1
EXHIBIT 4.1
EXECUTION COPY
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LOAN AND SECURITY AGREEMENT
Dated as of April 29, 1999
among
US XCHANGE FINANCE COMPANY, L.L.C.,
as Borrower,
US XCHANGE, L.L.C. and
CERTAIN OPERATING SUBSIDIARIES OF US XCHANGE, L.L.C.,
as Guarantors,
THE LENDERS PARTY HERETO
And
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
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TABLE OF CONTENTS
Page
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Article 1: DEFINITIONS....................................................................................1
1.1 Certain Definitions............................................................................1
1.2 Accounting Principles; Subsidiaries...........................................................16
1.3 UCC Terms.....................................................................................16
1.4 General Construction; Captions................................................................16
1.5 References to Documents and Laws..............................................................17
Article 2: LOANS.........................................................................................17
2.1 Revolving Credit Commitments..................................................................17
2.2 Notes.........................................................................................17
2.3 Reliance on Notices...........................................................................17
2.4 Procedures for Borrowing......................................................................17
2.5 Loan Amortization.............................................................................18
2.6 Maturity......................................................................................18
2.7 Prepayments; Commitment Reductions............................................................18
2.8 Interest and Applicable Margin................................................................19
2.9 Payments......................................................................................20
2.10 Application and Allocation of Payments........................................................20
2.11 Loan Account and Accounting...................................................................21
2.12 Taxes.........................................................................................21
2.13 Capital Adequacy; Increased Costs; Illegality.................................................22
2.14 Use of Proceeds...............................................................................23
2.15 Fees..........................................................................................23
Article 3: COLLATERAL AND SECURITY AGREEMENT.............................................................24
3.1 Grant of Security Interest....................................................................24
3.2 Regulatory Authorizations.....................................................................25
3.3 Grant of Security Interest by Holdings........................................................25
3.4 Priority of Security Interests................................................................25
3.5 Operating Agreements..........................................................................25
3.6 Further Documentation; Pledge of Instruments..................................................26
3.7 Accounts, Etc.................................................................................26
3.8 Further Identification of Collateral..........................................................26
3.9 Remedies......................................................................................26
3.10 Standard of Care..............................................................................26
3.11 Advances to Protect Collateral................................................................27
3.12 License to Use................................................................................27
3.13 Benefit of the Liens..........................................................................27
3.14 Release of Collateral.........................................................................27
Article 4: REPRESENTATIONS AND WARRANTIES................................................................27
4.1 Organization and Qualification................................................................27
4.2 Authority and Authorization...................................................................27
4.3 Execution and Binding Effect..................................................................27
4.4 Governmental Authorizations...................................................................28
4.5 Regulatory Authorizations.....................................................................28
4.6 Agreements and Other Documents................................................................28
4.7 Absence of Conflicts..........................................................................28
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4.8 No Restrictions...............................................................................29
4.9 Government Contracts..........................................................................29
4.10 Financial Statements; Business Plan...........................................................29
4.11 Financial Accounting Practices................................................................29
4.12 Deposit and Disbursement Accounts.............................................................29
4.13 Insurance.....................................................................................30
4.14 Accurate and Complete Disclosure..............................................................30
4.15 No Event of Default; Compliance with Material Agreements......................................30
4.16 Labor Matters.................................................................................30
4.17 Litigation....................................................................................30
4.18 Rights to Property............................................................................30
4.19 Year 2000 Issue...............................................................................31
4.20 Taxes.........................................................................................31
4.21 No Material Adverse Change....................................................................31
4.22 Solvency......................................................................................31
4.23 No Regulatory Event...........................................................................31
4.24 Trade Relations...............................................................................31
4.25 No Brokerage Fees.............................................................................31
4.26 Margin Stock; Regulation U....................................................................31
4.27 Investment Company; Public Utility Holding Company............................................32
4.28 Personal Holding Company; Subchapter S........................................................32
4.29 Securities Act, Etc...........................................................................32
4.30 ERISA.........................................................................................32
4.31 Intellectual Property.........................................................................32
4.32 Environmental Warranties......................................................................32
4.33 Security Interests............................................................................32
4.34 Place of Business.............................................................................33
4.35 Location of Collateral........................................................................33
4.36 Material Contracts and Accounts...............................................................33
4.37 No Defaults Under Contracts or Accounts.......................................................33
4.38 Corporate Structure...........................................................................33
4.39 Security......................................................................................33
4.40 Assumed Names.................................................................................33
4.41 Transactions with Affiliates..................................................................33
4.42 Lucent Agreement..............................................................................34
4.43 Equipment Orders..............................................................................34
Article 5: CONDITIONS TO FIRST BORROWING DATE............................................................34
5.1 Closing Certificates..........................................................................34
5.2 Opinions of Counsel...........................................................................34
5.3 Closing Documents.............................................................................35
5.4 No Material Adverse Change....................................................................35
Article 6: CONDITIONS OF LENDING.........................................................................36
6.1 Conditions to Each Borrowing Date.............................................................36
6.2 Post-Closing Items............................................................................36
6.3 Affirmation of Representations and Warranties.................................................37
6.4 Deadline for Funding Conditions...............................................................37
Article 7: AFFIRMATIVE COVENANTS.........................................................................37
7.1 Reporting and Information Requirements........................................................37
7.2 Other Notices.................................................................................38
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7.3 Notice of Pension-Related Events..............................................................39
7.4 Financial Accounting Practices................................................................39
7.5 Preservation of Corporate Existence and Qualification.........................................39
7.6 Continuation of Business......................................................................39
7.7 Insurance.....................................................................................40
7.8 Indemnity.....................................................................................41
7.9 Access........................................................................................42
7.10 Expenses......................................................................................43
7.11 Payment of Taxes, Charges, Claims and Current Liabilities.....................................43
7.12 Compliance with Laws..........................................................................44
7.13 Use of Proceeds...............................................................................44
7.14 Government Authorizations; Regulatory Authorizations, Etc.....................................44
7.15 Contracts and Franchises......................................................................45
7.16 Site Leases and Consents......................................................................45
7.17 Financial Covenants...........................................................................45
7.18 Patent, Trademark and Copyright Collateral....................................................45
7.19 Sites.........................................................................................45
7.20 Environmental Site Assessments................................................................45
7.21 Construction..................................................................................46
7.22 No Encroachments..............................................................................46
7.23 Certain Notices...............................................................................46
7.24 Management Team...............................................................................46
7.25 Enforcement of Contracts......................................................................46
7.26 Future Subsidiaries...........................................................................46
7.27 Liens on After-Acquired Property..............................................................46
7.28 Year 2000 Compliance..........................................................................47
7.29 Post-Closing Items............................................................................47
7.30 Further Assurances............................................................................47
Article 8: NEGATIVE COVENANTS............................................................................47
8.1 Indebtedness..................................................................................47
8.2 Restrictions on Liens.........................................................................47
8.3 Limitation on Contingent Obligations..........................................................48
8.4 Prohibition of Mergers, Acquisitions, Sales of Assets, Name, Office or Business Changes,
Etc...........................................................................................48
8.5 Limitation on Equity Payments.................................................................49
8.6 Assumed Names.................................................................................49
8.7 Limitation on Leases..........................................................................49
8.8 Transactions with Affiliates..................................................................49
8.9 Extension of Accounts.........................................................................50
8.10 Unscheduled Payments..........................................................................50
8.11 Business Activities...........................................................................50
8.12 Capital Expenditures..........................................................................50
8.13 Holdings' Assets..............................................................................50
8.14 Limitation on Investments, Advances and Loans.................................................50
8.15 Subsidiaries..................................................................................51
Article 9: EVENTS OF DEFAULT AND REMEDIES................................................................51
9.1 Events of Default.............................................................................51
9.2 Remedies......................................................................................53
9.3 Waivers by Loan Parties.......................................................................53
9.4 Exercise of Rights............................................................................54
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9.5 Rights of Secured Party.......................................................................54
9.6 Additional Remedies...........................................................................54
9.7 Application of Proceeds.......................................................................56
9.8 Discontinuance of Proceedings.................................................................56
9.9 Power of Attorney and Proxy...................................................................56
9.10 Regulatory Matters............................................................................57
Article 10: ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT...........................58
10.1 Assignment and Participations.................................................................58
10.2 Appointment of the Administrative Agent.......................................................59
10.3 The Administrative Agent's Reliance, Etc......................................................60
10.4 GECC and Affiliates...........................................................................60
10.5 Lender Credit Decision........................................................................61
10.6 Indemnification...............................................................................61
10.7 Successor Administrative Agent................................................................61
10.8 Set Off and Sharing of Payments...............................................................62
10.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert......................62
Article 11: GUARANTY......................................................................................64
11.1 Guaranty......................................................................................64
11.2 Waivers by Guarantors.........................................................................65
11.3 Benefit of Guaranty...........................................................................65
11.4 Subordination of Subrogation, Etc.............................................................65
11.5 Election of Remedies..........................................................................65
11.6 Limitation....................................................................................66
11.7 Contribution with Respect to Guaranty Obligations.............................................66
11.8 Liability Cumulative..........................................................................67
Article 12: GENERAL CONDITIONS/MISCELLANEOUS..............................................................67
12.1 Amendments, Modifications and Waivers.........................................................67
12.2 Advances Not Implied Waivers..................................................................67
12.3 Business Day..................................................................................67
12.4 Records.......................................................................................67
12.5 Notices.......................................................................................68
12.6 FCC and PUC Approval..........................................................................68
12.7 Lenders Sole Beneficiary......................................................................68
12.8 Lender's Review of Information................................................................69
12.9 No Joint Venture..............................................................................69
12.10 Severability..................................................................................69
12.11 Rights Cumulative.............................................................................69
12.12 Duration; Survival............................................................................69
12.13 Governing Law.................................................................................69
12.14 Counterparts..................................................................................69
12.15 Successors and Assigns........................................................................69
12.16 Disclosures and Confidentiality...............................................................70
12.17 Jurisdiction and Venue........................................................................71
12.18 Jury Waiver...................................................................................72
12.19 Limitation on Liability.......................................................................72
12.20 Schedules, Exhibits and Annexes...............................................................72
12.21 Agreement to Govern...........................................................................72
12.22 Entire Agreement..............................................................................72
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ANNEXES TO LOAN AND SECURITY AGREEMENT
Annex I Initial Commitments; Addresses of the Lenders
Annex II Closing Checklist
SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule 1 Loan Party Information and Certain Defined Terms
Schedule 2.5 Loan Amortization
Schedule 2.15 Commitment Fees
Schedule 4.4 Required Consents
Schedule 4.5 Regulatory Authorizations
Schedule 4.6 Agreements and Other Documents
Schedule 4.8 Restrictions on Indebtedness
Schedule 4.9 Government Contracts
Schedule 4.10 Financial Statements
Schedule 4.12 Deposit and Disbursement Accounts
Schedule 4.13 Existing Insurance
Schedule 4.16 Labor Matters
Schedule 4.17 Litigation
Schedule 4.18 Site and Site Leases; Real Property; Equipment Location
Schedule 4.31 Intellectual Property
Schedule 4.32 Environmental Assessments
Schedule 4.33 Security Interests--Recordings and Filings
Schedule 4.34 Place of Business
Schedule 4.35 Location of Collateral
Schedule 4.40 Assumed Names
Schedule 4.41 Transactions with Affiliates
Schedule 5.1 Closing Certificates
Schedule 6.2 Post-Closing Items
Schedule 7.7 Required Insurance
Schedule 7.17 Financial Covenants
Schedule 8.1 Permitted Indebtedness
Schedule 8.2 Liens
Schedule 8.3 Contingent Obligations
Schedule 8.14 Investments
Schedule 10.9 Wire Instructions
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A Form of Note
Exhibit B Form of Borrowing Certificate
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Opinion of Counsel to Loan Parties
Exhibit E Form of Opinion of Regulatory Counsel to Loan Parties
Exhibit F Form of Landlord Consent
Exhibit G Form of Assignment Agreement
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of April 29,
1999, by and among US XCHANGE FINANCE COMPANY, L.L.C., a Delaware limited
liability company (the "Borrower"); US XCHANGE, L.L.C., a Michigan limited
liability company ("Holdings"); each Subsidiary (as hereinafter defined) of the
Borrower listed on the signature pages hereof as a "Subsidiary Guarantor"; each
financial institution listed on the signature pages hereof as a "Lender" and the
other financial institutions and other entities who may hereafter from time to
time become parties hereto as successors or assigns as provided herein (each, a
"Lender" and, collectively, the "Lenders"); and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GECC"), as administrative agent for the
Lenders (in that capacity, the "Administrative Agent").
B A C K G R O U N D:
1. Holdings, through its subsidiaries, including the Borrower, is
engaged in the provision of telecommunication services primarily in Tier III
Markets in the midwestern United States.
2. Holdings and the Borrower have requested that the Lenders provide
funds to the Borrower to finance (i) the acquisition, design, development,
construction, installation, improvement, transportation and integration of
Telecommunications Assets by the Borrower or any of its Subsidiaries which have
been heretofore acquired or which are hereafter acquired, (ii) all network or
network related Capital Expenditures by the Borrower or any of its Subsidiaries,
other than Capital Lease Obligations, in the Markets, and (iii) Permitted
Acquisitions (not to exceed $10 million).
3. The Lenders are willing to extend such credit to the Borrower upon
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1:
DEFINITIONS
1.1 Certain Definitions. Certain terms are defined on Schedule 1. In
addition to other words and terms defined in the preamble hereof or elsewhere in
this Agreement, or on the Schedules, the following words and terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural form of such words and terms) unless the context otherwise
clearly requires:
"Accounts": as defined in Subsection 3.1(a).
"Advance": any advance made pursuant to Section 2.1.
"Affected Lender": as defined in Subsection 2.13(d).
"Affiliate": with respect to any Person, (a) each Person that, directly
or indirectly, owns or controls, whether beneficially, or as a trustee, guardian
or other fiduciary, five percent (5%) or more of the Stock having ordinary
voting power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person and (c)
in the case of individuals, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of the Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
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indirectly, of the power to direct or cause the direction of its management
or policies, whether through the ownership of voting securities, by contract, by
virtue of being an executive officer or a director or otherwise; provided,
however, that the term "Affiliate" shall specifically exclude, in the case of
any Loan Party, the Administrative Agent and each Lender.
"Applicable Base Margin": the per annum interest rate margin from time
to time in effect and payable in addition to the Base Rate applicable to Base
Rate Loans, as described in Subsection 2.8(a).
"Applicable LIBOR Margin": the per annum interest rate from time to
time in effect and payable in addition to the LIBOR Rate applicable to LIBOR
Loans, as described in Subsection 2.8(a).
"Applicable Margins": the Applicable Base Margin and the Applicable
LIBOR Margin.
