powers of the Borrowers or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
SECTION 13.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against a Borrower, any
other Guarantor or any other party, (ii) proceed against or exhaust any
security held from a Borrower, any other Guarantor or any other party, or
(iii) pursue any other remedy in the Administrative Agent's or any Lender's
power whatsoever. Each of the Guarantors waives any defense based on or
arising out of any defense of the Borrowers, any other Guarantor or any
other party other than payment in full of the indebtedness, including
without limitation any defense based on or arising out of the disability of
a Borrower, any other Guarantor or any other party, or the unenforceability
of the indebtedness or any part thereof from any cause, or the cessation
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from any cause of the liability of the Borrowers other than payment in full
of the indebtedness. Without limiting the generality of the provisions of
this Article XIII, each of the Guarantors hereby specifically waives the
benefits of N.C. Gen. Stat. ss. 26-7 through 26-9, inclusive. The
Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender by
one or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and any Lender may have against the Borrowers or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the indebtedness
has been paid. Each of the Guarantors waives any defense arising out of any
such election by the Administrative Agent and each of the Lenders, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors
against the Borrowers or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of each of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the indebtedness and the nature,
scope and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that neither the Administrative Agent nor any Lender
shall have any duty to advise such Guarantor of information known to it
regarding such circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result
of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders against the
Borrowers or any other guarantor of the indebtedness of the Borrowers owing
to the Lenders (collectively, the "Other Parties") and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result of
this Guaranty until such time as the Loans hereunder shall have been paid
and the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy which
the Administrative Agent and the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or any
part of the indebtedness of the Borrowers and any benefit of, and any right
to participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrowers until
such time as the Loans hereunder shall have been paid and the Commitments
have been terminated.
SECTION 13.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action of
the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
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SECTION 13.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after payment
of the indebtedness and obligations which are the subject of this Guaranty and
termination of the commitments relating thereto, confirm to the Borrowers, the
Guarantors or any other Person that such indebtedness and obligations have been
paid and the commitments relating thereto terminated, subject to the provisions
of Section 13.2.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
HORIZON PERSONAL COMMUNICATIONS, INC.
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
GUARANTORS: HORIZON PCS, INC.
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
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LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK
BRANCH, as Syndication Agent
and Arranger and as a Lender
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
FORTIS CAPITAL CORP.,
as Documentation Agent and Lender
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
COBANK, ACB
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
114
MOTOROLA CREDIT CORPORATION
By:_____________________________________________
Name:_____________________________________
Title:____________________________________
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