"Asset Disposition": any sale or other disposition (including by way of
merger, consolidation or condemnation and whether by operation of the law or
otherwise), or series of sales or other dispositions made on or after the date
hereof by any Loan Party to any Person (other than a Loan Party) of (a) all or
substantially all of the outstanding Stock of any Restricted Subsidiary, (b) all
or substantially all of its assets or the assets of any division of the Borrower
or any Restricted Subsidiary or (c) any other asset or assets which, when taken
together with all sales or other dispositions of assets not covered by either
the foregoing clause (i) or (ii), yield Asset Disposition Net Proceeds in excess
of $100,000 in any twelve-month period.
"Asset Disposition Net Proceeds": the proceeds of any Asset
Disposition, net of (a) brokerage commissions and other commissions, fees and
expenses (including fees and expenses of counsel, accountants and investment
bankers) related to such Asset Disposition and (b) a reserve for taxes payable
as a result of such Asset Disposition.
"Assignment Agreement": as defined in Subsection 10.1(a).
"Available Credit": the aggregate Commitments of the Lenders less the
Regulatory Reserve, if any.
"Base Rate": for any day, a floating rate equal to the higher of (a)
the rate publicly quoted from time to time by The Wall Street Journal as the
"base rate on corporate loans at large U.S. money center commercial banks" (or,
if The Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Board of Governors of the
Federal Reserve System in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent) and (b) the Federal Funds Rate plus fifty (50) basis points per
annum. Each change in any interest rate provided for in this Agreement based
upon the Base Rate shall take effect at the time of such change in the Base
Rate.
"Base Rate Loan": any portion of the Loan bearing interest by
reference to the Base Rate.
"Board of Directors": with respect to any Person that is a limited
liability company, its members; with respect to any Person that is a
corporation, its board of directors; and with respect to any other Person, its
governing body equivalent to a board of directors of a corporation.
"Borrower": as defined in the first paragraph of this Agreement.
"Borrowing Certificate": a certificate substantially in the form of
Exhibit B.
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"Borrowing Date": any Business Day on which an Advance is made.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Business Plan": The Loan Parties' business plan, including quarterly
pro forma Projections for the period from January 1, 1999 through December 31,
2008 (except that balance sheets are through December 31, 2003), as described
in, and attached to, Schedule 4.10.
"Capital Expenditures": for any period, (a) the additions to property,
plant and equipment (including any additions through the acquisition of stock of
a Person that becomes a Restricted Subsidiary) and other capital expenditures of
the Borrower or any of the Restricted Subsidiaries (including all systems and
development expenditures related to the build-out of the Networks) that are (or
would be) set forth in a consolidated statement of cash flows of the Borrower
and the Restricted Subsidiaries for such period prepared in accordance with GAAP
and, without duplication, (b) Capital Lease Obligations incurred by the Borrower
or any Restricted Subsidiary during such period; provided, however, that no
consideration paid for by or expenditure or obligation related to an
Unrestricted Subsidiary or to the acquisition of any Regulatory Authorization
and no capitalized interest shall be treated as a Capital Expenditure nor shall
expenditures of proceeds of insurance settlements, condemnation awards and other
like settlements in respect of lost, destroyed, damaged or condemned property,
plant or equipment to the extent that such expenditures are made to repair or
replace such property or to acquire other property, plant and equipment useful
in the Telecommunications Business within twelve (12) months of receipt of such
proceeds, be deemed Capital Expenditures.
"Capital Lease": with respect to any Person, any lease of (or other
indebtedness arrangement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP, would
be required to be classified and accounted for as a capital lease or a liability
on a balance sheet of such Person.
"Capital Lease Obligation": with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease and that shall have a stated maturity which is the date of
the last payment of rent or any amount due under such Capital Lease prior to the
first date upon which such Capital Lease may be terminated by the lessee without
payment of a penalty.
"Cash": at any time, the cash, cash equivalents or marketable
investment grade securities held by any Loan Party free of any claims or
encumbrances other than those created by the Loan Documents.
"Cash Interest Coverage Ratio": EBITDA for any period of four (4)
consecutive Fiscal Quarters divided by Interest Expense (excluding any portion
thereof not paid in cash) for such period.
"Change of Control": as defined in that certain Indenture, dated as of
June 25, 1998, between Holdings and The Bank of New York, as Trustee, relating
to the Company Notes.
"Charges": all federal, state, county, city, municipal, local, foreign
or other governmental Taxes (including Taxes owed to the PBGC at the time due
and payable), levies, assessments, charges, liens, claims or encumbrances upon
or relating to (a) the Collateral, (b) the Obligations, (c) the payroll, income
or gross receipts of any Loan Party, (d) any Loan Party's ownership or use of
any properties or other assets or (e) any other aspect of any Loan Party's
business.
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"Closing Checklist": the schedule, including all appendices, exhibits
or schedules thereto, listing certain documents and information to be delivered
in connection with this Agreement, the other Loan Documents and the transactions
contemplated hereunder, substantially in the form attached hereto as Annex II.
"Closing Date": the date of this Agreement first written above.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": as defined in Section 3.1.
"Commissions": as defined in Subsection 12.16(b).
"Commitment": (a) as to any Lender, the commitment of such Lender to
make its Pro Rata Share of Advances and (b) as to all Lenders, the aggregate of
the commitments of all Lenders to make Advances, which aggregate commitments are
Fifty Million Dollars ($50,000,000) on the date hereof, in each case as such
amounts may be adjusted, if at all, from time to time in accordance with this
Agreement. The initial Commitment of each Lender is set forth on Annex I.
"Commitment Fees": as defined in Subsection 2.15(a).
"Commitment Termination Date": the earliest of (a) the second
anniversary of the Closing Date, (b) the date of termination of the Lenders'
obligation to make Advances or permit the existing Loan to remain outstanding
pursuant to Subsection 9.2(b) and (c) the date of the permanent reduction of the
Commitments to zero dollars ($0).
"Communications Law": any and all of (a) the Communications Act of
1934, as amended by the Telecommunications Act of 1996, any similar or successor
federal statute and the rules and regulations of the FCC thereunder and (b) any
state law governing the provision of telecommunications services and the rules
and regulations of any PUC, all as the same may be in effect from time to time.
"Company Notes": the $200,000,000 of 15% Senior Notes due 2008 issued
by Holdings pursuant to that certain Indenture, dated as of June 25, 1998,
between Holdings and The Bank of New York, as Trustee, and up to an additional
$100,000,000 principal amount of senior notes due 2008 or later issued by
Holdings, with terms substantially similar thereto or better, the Debt Security
Sale Net Proceeds of which additional issuance are used to fund the continued
deployment of Networks in markets in States listed in Schedule 1 and to purchase
U.S. government securities to secure and fund up to three (3) years of scheduled
payments of interest thereon.
"Contingent Obligation": as to any Person, any obligation of such
Person guaranteeing, directly or indirectly, any Indebtedness, leases, dividends
or other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so
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guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Contracts": as defined in Subsection 3.1(b).
"Current Assets": with respect to any Person, all current
assets of such Person as of any date of determination calculated in
accordance with GAAP.
"Current Liabilities": with respect to any Person, all liabilities
which should, in accordance with GAAP, be classified as current liabilities, and
in any event shall include all Indebtedness payable on demand or within one year
from any date of determination without any option on the part of the obligor to
extend or renew beyond such year, all accruals for federal or other Taxes based
on or measured by income and payable within such year, and the current portion
of long-term debt required to be paid within one year, but excluding, in the
case of the Borrower, the aggregate outstanding principal balances of the Loan.
"Debt Security Sale Net Proceeds": the cash proceeds received by
Holdings from the incurrence by Holdings of Permitted Holdings Debt (other than
proceeds received from any refinancing of any Permitted Holdings Debt), net of
attorney's fees, accountants' fees, underwriters' or placement agent's fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection therewith and net of taxes paid or payable as a result thereof.
"Default": any of the conditions or occurrences specified in Section
9.1, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition has been satisfied.
"Default Rate": as defined in Subsection 2.8(d).
"EBITDA": for any period, the sum of the consolidated net income (or
loss) of Holdings and its Subsidiaries (other than Unrestricted Subsidiaries)
(excluding extraordinary gains and losses and the amount of any revenues which
are in dispute) plus the amount of depreciation, amortization, Interest Expense
and tax expense deducted in the determination of such consolidated net income
(or loss).
"Environmental Laws": all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules and regulations and all applicable
judicial or administrative interpretations thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C. ss.ss. 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. ss.ss. 5101 et seq.); the
Resource Conservation Recovery Act (42 U.S.C. ss.ss. 6901 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss.ss. 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. ss.ss. 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. ss.ss. 2601 et seq.); the Clean Air Act (42 U.S.C. ss.ss.
7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. ss.ss. 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. ss.ss. 651 et seq.);
and the Safe Drinking Water Act (42 U.S.C. ss.ss. 300(f) et seq.); and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities": with respect to any Person, all
liabilities, response, remedial and removal costs, losses, damages, property
damages, natural resource damages, costs and expenses
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(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any environmental claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Permits
required by or pursuant to Environmental Laws, or in connection with any Release
or threatened Release or presence of a Hazardous Material.
"Equipment": as defined in Subsection 3.1(c).
"Equity Payment": any distribution of earnings or capital, or any
dividend payment, redemption or other payment in respect of Stock, either
directly or indirectly, whether in cash or property or in obligations of any
Loan Party.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate": with respect to any Loan Party, any trade or
business (whether or not incorporated) which, together with such Loan Party, are
treated as a single employer within the meaning of Sections 414(b), (c), (m) or
(o) or the Code.
"Event of Default": any of the conditions or occurrences specified in
Section 9.1; provided, however, that any requirement for the giving of
notice, the lapse of time, or both, shall have been satisfied.
"Excess Cash Flow": with respect to any Fiscal Year, the consolidated
net income (or loss) of the Borrower and its Subsidiaries for such Fiscal Year
plus (a) depreciation, amortization and Interest Expense to the extent deducted
in determining such consolidated net income or loss, plus decreases or minus
increases (as the case may be) (b) in Working Capital during such Fiscal Year,
minus (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense), to the extent deducted in determining
such net income or loss, and scheduled principal payments paid or payable during
such Fiscal Year in respect of Indebtedness permitted hereunder to be incurred,
plus or minus (as the case may be), (d) extraordinary gains or losses which are
cash items not included in the calculation of net income or loss, minus (e)
Capital Expenditures for such Fiscal Year to the extent permitted hereunder,
plus (f) Taxes deducted in determining consolidated net income to the extent not
paid or payable in cash. For purposes of this definition, "Working Capital"
means Current Assets (exclusive of Cash) less Current Liabilities.
"FCC": the Federal Communications Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.
"Federal Funds Rate": for any period, a fluctuating interest rate equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as reasonably
determined by the Administrative Agent.
"Fees": any and all fees payable to the Administrative Agent or any
Lender pursuant to this Agreement or any of the other Loan Documents.
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"Financial Statements": the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Holdings delivered
in accordance with this Agreement.
"First Borrowing Date": the first date on which an Advance is made.
"Fiscal Quarter": any of the quarterly accounting periods of the
Loan Parties ending on March 31, June 30, September 30 and December 31 of
each year.
"Fiscal Year": any of the annual accounting periods of the Loan
Parties ending on December 31 of each year.
"Fixed Charges": for any period, the sum of (a) Total Debt Service, (b)
Capital Expenditures and (c) Taxes imposed or measured by consolidated net
income, in the case of each of (a), (b) and (c), for Holdings and its
Subsidiaries (exclusive of Unrestricted Subsidiaries) for such period.
"Fixed Charges Coverage Ratio": EBITDA for any period of four (4)
consecutive Fiscal Quarters divided by Fixed Charges for such period.
"GAAP": subject to Section 1.2, generally accepted accounting
principles in the United States of America (as such principles may change from
time to time) applied on a consistent basis (except for changes in application
in which the Loan Parties' independent certified public accountants concur),
applied both to classification of items and amounts.
"GECC Commitment Letter": the commitment letter between GECC and
Holdings dated March 17, 1999.
"GECC Fee Letter": as defined in Subsection 2.15(b).
"General Intangibles": as defined in Subsection 3.1(d).
"Governmental Authority": the federal government, any state or
political subdivision thereof, any city or municipal entity, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Grantor": the Borrower and each Guarantor other than Holdings.
"Guarantor Payment": as defined in Subsection 11.7(a).
"Guarantors": Holdings, the Subsidiary Guarantors and any future
Subsidiary of the Borrower which is required by the terms of Section 7.26 of
this Agreement to execute a guaranty of the Obligations in favor of the Secured
Parties.
"Hazardous Material": any substance, material or waste which is
regulated by, or forms the basis of liability under, any Environmental Laws,
including any material or substance which is (a) defined as a "solid waste,"
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "pollutant," "contaminant,"
"hazardous constituent," "special waste," "toxic substance" or other similar
term or phrase under any Environmental Laws or (b) petroleum or any fraction or
by-product thereof, asbestos, polychlorinated biphenyls ("PCBs") or any
radioactive substance which is not naturally occurring radioactive material.
"Holdings": as defined in the first paragraph of this Agreement.
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"Indebtedness": as to any Person, at a particular time, (a)
indebtedness of such Person for borrowed money, (b) indebtedness of such Person
for the deferred purchase price of property or services, which purchase price is
(i) due more than six (6) months from the date of incurrence of the obligation
in respect thereof or (ii) evidenced by a note or similar written instrument,
(c) obligations under leases which shall have been or should be, in accordance
with GAAP, recorded as Capital Leases in respect of which obligations such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person assures a creditor against loss,
(d) obligations of such Person to purchase or repurchase accounts receivable,
chattel paper or other payment rights sold or assigned by such Person, (e)
indebtedness or obligations of such Person evidenced by or under or with respect
to letters of credit, notes, bonds or other debt instruments (other than letters
of credit that are cash collateralized), and (f) all Indebtedness referred to in
clause (a), (b), (c), (d) or (e) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including Accounts and General Intangibles)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness.
"Indemnified Liabilities": as defined in Subsection 7.8(a).
"Indemnified Person": as defined in Subsection 7.8(a).
"Indemnified Proceeding": as defined in Subsection 7.8(a).
"Interest Expense": for any period, the aggregate amount of interest,
hedging costs and fees (excluding closing fees) paid or payable during such
period by the Loan Parties in respect of Total Debt.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
Business Day of each Fiscal Quarter to occur while such Loan is outstanding, (b)
as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided,
however, that in the case of any LIBOR Period greater than three (3) months in
duration, interest shall be payable at three-month intervals and on the last day
of such LIBOR Period; and provided, further, that, in addition to the foregoing,
each of (x) the date upon which all of the Commitments have been terminated and
the Loans have been paid in full and (y) the Maturity Date shall be deemed to be
an "Interest Payment Date" with respect to any interest which is then accrued on
the Loan.
"Inventory": as defined in Subsection 3.1(e).
"Investment Property": as defined in Subsection 3.1(f).
"Landlord Consent": a consent substantially in the form of Exhibit F or
in other form acceptable to the Administrative Agent executed by the
owner/landlord, sublessor and/or licensor (including carriers) of any real
property where any of the Collateral is or is to be located.
"Law": any law (including common law), constitution, statute,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Governmental Authority of competent jurisdiction or of any arbitrator (including
ERISA, the Code, the UCC, any applicable tax law, product safety law,
occupational safety or health law, Communications Law, Environmental Law and/or
securities laws).
"Lenders": as defined in the first paragraph of this Agreement.
"Lenders' Expenses": as defined in Section 7.10.
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"LIBOR Business Day": a Business Day on which banks in the city of
London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan": any portion of the Loan bearing interest by reference to
the LIBOR Rate.
"LIBOR Period": with respect to any LIBOR Loan, each period commencing
on a LIBOR Business Day selected by the Borrower pursuant to this Agreement and
ending one, two, three or six months thereafter, as selected by the Borrower's
irrevocable notice to the Administrative Agent as set forth in Subsection
2.8(e); provided, however, that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is
not a LIBOR Business Day, such LIBOR Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such LIBOR Period into another calendar month in
which event such LIBOR Period shall end on the immediately preceding
LIBOR Business Day;
(b) any LIBOR Period pertaining to a LIBOR Loan that begins on
the last LIBOR 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 LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month;
(c) the Borrower shall select LIBOR Periods so as not to
require a scheduled payment of any LIBOR Loan during a LIBOR Period for
such Loan; and
(d) the Borrower shall select LIBOR Periods so that there
shall be no more than six (6) separate LIBOR Loans in existence at any
one time.
"LIBOR Rate": for each LIBOR Period, a rate of interest determined by
the Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for
the applicable LIBOR Period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the second full LIBOR Business Day next
preceding the first day of each LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be
used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto, as now
and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such
Board) which are required to be maintained by a member bank of the
Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to the
Administrative Agent and the Borrower.
"Lien": any mortgage, pledge, hypothecation, lien (statutory or other),
judgment lien, security interest, security agreement, charge or other
encumbrance, or other security arrangement of any nature whatsoever, including
any installment contract, conditional sale or other title retention arrangement,
any
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sale of accounts receivable or chattel paper, any assignment, deposit
arrangement or lease intended as, or having the effect of, security and the
filing of any financing statement under the UCC or comparable law of any
jurisdiction.
"Loan": at any time, the aggregate amount of Advances outstanding to
the Borrower.
"Loan Account": as defined in Section 2.11.
"Loan Documents": this Agreement, the Notes, the other Security
Documents, any guaranty by a Guarantor not a party hereto, the GECC Fee Letter
and all filings and other agreements, instruments, documents and certificates
identified as Loan Documents in the Closing Checklist.
"Loan Parties": the Borrower, Holdings and each other Guarantor.
"Lucent Agreement": the General Agreement LNM970123CRUSX made by and
between Holdings and LucentTechnologies Inc. ("Lucent") dated as of April 4,
1997, as amended by Amendments 1, 2 and 3 thereto.
"Markets": as defined in Schedule 1.
"Material Adverse Change": a material adverse change in (a) a material
portion of the Collateral, (b) the business, financial or other condition,
prospects or Projections of the Loan Parties taken as a whole (c) the ability of
the Loan Parties to perform their obligations under this Agreement, the Notes or
the other Loan Documents or (d) the Administrative Agent's or the Lenders'
ability to enforce the rights and remedies granted under this Agreement or the
other Loan Documents, in all cases whether attributable to a single circumstance
or event or an aggregation of circumstances or events.
"Material Adverse Effect": an effect that has, results in or causes or
has a reasonable likelihood of resulting in or causing a Material Adverse
Change.
"Maturity Date": the earlier of April 29, 2007 and the date, if any,
on which the Loan matures by notice of prepayment, acceleration or otherwise.
"Maximum Lawful Rate": as defined in Subsection 2.8(f).
"Network": a fiber optic transmission and communications system
operated by a Loan Party, including all Equipment related thereto.
"Non-Funding Lender": as defined in Subsection 10.9(a)(ii).
"Note": as defined in Section 2.2.
"Notice of Conversion/Continuation": as defined in Subsection 2.8(e).
"Obligations": all loans, advances, debts, liabilities and obligations
for the performance of covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable) owing by any Loan Party to the
Administrative Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any Note, agreement or other instrument, arising under this Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest which accrues after the commencement of any case or proceeding in
bankruptcy
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after the insolvency of, or for the reorganization of, any Loan Party, whether
or not allowed in such case or proceeding), Fees, expenses, attorneys' fees and
any other sum chargeable to any Loan Party under this Agreement or any of the
other Loan Documents.
"Organizational Documents": with respect to a corporation, the
certificate or articles of incorporation and by-laws of such corporation; with
respect to a partnership, the certificate of partnership (or limited
partnership, as applicable) and partnership agreement, together with the
analogous documents for any corporate or partnership general partner; with
respect to a limited liability company, the certificate of formation or articles
of organization and operating agreement; and in any case, any other document
governing the formation and conduct of business by such entity.
"Other Lender": as defined in Subsection 10.9(d).
"PBGC": the Pension Benefit Guaranty Corporation established under
Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to its functions.
"Permits": all consents, licenses, notices, approvals, authorizations,
filings, orders, registrations, and permits required by any Governmental
Authority for the construction and operation of a Network (excluding Regulatory
Authorizations), issued or obtained as and when required in accordance with all
Requirements of Law.
"Permitted Acquisition": the acquisition by the Borrower or any of its
Subsidiaries of a Person engaged in the Telecommunications Business, provided
that (a) the Person shall become a Guarantor; (b) the consolidated cash balances
of the Borrower and its Subsidiaries, when combined with the unfunded
Commitment, is sufficient to fully fund the then approved Business Plan, (c) no
Default or Event of Default exists or is continuing, both before and after
giving effect to the Permitted Acquisition and (d) the Borrower shall provide
the Lenders with a financial analysis of the Permitted Acquisition showing
compliance with Schedule 7.17 acceptable to the Requisite Lenders.
"Permitted Encumbrances": the Liens permitted under Section 8.2.
"Permitted Holdings Debt": (a) unsecured Indebtedness of Holdings with
no interest or principal payments due prior to the Maturity Date and with
covenants in form and substance acceptable to the Requisite Lenders, (b) the
Company Notes and other existing Indebtedness specified on Schedule 8.1, and any
refinancings thereof on terms that in the aggregate are not less favorable to
the Loan Parties, (c) unsecured Indebtedness incurred for purposes of the
Telecommunications Business in an amount outstanding at any time not greater in
the aggregate than $5,000,000 less the amount of Indebtedness incurred pursuant
to clause (c) of the definition of Permitted Indebtedness outstanding at such
time and (d) interest rate protection agreements in connection with Indebtedness
of the Loan Parties permitted hereunder.
"Permitted Indebtedness": (a) the Obligations, (b) purchase money
Indebtedness and Capital Lease Obligations in an amount not greater than
$25,000,000 in the aggregate outstanding at any one time, (c) unsecured
Indebtedness incurred for purposes of the Telecommunications Business in an
amount outstanding at any time not greater in the aggregate than $5,000,000, (d)
Permitted Intercompany Indebtedness and (e) interest rate protection agreements
in connection with Indebtedness of the Loan Parties permitted hereunder.
"Permitted Intercompany Indebtedness": Indebtedness of the Borrower to
any of its Subsidiaries and Indebtedness of Holdings or of any Subsidiary of the
Borrower to the Borrower or any Subsidiary of
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the Borrower, provided, however, that if any such Indebtedness is evidenced by
an instrument, such instrument is pledged to the Administrative Agent to secure
the Obligations pursuant to Section 3.6.
"Person": any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan": any employee pension benefit plan to which Section 4021 of
ERISA applies and which any Loan Party or ERISA Affiliate maintains, contributes
to or has an obligation to contribute to or maintain for employees of any Loan
Party or to which any Loan Party or ERISA Affiliate maintained, made or was
required to make, contributions at any time within the preceding five (5) years.
"Proceeds": as defined in Subsection 3.1(g).
"Projections": the Loan Parties' forecasted consolidated and
consolidating (a) balance sheets; (b) profit and loss statements; and (c) cash
flow statements, all prepared on a Subsidiary by Subsidiary basis, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share": (a) with respect to all matters relating to any
Lender other than as provided in clause (b) below, the percentage obtained by
dividing (i) the Commitment of such Lender by (ii) the aggregate Commitments of
all Lenders and (b) with respect to the Loan on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loan held by that Lender by (ii) the
outstanding principal balance of the Loan held by all Lenders.
"PUC": the public utilities commission for the state or any other
jurisdiction in which all or any portion of a Network is located, or any
successor agency, and any successor, in whole or in part, to its functions or
jurisdictions, and any other Persons specified on Schedule 1.
"Quarterly Revenues": for any period, revenues of the Borrower and the
Restricted Subsidiaries for the previous quarter that are (a) received from any
third party entity which is not an Affiliate of Holdings or any of its principal
equity owners and (b) received from an entity that is not disputing the payment
of receivables.
"Regulatory Authorizations": all approvals, authorizations, licenses,
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter made by, to or in respect of any telecommunications Governmental
Authority, including any certificates of public convenience and all grants,
approvals, licenses, filings and registrations from or to the FCC or any PUC or
under any Communications Law necessary in order to enable any Loan Party to
provide telecommunications service of the type provided or proposed to be
provided by such Loan Party and any authorizations specified on Schedule 1.
"Regulatory Event": any of the following events: (a) any Lender becomes
subject to regulation as a "carrier," a "telephone company," a "common carrier,"
a "public utility" or otherwise under any applicable law or governmental
regulation, federal, state or local, solely as a result of the transactions
contemplated by this Agreement and the other Loan Documents or (b) any Loan
Party becomes subject to regulation by any Governmental Authority in any way
that is materially different from the regulation existing at the date hereof and
that could reasonably be expected to have a Material Adverse Effect or (c) the
FCC or any PUC issues an order revoking, denying or refusing to renew, or
recommending the revocation, denial or non-renewal of, any Regulatory
Authorization that could reasonably be expected to have a Material Adverse
Effect.
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"Regulatory Reserve": Ten Million Dollars ($10,000,000) until US
Xchange of Indiana, L.L.C. ("USX of Ind.") shall have delivered to the
Administrative Agent all Regulatory Authorizations, legal opinions, financing
statements and other documents as the Administrative Agent shall reasonably
request relating to USX of Ind. becoming a Subsidiary Guarantor.
"Release": any spill, emission, leaking, pumping, pouring, emptying,
escape, injection, deposit, disposal, discharge, dumping or leaching of
Hazardous Material in the environment.
"Replacement Lender": as defined in Subsection 2.13(d).
"Reportable Event": (a) a reportable event described in Section 4043 of
ERISA and regulations thereunder, (b) a withdrawal by a substantial employer
from a Plan to which more than one employer contributes, as referred to in
Section 4063(b) of ERISA, or (c) a cessation of operations at a facility causing
more than twenty percent (20%) of Plan participants to be separated from
employment, as referred to in Section 4062(f) of ERISA.
"Required Consents": the Governmental Authority approvals required with
respect to each Loan Party's execution, delivery and performance of this
Agreement and the other Loan Documents set forth in Schedule 4.4.
"Requirement of Law": as to any Person, the Organizational Documents of
such Person, any Law applicable to or binding upon such Person or any of its
properties or transactions or to which such Person or any of its property or
transactions is subject and all Permits or Regulatory Authorizations issued to
any Loan Party.
"Requirements": as defined in Section 7.11.
"Requisite Lenders": the Lenders having more than at least sixty-six
and two-thirds percent (66-2/3%) of (a) the Commitments of all Lenders or (b) if
the Commitments have been terminated, the outstanding principal amount of the
Loan.
"Responsible Officer": of a Person, the chief executive officer, the
president, the general counsel, the chief financial officer or the director of
treasury operations of such Person.
"Restricted Subsidiary": any Subsidiary of Holdings that is not an
Unrestricted Subsidiary.
"Right-of-Way": any Loan Party's right, title and interest in, to, over
or under property located in any state or territory, acquired or to be acquired
by such Loan Party at any time for Network purposes, and all such real and
personal property interests as shall be necessary to construct, install, operate
and maintain such Loan Party's Network, including satellite rights, underground
rights, access to and from all such property and any such property or property
rights now or hereafter necessary to connect customers and service providers to
the Network.
"Right-of-Way Agreements": all easements, use agreements, contracts,
deeds, co-location agreements, licenses, leases, agreements, documents or means
pursuant to which any Loan Party acquires any Right-of-Way, regardless of
whether such Right-of-Way consists of real property, real property interests or
personal property.
"Secured Parties": the Administrative Agent and the Lenders.
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"Security Documents": this Agreement, the Landlord Consents, all
financing statements, and any other agreement or document required by the terms
of this Agreement to be entered into by a Guarantor not party to this Agreement
granting a security interest or other Lien to secure payment of the Obligations.
"Senior Debt": all Indebtedness of the Borrower and the Restricted
Subsidiaries.
"Senior Debt to Total Capitalization": at any date, Senior Debt at such
date, divided by Total Capitalization at the same date.
"Senior Leverage Ratio": for any period, Senior Debt as of any date
divided by EBITDA for the last four (4) consecutive Fiscal Quarters ending on or
prior to such date.
"Site Leases": collectively, all leases, subleases, tower leases,
co-location agreements, license agreements, easements, use agreements,
privileges, access agreements, right-of-way agreements and all other agreements
relating to the use by any Loan Party of any Site.
"Site(s)": any site where Equipment with a cost of more than $100,000
is located.
"Software" and "Software Licenses": any software now or hereafter
owned by, or licensed to, any Loan Party or with respect to which such Loan
Party has or may have license or use rights.
"Solvent": with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person;
(b) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation, guarantees and pension plan liabilities) at any time shall be
computed as the amount which, in light of all the facts and circumstances
existing at the time, represents the amount which can reasonably be expected to
become an actual or matured liability.
"Stage 1": the period of time from the Closing Date until a date when
the Borrower submits Financial Statements and compliance certificates affirming
positive EBITDA for the previous four (4) consecutive Fiscal Quarters.
"Stage 2": the period immediately following the end of Stage 1.
"Stock": all shares, options, warrants, general or limited partnership
or membership interests or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or nonvoting, including common stock, preferred stock or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).
"Subsidiary": with respect to any Person, (a) any corporation (i) of
which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any
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contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person or
(ii) with respect to which any such Person has the right to vote or designate
the vote of fifty percent (50%) or more of such Stock, whether by proxy,
agreement, operation of law or otherwise and (b) any partnership or limited
liability company (i) in which such Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or (ii) of which any such Person is a general partner or may exercise the
powers of a general partner.
"Subsidiary Guarantor": each Subsidiary of the Borrower listed on the
signature pages hereof as a "Subsidiary Guarantor".
"System Agreements": any and all agreements and documents executed by
or delivered by or to any Loan Party at any time in connection with a Network or
its acquisition, construction or operation, including all management and
maintenance agreements, agreements for storage or warehousing of any Equipment,
Site Leases, interconnection agreements, Right-of-Way Agreements, capacity and
usage agreements and agreements with carriers, customers or subscribers.
"Taxes": taxes, levies, imposts, deductions, Charges or withholdings,
and all liabilities with respect thereto (including interest, penalties or
additions thereto), excluding taxes imposed on or measured by the net income of
the Administrative Agent or any Lender by or within the United States of America
or any other jurisdiction from or to which a payment is made by or on behalf of
the Borrower (except for such net income or other taxes which would not be
imposed but for the nexus of the Administrative Agent or any Lender arising as a
result of the transactions contemplated by this Agreement) or under which the
Administrative Agent or any Lender is organized or from which it makes the
Advances or any political subdivision of any thereof.
"Telecommunications Assets": all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
"Telecommunications Business": the business of (i) transmitting, or
providing services relating to the transmission of, voice fax, video or data
through owned or leased transmission facilities or the provision of Internet
related services, (ii) creating, developing or marketing communications related
network equipment, software and other devices for use in a Telecommunications
Business or (iii) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in clause (i) or (ii)
above.
"Termination Date": the date on which the Loan has been indefeasibly
repaid in full, all other Obligations then due have been indefeasibly paid in
full, and the Borrower shall not have any further right to borrow any monies
under this Agreement.
"Total Capitalization": at any date, Total Debt at such date plus
paid-in-capital (including preferred stock but excluding additional equity
issued as pay-in-kind dividends on issued and outstanding equity securities) at
such date for the Loan Parties on a consolidated basis, excluding any
accumulated deficits resulting from operations.
"Total Debt": the aggregate Indebtedness of the Loan Parties.
"Total Debt Service": for any period, the sum of: (a) scheduled
mandatory principal payments during such period on Total Debt and (b) Interest
Expense (excluding any portion thereof not payable in cash) for such period.
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"Total Debt to Total Capitalization": at any date, Total Debt at such
date divided by Total Capitalization as of the same date.
"Total Leverage Ratio": at any date, Total Debt at such date divided by
EBITDA for the last four (4) consecutive Fiscal Quarters ending on or prior to
such date.
"UCC": the Uniform Commercial Code as the same may from time to time be
in effect in the State of New York or, to the extent it may be required to apply
to any item or items of Collateral, the Uniform Commercial Code as in effect in
any other applicable jurisdiction.
"Unrestricted Subsidiary": a Subsidiary of Holdings engaged in the
Telecommunications Business in a market not set forth on Schedule 1 (a "New
Market") that is not a Subsidiary of the Borrower and is acquired or created
with the approval of the Requisite Lenders, such approval not to be unreasonably
withheld and to be given not more than ten (10) days following the presentation
to the Lenders of a business plan, prepared by Holdings based on reasonable
estimates and assumptions, for entering into such New Market, which business
plan (a) shall include a fully funded and committed financing plan consisting
only of Permitted Holdings Debt, proceeds of the sale by Holdings of Stock of
Holdings and Indebtedness of such Subsidiary that is not guaranteed or otherwise
supported by Holdings, the Borrower or any Restricted Subsidiary and (b) shall
reflect that no covenant of any Loan Document will be breached and that no
Default or Event of Default would result from the implementation of such
business plan.
1.2 Accounting Principles; Subsidiaries. Except as otherwise provided
in this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), consistently applied, and all
accounting or financial terms shall have the meanings ascribed to such terms by
GAAP. If at any time a Loan Party has any Subsidiaries, all accounting and
financial terms herein shall be deemed to include references to consolidation
and consolidating principles, and covenants, representations and agreements with
respect to a Loan Party and its properties and activities shall be deemed to
refer to such Loan Party and its consolidated Subsidiaries collectively. For
purposes of Section 7.17, GAAP shall be determined on the basis of such
principles in effect on the date of the most recent annual audited Financial
Statements provided hereunder (or if prior to delivery of the first such annual
audited Financial Statements hereunder, then on a basis consistent with the
annual audited Financial Statements referenced in Section 4.10); provided,
however, that if due to a change in application of GAAP or the rules promulgated
with respect thereto, (a) the Borrower shall object to determination of
compliance with the financial covenants in Section 7.17 on such basis or (b) the
Administrative Agent or the Requisite Lenders shall object to determination of
compliance therewith on such basis within thirty (30) days after delivery of
such Financial Statements, then such calculations shall be made on a basis
consistent with the most recent Financial Statements delivered as to which no
such objection shall have been made.
1.3 UCC Terms. Except as otherwise provided or amplified (but not
limited) herein, terms used in this Agreement that are defined in the UCC shall
have the same meanings herein.
1.4 General Construction; Captions. All definitions and other terms
used in this Agreement shall be equally applicable to the singular and plural
forms thereof, and all references to any gender shall include all other genders.
The words "hereof," "hereto," "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 Article, Section, Subsection or clause in this Agreement.
References herein to an Exhibit, Schedule, Article, Section, Subsection or
clause refer to the appropriate Exhibit, Schedule, Article, Section, Subsection
or clause in this Agreement unless otherwise specified. The word "including"
shall have the
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meaning represented by the phrase "including, without limitation." The captions
and table of contents in this Agreement and the other Loan Documents are for
convenience only, and in no way limit or amplify the provisions hereof.
1.5 References to Documents and Laws. All defined terms and references
in this Agreement or any of the other Loan Documents to any agreement, note,
instrument, certificate or other document shall be deemed to refer to all
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements thereof and to all appendices, exhibits or
schedules thereto, in each case as the same may be in effect at any and all
times such reference becomes operative. All references herein and in any of the
other Loan Documents to any Law shall include all amendments thereof and any
successor statute and regulations under any of the foregoing.
ARTICLE 2: LOANS
2.1 Revolving Credit Commitments. On the terms and subject to
conditions hereof, each Lender agrees to make available to the Borrower from
time to time during the period from the Closing Date through the Commitment
Termination Date its Pro Rata Share of each Advance requested by the Borrower in
accordance with Section 2.4. The Pro Rata Share of any Lender of the Loan shall
not at any time exceed such Lender's Pro Rata Share of the Available Credit. The
obligation of each Lender hereunder shall be several and not joint. Until the
Commitment Termination Date, the Borrower may from time to time borrow, repay
and reborrow under this Section 2.1.
2.2 Notes. The Borrower shall execute and deliver to each Lender a note
to evidence the obligation of the Borrower to repay the amount of such Lender's
Advances together with interest thereon as prescribed in Section 2.8. Each note
shall be in the principal amount of the Commitment of the applicable Lender,
dated the Closing Date, and substantially in the form of Exhibit A (each a
"Note" and, collectively, the "Notes").
2.3 Reliance on Notices. The Administrative Agent and each Lender shall
be entitled to rely upon, and shall be fully protected in relying upon, any
Borrowing Certificate, Notice of Conversion/Continuation or similar notice
believed by the Administrative Agent or such Lender to be genuine. The
Administrative Agent and each Lender may assume that each Person executing and
delivering such a notice was duly authorized, unless the responsible individual
acting thereon for the Administrative Agent or such Lender has actual knowledge
to the contrary.
2.4 Procedures for Borrowing.
(a) Borrowing Certificates. To request an Advance, the Borrower
shall send to the Administrative Agent a completed Borrowing Certificate at
least three (3) Business Days prior to the requested Borrowing Date for LIBOR
Loans and one (1) Business Day prior to the requested Borrowing Date for Base
Rate Loans (or such shorter period for the First Borrowing Date as agreed to by
the Lenders). Each Borrowing Certificate shall specify therein (i) the requested
Borrowing Date, (ii) the aggregate amount of such Advance, (iii) the amount
thereof, if any, requested to be LIBOR Loans and (iv) the initial LIBOR Period
or Periods for any such LIBOR Loans. The Loan shall be made as Base Rate Loans
unless (subject to Section 2.13) the Borrowing Certificate specifies that all or
a portion thereof shall be LIBOR Loans. All LIBOR Loans shall comply with
Subsection 2.8(e).
Each Borrowing Certificate shall be irrevocable and binding on the
Borrower. In the case of any requested Advance which the related Borrowing
Certificate specifies is to be comprised of LIBOR Loans, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Borrowing Certificate for
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such requested Advance the applicable conditions set forth in Article 6,
including any loss (excluding loss of margin), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any LIBOR Loan to be made by such Lender as part of such
requested Advance when such LIBOR Loan, as a result of such failure, is not made
on such date.
(b) Each Lender's Obligation Several. The failure of any
Lender to make the Advance to be made by it as part of the Loan shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Advance on such Borrowing Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender
on the Borrowing Date.
(c) Advances. Each Advance (other than the last Advance) shall
be in an aggregate principal amount of not less than $1,000,000 and integral
multiples of $100,000 in excess thereof. No amount may be borrowed hereunder on
or after the Commitment Termination Date.
2.5 Loan Amortization. The Borrower shall repay the Loan in
installments as set forth on Schedule 2.5.
2.6 Maturity. The entire unpaid balance of the Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Maturity Date, if not sooner paid in full
pursuant to Section 2.7.
2.7 Prepayments; Commitment Reductions.
(a) Voluntary. (i) The Borrower may, at its option, at any
time and from time to time upon three (3) Business Days' prior notice to the
Administrative Agent, specifying the date and amount of prepayment, in a minimum
amount of $1,000,000, voluntarily prepay part of the Loan or, at any time, upon
ten (10) Business Days' prior written notice to the Administrative Agent,
voluntarily prepay all of the Loan plus all accrued but unpaid interest thereon
and any LIBOR funding breakage costs in accordance with Subsection 7.8(b). Such
notice shall be irrevocable and the principal amount specified in such notice
shall be due and payable on the date specified together with accrued interest on
the amount prepaid.
(ii) The Borrower may, at its option, at any time, permanently
reduce from time to time or terminate the Commitment; provided, however, that
the Commitment shall not be reduced to an amount less than the outstanding
principal amount of the Loan.
(b) Mandatory. (i) Asset Dispositions. In the event of receipt
by any Loan Party of Asset Disposition Net Proceeds that are not reinvested
within two hundred ten (210) days of receipt in Telecommunications Assets in
which the Administrative Agent for the benefit of the Secured Parties has a
first priority perfected security interest, the Borrower shall prepay the Loan
on the next Business Day following the end of such 210 day period in an amount
equal to all such proceeds not so used.
(ii) Debt Sales. Upon receipt by Holdings of Debt Security
Sale Net Proceeds in excess of the amount permitted to be used to invest or
acquire Unrestricted Subsidiaries, the Borrower shall prepay the Loan in an
amount equal to one hundred percent (100%) of such excess; provided, however,
that such amount of prepayment shall be reduced to fifty percent (50%) of such
excess at such time when the Total Leverage Ratio is not greater than 5.0X.
(iii) Excess Cash Flow. The Borrower shall prepay the Loan, in
an amount equal to fifty percent (50%) of Excess Cash Flow for each such Fiscal
Year commencing with the Fiscal Year ending December 31, 2002, which payment
shall be made on the earlier of the date which is ten (10) days
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after (A) the date on which Holdings' annual audited Financial Statements for
the immediately preceding Fiscal Year are delivered pursuant to Section 7.1 or
(B) the date on which such annual audited Financial Statements were required to
be delivered pursuant to Section 7.1; provided, however that such amount is not
projected in the Business Plan to be reinvested by the Borrower and its
Subsidiaries in the following year; and provided further that any such
prepayment shall be required only if the Total Leverage Ratio is equal to or
greater than 5.0X.
(c) Commitment Reductions. Any prepayment required to be made
prior to the Commitment Termination Date shall reduce the Commitment of the
Lenders dollar for dollar, and the Commitment of each Lender shall be reduced by
its Pro Rata Share of such reduction.
2.8 Interest and Applicable Margin.
(a) The Borrower shall pay interest to the Administrative
Agent, for the ratable benefit of the Lenders in accordance with the Advances
made by each Lender, in arrears on each applicable Interest Payment Date, at the
following rates: (i) for Base Rate Loans, the Base Rate plus the Applicable Base
Margin per annum or (ii) for LIBOR Loans, the applicable LIBOR Rate plus the
Applicable LIBOR Margin per annum, based on the aggregate amount of Loans
outstanding from time to time. The Applicable Base Margin and Applicable LIBOR
Margin will be 3.00% and 4.00% per annum, respectively, as of the date hereof.
(b) If any payment on the Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and of interest shall be made by the Administrative Agent on the basis of a
three hundred sixty (360) day year, in each case for the actual number of days
occurring in the period for which such interest and Fees are payable. The Base
Rate shall be determined each day based upon the Base Rate as in effect each
day. Each determination by the Administrative Agent of an interest rate and Fees
hereunder shall be conclusive, absent manifest error.
(d) As long as an Event of Default shall have occurred and be
continuing under Subsection 9.1(a) or (i) or as long as any other Event of
Default shall have occurred and be continuing at the election of the Requisite
Lenders confirmed by written notice to the Borrower, the interest rates
applicable to the Loan shall be increased by two percent (2%) per annum above
the rates of interest or the rate of such Fees otherwise applicable hereunder
("Default Rate"), and all other outstanding Obligations shall bear interest at
the Default Rate applicable to such Obligations. Interest at the Default Rate
shall accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.
(e) As long as no Default or Event of Default shall have
occurred and be continuing, the Borrower shall have the option to (i) request
that any Advances be made as a LIBOR Loan, (ii) convert at any time all or any
part of the outstanding Loan from a Base Rate Loan to one or more LIBOR Loans,
(iii) convert any LIBOR Loan to a Base Rate Loan, subject to payment of LIBOR
funding breakage costs in accordance with Subsection 7.8(b) if such conversion
is made prior to the expiration of the LIBOR Period applicable thereto, or (iv)
continue all or any portion of any LIBOR Loan upon the expiration of the
applicable LIBOR Period with the succeeding LIBOR Period of that continued Loan
commencing on the last day of the LIBOR Period of the LIBOR Loan to be
continued. Any portion of the Loan to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of such amount. Any such election must be made
by 11:00 a.m.
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(New York time) on the third (3rd) Business Day prior to (1) the date of any
proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loan to be continued as such or (3)
the date on which the Borrower wishes to convert a Base Rate Loan to a LIBOR
Loan for a LIBOR Period designated by the Borrower in such election. If no
election is received with respect to a LIBOR Loan by 11:00 a.m. New York time)
on the third (3rd) Business Day prior to the end of the LIBOR Period with
respect thereto (or if an Event of Default shall have occurred and be
continuing), that LIBOR Loan shall be converted to a Base Rate Loan at the end
of its LIBOR Period. The Borrower must make such election by notice to the
Administrative Agent in writing, by telecopy or overnight courier. In the case
of any conversion or continuation, such election must be made pursuant to a
written notice (a "Notice of Conversion/Continuation") in the form of Exhibit C.
(f) Notwithstanding anything to the contrary set forth in this
Section 2.8, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, the Borrower shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by the
Administrative Agent, on behalf of the Lenders, is equal to the total interest
which would have been received had the interest rate payable hereunder been (but
for the operation of this paragraph) the interest rate payable since the date
hereof as otherwise provided in this Agreement. Thereafter, interest hereunder
shall be paid at the rate(s) of interest and in the manner provided in
Subsections 2.8(a) through (e) above unless and until the rate of interest again
exceeds the Maximum Lawful Rate, and at that time this paragraph shall again
apply. In no event shall the total interest received by any Lender pursuant to
the terms hereof exceed the amount which such Lender could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to
this paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. If, notwithstanding the provisions of this Subsection
2.8(f), a court of competent jurisdiction shall finally determine that the
Lender has received interest hereunder in excess of the Maximum Lawful Rate, the
Administrative Agent shall, to the extent permitted by applicable law, promptly
apply such excess in the order specified in Section 2.10 and thereafter shall
refund any excess to the Borrower or as a court of competent jurisdiction may
otherwise order.
2.9 Payments. All payments and prepayments to be made in respect
of principal, interest or other amounts due from the Borrower hereunder or under
any other Loan Document shall be payable on or before 1:00 p.m., New York time,
on the day when due, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived, and an action therefor shall
immediately accrue. Such payments shall be made to the Administrative Agent at
the Administrative Agent's office at 55 Federal Road, Danbury, Connecticut
06810, Attn: TFS Portfolio Manager or such other location specified in writing
by the Administrative Agent, in immediately available funds, without set off,
recoupment, counterclaims or any other deduction of any nature. Payments
received after 1:00 p.m., New York time, on any Business Day shall be deemed to
have been received on the following Business Day.
2.10 Application and Allocation of Payments.
(a) As long as no Default or Event of Default shall have
occurred and be continuing, (i) payments matching specific scheduled payments
then due shall be applied to those scheduled payments; and (ii) prepayments,
whether voluntary or mandatory, shall be applied to the installments of the Loan
in the inverse order of their maturity. All payments and prepayments applied to
the Loan shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share. As to
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each other payment, and as to all payments made when an Event of Default shall
have occurred and be continuing, the Borrower hereby irrevocably waives the
right to direct the application of any and all payments received from or on
behalf of the Borrower, and the Borrower hereby irrevocably agrees that the
Administrative Agent shall have the continuing exclusive right to apply any and
all such payments against the Obligations of the Borrower as the Administrative
Agent may deem advisable notwithstanding any previous entry by the
Administrative Agent in the Loan Account or any other books and records. In the
absence of a specific determination by the Requisite Lenders and the
Administrative Agent with respect thereto, payments shall be applied to amounts
then due and payable in the following order: (1) to the Administrative Agent for
Fees, reimbursement of expenses (including costs of collection and amounts
expended in connection with the sale or administration of the Collateral),
protective advances made pursuant to Section 3.11 and Advances on behalf of a
Non-Funding Lender made pursuant to Section 10.9(a)(ii); (2) to interest on the
Loan; (3) to principal payments on the Loan; and (4) to all other Obligations
including all expenses of the Lenders to the extent reimbursable under Section
7.10.
(b) The Administrative Agent is authorized to, and at its sole
election may, charge to the Loan balance on behalf of the Borrower and cause to
be paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Subsection 7.7(a)) and interest and principal, other than
principal of the Loan, owing by the Borrower under this Agreement or any of the
other Loan Documents if and to the extent the Borrower fails to promptly pay any
such amounts as and when due, even if such charges would cause the balance of
the Loan to exceed the Commitment. At the Administrative Agent's option and to
the extent permitted by law, any charges so made shall constitute part of the
Loan hereunder.
2.11 Loan Account and Accounting. The Administrative Agent shall
maintain a loan account (the "Loan Account") on its books to record: all
Advances, all payments made by the Borrower, and all other debits and credits as
provided in this Agreement with respect to the Loan or any of the other
Obligations. All entries in the Loan Account shall be made in accordance with
the Administrative Agent's customary accounting practices as in effect from time
to time. The balance in the Loan Account, as recorded on the Administrative
Agent's most recent printout or other written statement, shall, absent manifest
error, be presumptive evidence of the amounts due and owing to the
Administrative Agent and the Lenders by the Borrower; provided, however, that
any failure to so record or any error in so recording shall not limit or
otherwise affect the Borrower' duty to pay the Obligations. The Administrative
Agent shall render to the Borrower a monthly accounting of transactions with
respect to the Loan setting forth the balance of the Loan Account. Unless the
Borrower notifies the Administrative Agent in writing of any objection to any
such accounting (specifically describing the basis for such objection), within
thirty (30) days after the date thereof, each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive upon the
Borrower in all respects as to all matters reflected therein. Only those items
expressly objected to in such notice shall be deemed to be disputed by the
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.
2.12 Taxes.
(a) Any and all payments by the Borrower hereunder (including
any payments made pursuant to Sections 7.8 and 7.10 or under any other Loan
Document) shall be made, in accordance with this Section 2.12, free and clear of
and without deduction for any and all present or future Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder (including any sum payable pursuant to Sections 7.8 and 7.10
or under any other Loan Document), (i) the sum payable shall be increased as
much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) the Administrative Agent or the Lenders, as applicable, receive an amount
equal to the sum they would have received had no
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such deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay on behalf of the relevant Lender the full amount
deducted to the relevant taxing or other authority in accordance with applicable
law. Within thirty (30) days after the date of any payment of such Taxes, the
Borrower shall furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof.
(b) Each Loan Party that is a signatory hereto shall jointly
and severally indemnify and, within ten (10) days of demand therefor, pay the
Administrative Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 2.12)
paid by the Administrative Agent or such Lender, as appropriate, and any
liability (including penalties, interest, additions thereto and expenses)
arising therefrom or with respect thereto.
2.13 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the date hereof, from any central
bank or other Governmental Authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then the
Borrower shall from time to time upon demand by such Lender made within ninety
(90) days of the occurrence thereof (with a copy of such demand to
Administrative Agent) pay to the Administrative Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of that reduction and showing the
basis of the computation thereof submitted by such Lender to the Borrower and to
the Administrative Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the date hereof, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower and to the Administrative Agent by such Lender,
shall be conclusive and binding on the Borrower for all purposes, absent
manifest error. Each Lender agrees that, as promptly as practicable after it
becomes aware of any circumstances referred to above which would result in any
such increased cost, but in any event within ninety (90) days thereof, it shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by the Borrower pursuant to this Subsection
2.13(b).
(c) Notwithstanding anything to the contrary contained herein,
if the introduction of or any change in any law or regulation (or any change in
the interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that the Lender is able to make or to continue to fund or to maintain
such LIBOR Loan at another branch or office of that the Lender without, in that
Lender's opinion, adversely affecting it or its Loan or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to the Borrower
through
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Administrative Agent, (i) the obligation of such Lender to agree to make or to
make or to continue to fund or maintain LIBOR Loans shall terminate and (ii) the
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing by the
Borrower to such Lender, together with interest accrued thereon, unless the
Borrower, within five (5) Business Days after the delivery of such notice and
demand, converts the Loan into a Base Rate Loan.
(d) Within fifteen (15) days after receipt by the Borrower of
written notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Section 2.12 or Subsection
2.13(a) or 2.13(b), the Borrower may, at its option, notify the Administrative
Agent and such Affected Lender of its intention to replace the Affected Lender.
As long as no Default or Event of Default shall have occurred and be continuing,
the Borrower, with the consent of the Administrative Agent, may obtain, at the
Borrower's expense, a replacement Lender ("Replacement Lender") for the Affected
Lender, which Replacement Lender shall be a commercial bank or other financial
institution having combined capital and surplus of at least $300,000,000 or must
otherwise be reasonably satisfactory to the Administrative Agent. If the
Borrower obtains a Replacement Lender within ninety (90) days following notice
of its intention to do so, the Affected Lender must sell and assign its Loan and
Commitment to such Replacement Lender for an amount equal to the principal
balance of the Loan held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale; provided, however, that
the Borrower shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment.
Notwithstanding the foregoing, the Borrower shall not have the
right to obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within fifteen (15) days following its
receipt of the Borrower's notice of intention to replace such Affected Lender.
Furthermore, if the Borrower gives a notice of intention to replace and does not
so replace such Affected Lender within ninety (90) days thereafter, the
Borrower's rights under this Subsection 2.13(d) shall terminate and the Borrower
shall promptly pay all increased costs or additional amounts demanded by such
Affected Lender pursuant to Subsections 2.12(a), 2.13(a) and 2.13(b).
2.14 Use of Proceeds. The Borrower shall utilize (a) Fifteen
Million Dollars ($15,000,000) of the proceeds of the Advances to pay for
Equipment, Software and services as purchased from Lucent by March 31, 1999
under the Lucent Agreement; (b) Ten Million Dollars ($10,000,000) of the
proceeds of the Advances to pay for purchases of Equipment, Software and
services from Lucent under the Lucent Agreement made subsequent to March 31,
1999; and (c) the balance as set forth in the second recital to this Agreement
provided that the same relate to Telecommunications Assets that are integral to
a Network in a Market or are for Permitted Acquisitions not in excess of Ten
Million Dollars ($10,000,000).
2.15 Fees.
(a) The Borrower shall pay to the Administrative Agent, for
the ratable benefit of the Lenders, the fees described on Schedule 2.15 in
connection with this Agreement (the "Commitment Fees").
(b) The Borrower shall pay to GECC, individually and for its
own account, additional Fees, the amount and dates of payment of which are
embodied in a separate agreement dated March 17, 1999 between Holdings and GECC
(the "GECC Fee Letter").
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ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
3.1 Grant of Security Interest. To secure the prompt and complete
payment, performance and observance of all of the Obligations (specifically
including each Grantor's Obligations arising under the provisions of Article 9),
each Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates
and transfers to the Administrative Agent for the benefit of the Secured Parties
a continuing Lien upon all of such Grantor's right, title and interest in and to
the following kinds and types of property, whether now owned or hereafter
acquired or arising, wherever located, together with all substitutions therefor
and all accessions, replacements and renewals thereof, and in all proceeds and
products thereof (collectively, the "Collateral"):
(a) all existing and future accounts, accounts receivable and
rights to payment, including all accounts receivable created by or arising from
all sales or leases of goods or rendition of services by such Grantor to its
customers or subscribers, all unpaid seller's rights (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom, all rights to any goods represented by any of the foregoing,
including returned or repossessed goods, all reserves and credit balances
arising from any of the foregoing, all guarantees or collateral for any of the
foregoing and all insurance policies or rights relating to any of the foregoing
(collectively, "Accounts");
(b) all existing and future instruments, chattel paper,
documents of title, contracts, agreements, licenses, grants and rights, now or
hereafter entered into or acquired by such Grantor, as modified, replaced or
supplemented from time to time, including all System Agreements, purchase and
supply agreements and related warranty rights, operating agreements and
insurance policies (collectively, "Contracts");
(c) all equipment, furniture and fixtures, switches, towers,
electronics, transmitting equipment, Software, fiber-optic cables and other
cabling, hardware, devices and components, now or hereafter owned by such
Grantor, and any and all additions, substitutions and replacements to or of any
of the foregoing, together with all attachments, components, parts,
improvements, upgrades and accessions installed thereon or affixed thereto
(collectively, "Equipment");
(d) all general intangibles and intangible property, including
limited liability company membership interests, rights under Contracts, rights
to payment of any kind, insurance proceeds and amounts due under insurance
policies, deposit accounts, patent rights, trademarks, service marks,
copyrights, trade names, customer lists, goodwill, registrations, licenses,
license rights, rights in intellectual property, Software, Software Licenses,
computer programming (including source codes, object codes and all other
embodiments of computer programming or information), tax refunds and benefits,
corporate and other business records, refunds and indemnification rights, all
amounts owed at any time to such Grantor, all rights that such Grantor may have
at any time in any Regulatory Authorization, including any rights to payment
upon any transfer of any Regulatory Authorization (to the extent permitted by
applicable law in effect at any time and subject to Section 3.2), or any other
transfer or transaction intended to result in a transfer of such a Regulatory
Authorization, or the obtaining of FCC or PUC authority for another Person to
operate a telecommunications system in the area instead of such Grantor, all
rights to receive payment or property upon any assignment, transfer, sale or
surrender of any other Collateral and all other intangible personal property of
such Grantor of every kind and nature (collectively, "General Intangibles");
(e) all merchandise, inventory and goods, now or hereafter
owned, together with all goods and materials used or usable in manufacturing,
processing, packaging or shipping such merchandise, inventory and goods in all
states of production, from raw materials through work-in-progress to finished
goods (collectively, "Inventory");
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(f) all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts and commodity
accounts (collectively, "Investment Property"); and
(g) all proceeds and products, including (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to such
Grantor from time to time with respect to any of the Collateral, (ii) any and
all payments (in any form whatsoever) made or due and payable to such Grantor
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of any other Collateral
by any Governmental Authority (or any Person acting under color of Governmental
Authority), (iii) any and all other amounts from time to time paid or payable
under or in connection with any other Collateral and (iv) any and all cash
proceeds and non-cash proceeds in the form of Equipment, Inventory, Contracts,
Accounts, General Intangibles, documents or securities (collectively,
"Proceeds").
3.2 Regulatory Authorizations. The Administrative Agent and each
Lender acknowledge and recognize that each Grantor's assignment of or grant of a
security interest in its Regulatory Authorizations may be subject to
restrictions imposed by the FCC or any PUC on such Grantor's ability to assign
its interest in or transfer control of any Regulatory Authorizations. Likewise,
the Administrative Agent and each Lender acknowledge and recognize that each
Grantor's assignment of or grant of a security interest in any state or local
franchises or licenses may be subject to similar government restrictions. Each
Grantor acknowledges, however, that the value of the Regulatory Authorizations
is a critical part of the Collateral package, and agrees to use its best efforts
to effect the transfer of such Regulatory Authorizations to the Administrative
Agent on behalf of the Secured Parties, or its designee, upon the occurrence and
during the continuance of an Event of Default, upon written notice from the
Administrative Agent.
3.3 Grant of Security Interest by Holdings. To further secure the
prompt and complete payment, performance and observance of all of the
Obligations, Holdings hereby grants, assigns, conveys, mortgages, pledges,
hypothecates and transfers to the Administrative Agent for the benefit of the
Secured Parties a continuing Lien upon all of Holdings' right, title and
interest in and to the membership interests of the Borrower, whether now owned
or hereafter acquired or arising, wherever located, together with all
substitutions therefor and all accessions, replacements, renewals and proceeds
thereof.
3.4 Priority of Security Interests. The security interests granted
in Section 3.1 by each Grantor and in Section 3.3 by Holdings to the
Administrative Agent on behalf of the Secured Parties are and shall be
continuing and indefeasible first-priority security interests in the Collateral
to the extent such security interests may be perfected by filing under the UCC,
subject to no Liens except Permitted Encumbrances and no prior Liens except for
the Liens set forth on Schedule 8.2 and Equipment acquired pursuant to Capital
Leases permitted hereunder.
3.5 Operating Agreements. Each Grantor hereby represents and
warrants that its operating agreement provides that, upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent on
behalf of the Lenders shall be entitled to exercise all of the rights of the
member of such Grantor and that a transferee or assignee of a membership
interest of such Grantor shall become a member of such Grantor entitled to
participate in the management of such Grantor and, upon the transfer of the
entire interest of the transferor, such transferor ceases to be a member. Each
Grantor covenants and agrees that its operating agreement shall not be amended
in any way to adversely affect the perfection of the security interest in the
membership interest of such Grantor as provided for herein, including electing
to treat the membership interest of such Grantor as a security under Section
8-103 of the UCC, or to otherwise adversely affect the Secured Parties.
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3.6 Further Documentation; Pledge of Instruments. At any time and
from time to time, upon the written request of the Administrative Agent, and at
the sole expense of the Loan Parties, each Loan Party shall promptly execute,
deliver and record any documents, instruments, agreements and amendments, and
take all such further action, as the Administrative Agent may reasonably deem
desirable in obtaining the full benefits of this Agreement and of the rights and
powers herein granted, including the filing of any financing statements or
amendments under the UCC. Each Loan Party also hereby authorizes the
Administrative Agent to file any such financing statement or amendment thereto,
without the signature of the Borrower or such Restricted Subsidiary, or with a
copy or telecopy of such Loan Party's signature, to the extent permitted by
applicable law. If any amount payable under or in connection with any of the
Collateral or any Stock of the Borrower or any of its Subsidiaries shall be or
become evidenced by any promissory note or other instrument or any certificated
securities, such note, instrument or certificate shall be immediately pledged
and delivered to the Administrative Agent on behalf of the Secured Parties
hereunder, duly endorsed in a manner satisfactory to the Administrative Agent.
Each Loan Party shall keep and maintain, at its own cost and expense,
satisfactory and complete records of the Collateral, including a record of any
and all payments received and any and all credits granted with respect to the
Collateral and all other dealings with the Collateral. Each Loan Party shall
mark its books and records pertaining to the Collateral to evidence this
Agreement and the Liens granted hereby. The Borrower and each Restricted
Subsidiary shall duly register on its books and records pertaining to the Stock
the security interests of the Administrative Agent on behalf of the Secured
Parties in such Stock.
3.7 Accounts, Etc. Each Grantor shall be entitled to collect any
Accounts and General Intangibles until the occurrence of an Event of Default,
during the continuance of which the Administrative Agent or the Requisite
Lenders may restrict or terminate such authority. Each Grantor agrees that, upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent on behalf of the Secured Parties shall be entitled to
assume any or all of the Contracts, Accounts or General Intangibles in the place
of such Grantor (without releasing such Grantor from liability thereunder).
3.8 Further Identification of Collateral. Each Grantor shall
furnish to the Administrative Agent on behalf of the Secured Parties from time
to time statements and schedules further identifying and describing the
Collateral and each location thereof and such other reports in connection with
the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
3.9 Remedies. The Administrative Agent on behalf of the Secured
Parties shall have all the rights and remedies of a secured party under the UCC,
and shall be entitled to exercise any and all remedies available under this
Article 3 or Article 9 or otherwise available at law or in equity upon the
occurrence and during the continuance of an Event of Default. Except as
otherwise specifically provided herein, each Grantor hereby waives presentment,
demand, protest or any notice (to the maximum extent permitted by applicable
Law) of any kind in connection with this Agreement or any Collateral.
3.10 Standard of Care. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any of the
Collateral in its possession if it takes such action for that purpose as the
Borrower requests in writing, but the Administrative Agent's failure to comply
with any such request shall not of itself be deemed a failure to exercise
reasonable care, and no failure of the Administrative Agent to preserve or
protect any rights with respect to such Collateral against prior parties, or to
do any act with respect to the preservation of such Collateral not so requested
by the Borrower, shall be deemed a failure to exercise reasonable care in the
custody or preservation of such Collateral.
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3.11 Advances to Protect Collateral. All insurance expense and all
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral (including all rent payable by any Grantor to any
landlord of any premises where any of the Collateral may be located) and any and
all Taxes shall be borne and paid by the Borrower or such Restricted Subsidiary.
The Administrative Agent on behalf of the Secured Parties may (but shall not be
obligated to) make advances to preserve, protect or obtain any of the
Collateral, including advances to cure defaults under any of the Contracts or
advances to pay Taxes, insurance and the like, and all such advances shall
become part of the Obligations owing to the Lenders hereunder and shall be
payable to the Administrative Agent on demand, with interest thereon from the
date of such advance until paid at the Default Rate applicable to Base Rate
Loans in effect on the date of such advance.
3.12 License to Use. The Administrative Agent on behalf of the
Secured Parties is hereby granted a non-exclusive license or other right to use
without charge during the continuance of an Event of Default any Grantor's
labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks and advertising matter, or any tangible or intangible property
or rights of a similar nature of any Grantor as they pertain to the Collateral,
in advertising for sale and selling any Collateral, and during the continuance
of an Event of Default the rights of each Grantor under all licenses and all
franchise agreements shall inure to the benefit of the Administrative Agent on
behalf of the Secured Parties.
3.13 Benefit of the Liens. All Liens granted or contemplated hereby
shall be for the benefit of the Administrative Agent on behalf of the Secured
Parties, and all Proceeds or payments realized from the Collateral in accordance
herewith shall be applied to the Obligations in accordance with the terms
provided herein.
3.14 Release of Collateral. Upon any sale of assets permitted herein
and payment of the proceeds as required by Section 2.7, the Liens on such assets
granted by the Grantor to the Administrative Agent for the benefit of the
Secured Parties shall be released and the Administrative Agent shall, upon
request of the Borrower, execute and deliver to the Borrower appropriate
executed UCC-3s and other instruments of release as may be appropriate under the
circumstances, confirming such release.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby represents and warrants, jointly and severally,
to the Administrative Agent and each Lender, with respect to all Loan Parties,
as follows:
4.1 Organization and Qualification. Each Loan Party is duly
organized, validly existing and in good standing under the laws of its state of
organization. Each Loan Party is duly qualified to do business and in good
standing in each jurisdiction in which the failure to receive or retain such
qualification would have a Material Adverse Effect.
4.2 Authority and Authorization. Each Loan Party has all requisite
corporate or limited liability company right, power, authority and legal right
to carry on its business, to own or lease its properties and to execute and
deliver and perform its obligations under this Agreement, to make the borrowings
provided for herein, and to execute and deliver and to perform its obligations
under the Loan Documents. Each Loan Party's execution, delivery and performance
of the Loan Documents have been duly and validly authorized by all necessary
corporate or limited liability company proceedings on the part of each Loan
Party.
4.3 Execution and Binding Effect. This Agreement, the Notes and all
other Loan Documents have been or will be duly and validly executed and
delivered by each Loan Party, and constitute or, when executed and delivered,
will constitute, the legal, valid and binding obligations of such Loan Party
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enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws affecting creditors' rights generally and
by general principles of equity, including concepts of reasonableness,
materiality, good faith and fair dealing and the possible unavailability of
specific performance, injunctive relief or other equitable remedies, regardless
of whether enforceability is considered in a proceeding in equity or at law.
4.4 Governmental Authorizations. Except for the consents
identified on Schedule 4.4 (the "Required Consents"), no authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Governmental
Authority (other than the filing of financing statements and continuation
statements) is or will be necessary in connection with the execution and
delivery of this Agreement, the Notes or any other Loan Documents by each Loan
Party, consummation by each Loan Party of the transactions herein or therein
contemplated, including the Borrower's obtaining the Loan, the Guarantors'
guaranty of the Obligations and the Loan Parties' granting security for the
Obligations, performance of or compliance by each Loan Party with the terms and
conditions hereof or thereof or the legality, validity and enforceability hereof
or thereof.
4.5 Regulatory Authorizations. Each Loan Party holds all material
authorizations, permits and licenses required by the FCC, any PUC or any
Communications Law for the conduct of its business as now conducted and as
proposed in the Business Plan to be conducted, and all such Regulatory
Authorizations are in full force and effect and are subject to no pending
contest, challenge or appeal. No Lender, by reason of the execution, delivery
and performance (other than the enforcement of remedies) of any of the Loan
Documents, will be subject to the regulation or control of either the FCC or any
PUC. The Regulatory Authorizations are described on Schedule 4.5. The Loan
Parties are in compliance with all applicable Requirements of Law, except for
noncompliances that in the aggregate would not have a Material Adverse Effect.
4.6 Agreements and Other Documents. As of the date hereof, each
Loan Party has provided to the Lenders, accurate and complete copies (or
summaries) of all of the following agreements or documents to which such Loan
Party is subject and each of which is listed on Schedule 4.6: (a) supply
agreements and purchase agreements not terminable by such Loan Party within
sixty (60) days following written notice issued by such Loan Party and involving
transactions in excess of $1,000,000 per annum; (b) any lease of Equipment
having a remaining term of one year or longer and requiring aggregate rental and
other payments in excess of $500,000 per annum; (c) Permits held by such Loan
Party, except those the absence of which in the aggregate would not have a
Material Adverse Effect; (d) instruments or documents evidencing Indebtedness of
such Loan Party and any security interest granted by such Loan Party with
respect thereto; (e) instruments and agreements evidencing the issuance of any
equity securities, warrants, rights or options to purchase equity securities of
the Borrower or any Restricted Subsidiary; and (f) all material System
Agreements required for the build-out of the Networks contemplated by the
Business Plan. All such agreements are in full force and effect and are not
subject to termination because of default by a Loan Party or otherwise. Except
as set forth on Schedule 4.6, no material System Agreement or material Contract
to which the Borrower or any of its Subsidiaries is a party contains any
provision which provides that a change of control of the Borrower or any of its
Subsidiaries constitutes an unauthorized assignment thereof or gives the other
party a right of termination, and all material System Agreements are either
assignable or readily replaceable on substantially comparable terms.
4.7 Absence of Conflicts. The execution and delivery of this
Agreement, the Notes and the other Loan Documents, the consummation of the
transactions herein or therein contemplated and the performance of or compliance
with the terms and conditions hereof or thereof by each Loan Party will not (a)
violate any applicable Law; (b) conflict with or result in a breach of or a
default under the Organizational Documents of such Loan Party or any material
agreement or instrument to which such
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Loan Party is a party or by which such Loan Party or its properties are bound;
or (c) result in the creation or imposition of any Lien upon any property (now
owned or hereafter acquired) of such Loan Party except as otherwise contemplated
by this Agreement.
4.8 No Restrictions. No Loan Party is a party or subject to any
contract, agreement or restriction in its Organizational Documents that
materially and adversely affects its business or the use or ownership of any of
its properties or operation of its business as contemplated in the Business
Plan. No Loan Party is a party or subject to any contract or agreement which
restricts its right or ability to incur Indebtedness, other than as set forth on
Schedule 4.8, none of which prohibits any Loan Party's execution or performance
of its obligations under this Agreement, the Borrower's obtaining the Loan, the
Guarantors' guaranty of the Obligations and the Loan Parties' providing security
for the Obligations as provided herein. No Loan Party has agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise)
any of the Collateral, whether now owned or hereafter acquired, to be subject to
a Lien that is not a Permitted Encumbrance.
4.9 Government Contracts. Except as set forth in Schedule 4.9, as
of the date hereof, no Loan Party is a party to any contract or agreement with
any Governmental Authority and no Loan Party's Accounts are subject to the
Federal Assignment of Claims Act, as amended (31 U.S.C. ss. 3727) or any similar
state or local law.
4.10 Financial Statements; Business Plan. The Borrower has
furnished to the Lenders the most recent annual and quarterly Financial
Statements of Holdings, certified by a Responsible Officer of Holdings, as
described on Schedule 4.10. Such Financial Statements (including the notes
thereto) present fairly the financial condition of the Loan Parties on a
consolidated and consolidating basis as of the end of such fiscal period and the
results of its operations and the changes in its financial position for the
fiscal period then ended, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal period. As of the date hereof, no
Loan Party has any obligation or liability (absolute, contingent, liquidated or
unliquidated) material to the Loan Parties taken as a whole, except for those
reflected in the Financial Statements described on Schedule 4.10. Since the date
hereof, no Loan Party has incurred any such obligation or liability except as
permitted by this Agreement. The Projections delivered by the Borrower to the
Administrative Agent, on behalf of the Lenders, as part of the Business Plan, as
described on Schedule 4.10, a copy of which has been delivered prior to the date
hereof, were prepared in good faith, based on reasonable assumptions, it being
recognized by the Administrative Agent and the Lenders that such Projections as
to future events are not to be viewed as facts and that actual results during
the period covered by such Projections may differ from the projected results.
4.11 Financial Accounting Practices. Each Loan Party has made and
kept books, records and accounts which, in reasonable detail, accurately and
fairly reflect its respective transactions and dispositions of its assets and
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions are recorded as
necessary to permit preparation of Financial Statements in conformity with GAAP
and to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
4.12 Deposit and Disbursement Accounts. Schedule 4.12 lists all
banks and other financial institutions at which any Loan Party maintains
deposits and/or other accounts as of the date hereof, including any disbursement
accounts, and such Schedule correctly identifies the name, address and telephone
number of each such depository, the name in which the account is held, a
description of the purpose of the account and the complete account number.
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4.13 Insurance. Schedule 4.13 lists all insurance policies of any
nature maintained, as of the date hereof, for current occurrences by any Loan
Party, as well as a summary of the terms of each such policy.
4.14 Accurate and Complete Disclosure. No representation or warranty
made by or on behalf of any Loan Party in this Agreement or any other Loan
Document and no statement made by or on behalf of any Loan Party in any
Financial Statement, certificate, report, exhibit or document furnished by such
Loan Party to the Administrative Agent pursuant to or in connection with this
Agreement (including any filings with the Securities and Exchange Commission,
the FCC or any PUC) is or was false or misleading as of the date made in any
material respect (including by omission of material information necessary to
make such representation, warranty or statement not misleading). There are no
facts known (or which should upon the exercise of reasonable diligence be known)
to any Loan Party that, individually or in the aggregate, would have any
reasonable likelihood of resulting in or causing a Material Adverse Change which
have not been set forth in the Financial Statements referred to in Section 4.10
or otherwise disclosed in writing to the Administrative Agent and the Lenders
prior to the date hereof.
4.15 No Event of Default; Compliance with Material Agreements. No
event has occurred and is continuing and no condition exists which constitutes a
Default or an Event of Default. No Loan Party is in violation of any term of any
material agreement or instrument to which it is a party or by which it or its
properties are bound, except for such violations that in the aggregate would not
have a Material Adverse Effect.
4.16 Labor Matters. (a) No strikes or other material labor disputes
against any Loan Party are pending or, to any Loan Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Loan Party
comply in all material respects with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matter; (c) all material
payments due from any Loan Party for employee health and welfare insurance have
been paid or accrued as a liability on the books of such Loan Party; (d) except
as set forth in Schedule 4.16, no Loan Party is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement or
any employment agreement (and true and complete copies of any agreements
described on Schedule 4.16 have been delivered to the Administrative Agent and
each Lender); (e) there is no organizing activity involving any Loan Party
pending or, to any Loan Party's knowledge, threatened by any labor union or
group of employees; (f) there are no representation proceedings pending or, to
any Loan Party's knowledge, threatened with the National Labor Relations Board,
and no labor organization or group of employees of any Loan Party has made a
pending demand for recognition; and (g) except as set forth in Schedule 4.16,
there are no complaints or charges against any Loan Party pending or, to the
knowledge of the Responsible Officers of Holdings, threatened to be filed with
any Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Loan Party of any individual which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
4.17 Litigation. Except as set forth in Schedule 4.17, there is no
pending action, suit or proceeding by or before any Governmental Authority that
is pending or to the knowledge of any Loan Party is threatened against or
affecting any Loan Party or any of its properties, rights or licenses which if
adversely decided would have a Material Adverse Effect.
4.18 Rights to Property. The Loan Parties have good and legal title,
subject only to the Permitted Encumbrances, to the Collateral, all other
personal and real property purported to be owned by them and all property
reflected in the most recent balance sheet referred to in Section 4.10 (except
as sold or otherwise disposed of in the ordinary course of business or as no
longer used or useful in the conduct of the business). Schedule 4.18 lists or
describes (i) all Sites and Site Leases as of the date hereof, (ii) all
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other real property owned by each Loan Party as of the date hereof, and (iii)
all material Equipment of each Loan Party as of March 31, 1999 and its location
or proposed location. Each Loan Party has, or by the First Borrowing Date shall
have, entered into the Site Leases described on Schedule 4.18. Such Site Leases
are in full force and effect and are not subject to termination because of
default or otherwise.
4.19 Year 2000 Issue. Each Loan Party has a plan and organization in
place to minimize any Material Adverse Effect caused by the failure of any
system or Equipment which is material to such Loan Party's operations to be Year
2000 Compliant. "Year 2000 Compliant" means that such system or Equipment will
process date data from, into and between the calendar year 1999 and the calendar
year 2000, including leap year calculations, with substantially the same
functionality as such system or Equipment processes date data falling on or
before December 31, 1999 and that, when used in accordance with such system's or
Equipment's normal operation specifications, and provided all systems and
equipment of others used in combination with such system or Equipment properly
exchange data with such system or Equipment, such system or Equipment will
accept, store, retrieve, calculate, compare and otherwise process date data
before and after January 1, 2000. Each Loan Party is conscientiously
implementing such plan. Each Loan Party will, upon request from the
Administrative Agent, on behalf of the Lenders, or from the Requisite Lenders,
provide the Administrative Agent or, if so requested, the Lenders with periodic
updates on its implementation of such plan.
4.20 Taxes. Each Loan Party's federal tax identification number is
set forth on Schedule 1. All federal and state income tax returns and all other
material Tax returns required to be filed by each Loan Party have been properly
prepared, executed and filed, and all Taxes upon such Loan Party or upon any of
its respective properties, incomes, sales or franchises which are shown to be
due and payable thereon have been paid, other than Taxes or assessments the
validity or amount of which such Loan Party is contesting in good faith. The
reserves and provisions for Taxes on the books of each Loan Party are adequate
for all open years and for its current fiscal period.
4.21 No Material Adverse Change. Since the date of the Financial
Statements referenced in Section 4.10 there has been no Material Adverse Change.
4.22 Solvency. Both before and after giving effect to (a) the
Advances to be made or extended on the date hereof or such other date as the
Advances requested hereunder are made or extended, (b) the disbursement of the
proceeds of such Advances and (c) the payment and accrual of all transaction
costs in connection with the foregoing, the Loan Parties, taken as a whole, are
Solvent.
4.23 No Regulatory Event. To the knowledge of any Loan Party, no
Regulatory Event has occurred and is continuing.
4.24 Trade Relations. There exists no actual or, to the knowledge of
any Loan Party, threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any Loan Party and
any customer or supplier that would have a Material Adverse Effect or prevent
the Loan Parties from conducting their business after the consummation of the
financing contemplated by this Agreement in substantially the same manner as is
contemplated in the Business Plan.
4.25 No Brokerage Fees. No Loan Party has agreed to pay any
brokerage or other fee, commission or compensation to any Person in connection
with the Loan to be made hereunder except the Fees as contemplated herein.
4.26 Margin Stock; Regulation U. No Loan Party is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin
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stock. The making of the Advances and the use of the proceeds thereof will not
violate Regulation U or X of the Board of Governors of the Federal Reserve
System.
4.27 Investment Company; Public Utility Holding Company. No Loan
Party is an "investment company" or a "company controlled by an investment
company" or an "affiliated person" or "promoter" or "principal underwriter" for,
an "investment company," within the meaning of the Investment Company Act of
1940, as amended, or a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
4.28 Personal Holding Company; Subchapter S. No Loan Party is a
"personal holding company" as defined in Section 542 of the Code, or a
"Subchapter S" corporation within the meaning of the Code.
4.29 Securities Act, Etc. The issuance of the Notes to the Lenders
under the circumstances contemplated by this Agreement is not required to be
registered under the Securities Act of 1933, as amended, or under the securities
laws of any state.
4.30 ERISA. (i) With respect to any Plan, no Reportable Event has
occurred which may reasonably result in any material liability to the PBGC with
respect to any Plan, (ii) no Plan has been terminated, (iii) no trustee has been
appointed by any United States District Court to administer any Plan, (iv) the
PBGC has not instituted proceedings to terminate any Plan or to appoint a
trustee to administer any such Plan, (v) no Loan Party or Affiliate of a Loan
Party has withdrawn, completely or partially, from any Plan, (vi) no Loan Party
or Affiliate of a Loan Party has incurred secondary liability for withdrawal
liability payments under any Plan and (vii) no Loan Party is subject to any
liability (contingent or otherwise) with respect to any Plan that would have a
Material Adverse Effect.
4.31 Intellectual Property. Each Loan Party owns or possesses the
right to use all patents, trademarks, service marks, trade names, copyrights,
know-how, franchises, Software and Software Licenses necessary for the operation
of its business, without any known conflict with the valid rights of others
which would have a Material Adverse Effect. All such material rights are
described on Schedule 4.31.
4.32 Environmental Warranties. To the best of Holdings' knowledge,
each Loan Party is in compliance with all Environmental Laws applicable to such
Loan Party or its business or to the real or personal property owned, leased or
operated by such Loan Party, except for such non-compliances which would not
result in any Loan Party incurring Environmental Liabilities that in the
aggregate would have a Material Adverse Effect. No Loan Party has received
notice of, or is aware of, any violation or alleged violation, or any liability
or asserted liability, under any Environmental Law, with respect to such Loan
Party or its business or its premises. The only premises occupied by any Loan
Party are Sites where Equipment is located and office spaces in commercial
office buildings. Schedule 4.32 lists all environmental or health and safety
assessments, investigations, analyses, testing or sampling results with respect
to the operations of any Loan Party or any real property owned, operated or
leased by any Loan Party that is in such Loan Party's possession, custody or
control.
4.33 Security Interests. The provisions of Article 3 are effective
to create in favor of the Administrative Agent, on behalf of the Secured
Parties, a legal, valid and enforceable Lien on or security interest in all of
the Collateral, and, when the recordings and filings described on Schedule 4.33
have been effected in the public offices listed on said Schedule 4.33, this
Agreement will create a perfected first priority security interest in all right,
title, estate and interest of each Loan Party in the Collateral which may be
perfected by filing, subject to no Liens except Permitted Encumbrances and no
prior Liens except
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for the Liens set forth on Schedule 8.2 and Equipment acquired pursuant to
Capital Leases permitted hereunder. The recordings and filings shown on said
Schedule 4.33 are all the actions necessary or advisable in order to establish,
protect and perfect the interest of the Administrative Agent, on behalf of the
Secured Parties, in the Collateral.
4.34 Place of Business. The chief executive office of each Loan
Party is identified on Schedule 4.34. Each Loan Party's principal place of
business in the state(s) where a Site is located is identified on Schedule 4.34.
Each Loan Party's records concerning the Collateral are kept at one or both of
these addresses.
4.35 Location of Collateral. The Collateral is and will be kept at
the locations identified by Loan Party and type of Collateral on Schedule 4.35
or such other locations as may be permitted under Section 8.4.
4.36 Material Contracts and Accounts. Each Contract, General
Intangible and Account is, or will be when it is created, a bona fide, valid and
legally enforceable property or right of a Loan Party and, so far as any Loan
Party knows, of any other party thereto, except for those that do not, in the
aggregate, materially and adversely affect the value of the Collateral. No
amount payable under or in connection with any of such Contracts, General
Intangibles or Accounts are evidenced by any chattel paper or any promissory
notes or other instruments that have not been delivered to the Administrative
Agent on behalf of the Secured Parties.
4.37 No Defaults Under Contracts or Accounts. With respect to each
Contract, Account and General Intangible, no default by any Loan Party or event
which with the giving of notice or the passage of time would be a default has
occurred and, to the knowledge of the Responsible Officers of Holdings, the
other party or parties thereto are not in default thereunder, except for
defaults that in the aggregate would not have a Material Adverse Effect, and
each Loan Party has fully and timely performed all its material obligations
thereunder. The right, title and interest of such Loan Party thereunder is not
subject to any defense, set off, counterclaim or claim, and none of the
foregoing been asserted or alleged against such Loan Party except in respect of
such defaults, defenses, set offs, counterclaims and claims that in the
aggregate do not materially adversely affect the value of the Collateral. The
amount represented by each Loan Party to the Administrative Agent, on behalf of
the Lenders, from time to time as owing on any or all Accounts, Contracts or
General Intangibles, will at such time be the correct amount actually owing by
such account debtors thereunder.
4.38 Corporate Structure. The Borrower is wholly-owned by Holdings.
The Subsidiary Guarantors are wholly-owned by the Borrower. The Subsidiary
Guarantors have no Subsidiaries nor any current plans to form or acquire any
Subsidiary.
4.39 Security. This Agreement is effective to grant to the
Administrative Agent, on behalf of the Secured Parties, a legal, valid and
enforceable security interest in 100% of the Stock of the Borrower and 100% of
the Stock of all Restricted Subsidiaries.
4.40 Assumed Names. Except as set forth on Schedule 4.40, no Loan
Party conducts business under any assumed names or trade names, or has conducted
business under any other names, or any assumed names or trade names, at any time
prior to the date hereof.
4.41 Transactions with Affiliates. No Affiliate and no officer or
director of any Loan Party or any individual related by blood, marriage,
adoption or otherwise to any such Affiliate, officer or director, or any Person
in which any such Affiliate, officer, director or individual related thereto
owns any material beneficial interest, is a party to any material agreement,
contract, commitment or transaction with such
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Loan Party or has any material interest in any material property used by such
Loan Party, except as set forth on Schedule 4.41.
4.42 Lucent Agreement. The Administrative Agent has been provided
with a copy of the Lucent Agreement.
4.43 Equipment Orders. The Borrower has issued purchase orders for
Equipment, Software and services to be purchased from Lucent under the Lucent
Agreement for Ten Million Dollars ($10,000,000) of Equipment, Software and
services ordered subsequent to March 17, 1999 and delivered to the Borrower by
March 31, 1999.
ARTICLE 5: CONDITIONS TO FIRST BORROWING DATE
On the First Borrowing Date, the following conditions shall have been
satisfied:
5.1 Closing Certificates. The Administrative Agent and each Lender
shall have received the following certificates, all in form and substance
reasonably satisfactory to the Administrative Agent and all dated the First
Borrowing Date upon which the Administrative Agent may conclusively rely unless
and until later certificates have been furnished to the Administrative Agent and
each Lender: (a) a certificate of each Loan Party signed by a duly authorized
Responsible Officer, certifying as to (i) true copies of Organizational
Documents of such Loan Party in effect on such date; (ii) true copies of all
limited liability company action taken by such Loan Party relative to this
Agreement, the Notes and the other Loan Documents (including a resolution of its
Board of Directors authorizing the execution and delivery of the Loan Documents,
the incurrence of the Obligations and the granting of the Liens contemplated
hereby to the extent required pursuant to the Organizational Documents
applicable thereto) which have been properly adopted and have not been modified
or amended; and (iii) the names, true signatures and incumbency of the
Responsible Officers of such Loan Party authorized to execute and deliver this
Agreement, the Notes and the other Loan Documents; (b) except as set forth on
Schedule 5.1 hereto, a Certificate of Good Standing (or equivalent certificate)
for such Loan Party, duly issued by the Secretary of State of the State of
organization of such Loan Party and of each other state in which such Loan Party
does business; and (c) a certificate as to such other matters as the
Administrative Agent or any Lender shall reasonably request.
5.2 Opinions of Counsel. The Administrative Agent and each Lender
shall have received the following opinions, all dated the First Borrowing Date
and all in form and substance satisfactory to the Administrative Agent and each
Lender:
(a) a written opinion of counsel to each Loan Party,
substantially in the form of Exhibit D, as to such matters as shall be required
by the Administrative Agent, any Lender or their respective counsel, including
the corporate good standing of such Loan Party, the proper adoption of any
corporate resolution required hereby, the authority of the Person signing for
such Loan Party, the validity, binding nature and enforceability of this
Agreement and the other Loan Documents and the validity and perfection of all
Liens granted by the Loan Documents to the Administrative Agent on behalf of the
Secured Parties by such Loan Party in the Collateral; and
(b) a written opinion of regulatory counsel for Loan Parties,
substantially in the form of Exhibit E, as to such matters as shall be required
by the Administrative Agent and its counsel, including the validity of each Loan
Party's Regulatory Authorizations and Permits.
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5.3 Closing Documents. The Administrative Agent and the Lenders
shall have received the following documents, all in form and substance
reasonably satisfactory to the Administrative Agent, the Lenders and their
respective counsel:
(a) Agreement. This Agreement, duly executed by all Loan
Parties;
(b) Notes. The Notes, duly executed by the Borrower, payable
to the order of each Lender;
(c) Financing Statements. All UCC-1 financing statements
necessary to perfect the Liens granted hereby, each duly executed by each Loan
Party, and duly recorded in all the offices identified on Schedule 4.33;
(d) Interconnection Agreements. A summary of all
interconnection agreements to which any Loan Party is a party;
(e) Lucent Agreement. A copy of the duly executed Lucent
Agreement;
(f) Insurance. Policies and certificates of insurance required
by Section 7.7, accompanied by evidence of the payment of the premiums therefor;
(g) Financial Statements. The Financial Statements described on
Schedule 4.10;
(h) Balance Sheet. An unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of a date no earlier than sixty (60) days prior
to the Closing Date, certified by a Responsible Officer as fairly presenting the
financial condition of Holdings, evidencing liabilities not materially in excess
of liabilities projected as of the Closing Date in the Projections;
(i) Asset Locations. A detailed description of all material
assets of each Loan Party by location;
(j) Required Consents. Evidence satisfactory to the
Administrative Agent of each Loan Party's having obtained the Required Consents;
(k) Fees. The Fees required to be paid on the First Borrowing
Date as specified in Section 2.15 (including the Fees specified in the GECC Fee
Letter);
(l) Pre-Closing Lien Searches. Lien searches from all
jurisdictions reasonably determined by the Administrative Agent or any Lender to
be appropriate, as of a date reasonably close to the First Borrowing Date, with
respect to each Loan Party (under their present names and any previous names),
reflecting no other Liens (other than Permitted Encumbrances) on any of the
Collateral; and
(m) Landlord Consents. Such Landlord Consents as the
Administrative Agent shall have requested.
5.4 No Material Adverse Change. As of the First Borrowing Date,
after giving effect to any Advances, there shall not have been (i) since
December 31, 1998, any Material Adverse Change; (ii) any litigation commenced
which, if successful, would have a Material Adverse Effect or which would
challenge the financing contemplated by this Agreement, except the litigation
listed on Schedule 4.17 and (iii) since December 31, 1998, any material increase
in the liabilities, liquidated or contingent, of Holdings and its Subsidiaries
or a material decrease in the assets of Holdings and its Subsidiaries, taken
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as a whole (except for a proposed increase from $200,000,000 to $300,000,000 in
principal amount of outstanding Company Notes).
ARTICLE 6: CONDITIONS OF LENDING
6.1 Conditions to Each Borrowing Date. The obligation of any Lender
to fund any Advance or convert or continue any portion of the Loan as a LIBOR
Loan is subject to each Loan Party's performance of its obligations hereunder
and satisfaction of the following further conditions on the Borrowing Date for
any such Advance (including the First Borrowing Date) or the date of such
conversion or continuation:
(a) Borrowing Certificate. The Administrative Agent shall have
received a duly executed Borrowing Certificate in the form of Exhibit B or
Notice of Conversion/Continuation in the form of Exhibit C, as applicable.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing or would exist upon the
consummation of the transactions to occur on such Borrowing Date.
(c) Representations and Warranties. The representations and
warranties contained in Article 4 shall be true and correct on and as of such
date to the same extent as though made on and as of the date, except to the
extent such representations and warranties relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date, both before and after giving
effect thereto.
(d) Lucent Agreement. The Loan Parties shall have complied in
all material respects with the Lucent Agreement.
(e) No Regulatory Event. No Regulatory Event (in the Requisite
Lenders' reasonable determination) shall have occurred and be continuing or
would exist upon the consummation of transactions to occur on such Borrowing
Date.
(f) Expenses. All closing costs and Administrative Agent's and
Lenders' other expenses payable by the Borrower under the terms of any Loan
Document shall have been paid in full (or shall be paid first from such Advance
as provided in Section 2.10).
(g) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance reasonably satisfactory to the
Administrative Agent, as the Administrative Agent may from time to time request.
(h) Business Plan. The Business Plan shall continue to reflect
that Holdings has sufficient funding, including the Loan, to completely finance
all costs to build-out the Networks contemplated by the Business Plan and to
fund anticipated operating losses, debt service and ongoing capital
requirements.
6.2 Post-Closing Items. The post-closing items described on
Schedule 6.2 shall have been completed in the time permitted, and each Loan
Party shall have provided the Administrative Agent and the Requisite Lenders
with satisfactory evidence thereof pursuant to Section 7.29.
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6.3 Affirmation of Representations and Warranties. Any Borrowing
Certificate or other request for any Advance hereunder shall constitute a
representation and warranty that (a) the representations and warranties
contained in Article 4 are true and correct on and as of the date of such
request with the same effect as though made on and as of the date of such
request, except to the extent such representations and warranties relate to an
earlier date, in which case that such representations and warranties were true
and correct on and as of such earlier date, and (b) on the date of such request
no Default or Event of Default has occurred and is continuing or exists or will
occur or exist after giving effect to such Advance (for this purpose such
Advance being deemed to have been made or issued, as the case may be, on the
date of such request). Failure of the Administrative Agent to receive notice
from each Loan Party to the contrary before the applicable Borrowing Date shall
constitute a further representation and warranty by such Loan Party that (x) the
representations and warranties of such Loan Party contained in the first
sentence of this Section 6.2 are true and correct on and as of such Borrowing
Date with the same effect as though made on and as of such Borrowing Date,
except to the extent such representations and warranties relate to an earlier
date, in which case that such representations and warranties were true and
correct on and as of such earlier date, (y) on such Borrowing Date, no Default
or Event of Default has occurred and is continuing or exists or will occur or
exist after giving effect to such Advance or issuance and (z) on such Borrowing
Date, all conditions set forth in this Article 6 have been satisfied.
6.4 Deadline for Funding Conditions. No Lender shall have any
obligation to make any Advances hereunder if all of the conditions set forth in
Article 5 and in Article 6 have not been fully satisfied or waived by the
Requisite Lenders and the first Advance made hereunder, within the period of
twenty-four (24) calendar months following the date hereof.
ARTICLE 7: AFFIRMATIVE COVENANTS
The Loan Parties hereby jointly and severally agree that from and after
the date hereof until the Termination Date, the Loan Parties will keep and
perform fully each and all of the following covenants:
7.1 Reporting and Information Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any
event within ninety (90) days after the close of each Fiscal Year of Holdings,
the Borrower shall furnish or cause to be furnished to the Administrative Agent
and the Lenders audited consolidated and unaudited consolidating statements of
income, statements of cash flow and retained earnings of Holdings and its
Subsidiaries for such Fiscal Year and consolidated and consolidating balance
sheet as of the close of such Fiscal Year, and notes to each, all in reasonable
detail, and setting forth in comparative form (i) the corresponding figures for
the preceding Fiscal Year and (ii) the actual and projected figures from the
most recently ended Fiscal Year, with such consolidated statements and balance
sheet (exclusive of the Projections) to be certified without qualification by
independent certified public accountants of recognized regional or national
standing selected by the Borrower and reasonably satisfactory to the
Administrative Agent.
(b) Quarterly Reports. Within forty-five (45) days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, the Borrower
shall furnish to the Administrative Agent and the Lenders (i) unaudited
consolidated and consolidating statements of income, statements of cash flow and
retained earnings for Holdings and its Subsidiaries for such quarter and for the
period from the beginning of Holdings' then current Fiscal Year to the end of
such quarter, and an unaudited consolidated and consolidating balance sheet of
the Loan Parties as of the end of such quarter, all in reasonable detail and
certified by a Responsible Officer of the Borrower as presenting fairly the
financial position of the Loan Parties as of the end of such quarter and the
results of their operations and the changes in their financial position for such
quarter, in conformity with GAAP (except for accompanying notes thereto),
subject to
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year-end audit adjustments, (ii) setting forth in comparative form the
corresponding figures for the corresponding quarter of the preceding Fiscal Year
and the projected figures for the corresponding quarter, (iii) updates of
revenues, gross margin and EBITDA of Holdings on a consolidating basis for the
Fiscal Year to date and (iv) upon request of the Administrative Agent, an aging
of accounts payable and accounts receivable.
(c) Compliance Certificates. Within forty-five (45) days after
the end of each of the first three Fiscal Quarters of each Fiscal year, the
Borrower shall deliver to the Administrative Agent and the Lenders a certificate
dated as of the end of such Fiscal Quarter, signed by a Responsible Officer of
the Borrower (i) stating that as of the date thereof no Event of Default has
occurred and is continuing or exists, or if an Event of Default has occurred and
is continuing or exists, specifying in detail the nature and period of existence
thereof and any action with respect thereto taken or contemplated to be taken by
the applicable Loan Party; (ii) stating that the signer has personally reviewed
this Agreement and that such certificate is based on an examination made by or
under the supervision of the signer sufficient to assure that such certificate
is accurate; and (iii) calculating and certifying the Loan Parties' compliance
with the financial covenants set forth on Schedule 7.17.
(d) Accountants' Certificate. Each set of year-end audited
consolidated Financial Statements and balance sheet delivered pursuant to
Subsection 7.1(a) shall be accompanied by a certificate or report dated the date
of such statement and balance sheet by the accountants who certified such
statements and balance sheet stating in substance that they have reviewed this
Agreement and that in making the examination necessary for their certification
of such statements and balance sheet they did not become aware of any Event of
Default or, if they did become so aware, such certificate or report shall state
the nature and period of existence thereof.
(e) Projections. If requested by the Administrative Agent, the
Borrower shall deliver to the Administrative Agent and the Lenders (i) within
thirty (30) days after the beginning of each calendar year, quarterly
projections of its anticipated income, expenses, cash flow, assets and
liabilities for the next five (5) calendar years or, if sooner, through the
calendar year in which the Maturity Date occurs and (ii) quarterly updates for
the first four (4) full Fiscal Years following the Closing Date if the Borrower
and Holdings are not meeting or exceeding the Projections, prepared in good
faith on assumptions believed by Holdings to be reasonable and in a manner and
format consistent with other Financial Statements provided by the Borrower to
the Administrative Agent and the Lenders.
(f) Other Reports and Information. Upon the request of the
Administrative Agent, the Borrower shall deliver to the Administrative Agent and
the Lenders copies of (i) all regular or special reports or effective
registration statements which any Loan Party shall file with Governmental
Authorities, the FCC or any PUC (or any successor thereto) or any securities
exchange, (ii) financial statements, material reports, and other information
distributed by any Loan Party to its creditors or the financial community in
general, and (iii) all press releases issued by any Loan Party.
(g) Further Information. Each Loan Party will promptly furnish
to the Administrative Agent or any Lender such other information (including any
report by independent auditors) as the Administrative Agent or any Lender may
reasonably request.
7.2 Other Notices. Promptly upon a Responsible Officer of any Loan
Party becoming aware of any of the following, the Borrower shall give the
Administrative Agent and each Lender notice thereof, together with a written
statement of a Responsible Officer of the Borrower setting forth the details
thereof and any action with respect thereto taken or contemplated to be taken by
such Loan Party:
(a) a Default or Event of Default;
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(b) any Material Adverse Change;
(c) any event or circumstance that could reasonably be
expected to cause or result in a Material Adverse Change;
(d) any event that has a reasonable likelihood of constituting
or resulting in a Regulatory Event;
(e) the commencement, existence or threat of any proceeding by
or before any Governmental Authority against such Loan Party which, if adversely
decided, would have a Material Adverse Effect;
(f) such Loan Party's discovery of any fact, circumstance or
condition that could result in any Loan Party incurring Environmental
Liabilities or receipt of any notice of or other written communication alleging
the violation of, or liability under, any Environmental Law affecting such Loan
Party or any of its properties, which individually or in the aggregate with all
such other violations and liabilities, would have a Material Adverse Effect; or
(g) any Change of Control.
7.3 Notice of Pension-Related Events. Each Loan Party shall
promptly furnish the Administrative Agent with written notice upon the receipt
by such Loan Party or the administrator of any Plan of any notice,
correspondence or other communication from the PBGC, the IRS, the Secretary of
Treasury, the Department of Labor, or any other Person, as the case may be,
relating to (i) any Reportable Event, (ii) any funding deficiency with respect
to any Plan, (iii) any liability, either primary or secondary, with respect to
complete or partial withdrawal from any Plan, (iv) proceedings to terminate any
Plan or (v) the appointment of a trustee for any Plan that would have a Material
Adverse Effect. Such notice shall be accompanied by any pertinent documents
including the relevant notice, correspondence or other communication and a
statement of a Responsible Officer of such Loan Party describing the event or
the action taken and the reasons therefor.
7.4 Financial Accounting Practices. Each Loan Party shall make and
keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of its assets and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorization, (b) transactions are recorded as necessary
(i) to permit preparation of financial statements in conformity with GAAP and
(ii) to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
7.5 Preservation of Corporate Existence and Qualification. Each
Loan Party shall maintain its existence, good standing and rights in full force
and effect in its jurisdiction of organization. Each Loan Party shall qualify to
do business and remain qualified and in good standing and shall obtain all
necessary authorizations to do business in each jurisdiction in which failure to
receive or retain such would have a Material Adverse Effect.
7.6 Continuation of Business. The Loan Parties shall continue to
engage solely in the Telecommunications Business and shall acquire and maintain
in full force and effect all material rights, privileges, franchises and
licenses necessary therefor (including any license or authorization required by
the FCC or any PUC). The Loan Parties shall maintain in force and renew, as
necessary, all material
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Right-of-Way Agreements and shall obtain such consents of other parties to any
Right-of-Way Agreement as the Administrative Agent on behalf of the Secured
Parties shall deem necessary to protect its Lien on and access to the Network,
the Collateral and the Right-of-Way.
7.7 Insurance.
(a) The Loan Parties shall, at their sole cost and expense,
provide and maintain or cause to be maintained at all times insurance in such
forms and covering such risks and hazards and in such amounts and with an
insurance corporation with a Best rating of "A" or above, licensed to do
business in the states where any Network or Loan Party is located, as shown on
Schedule 7.7 and otherwise as may be required by the Security Documents. If any
Loan Party at any time or times hereafter shall fail to obtain or maintain any
of the policies of insurance required above or to pay all premiums relating
thereto, the Administrative Agent may at any time or times thereafter obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Administrative Agent deems advisable. The
Administrative Agent shall have no obligation to obtain insurance for any Loan
Party or pay any premiums therefor. By doing so, the Administrative Agent shall
not be deemed to have waived any Default or Event of Default arising from any
Loan Party's failure to maintain such insurance or pay any premiums therefor.
All sums so disbursed, including reasonable attorneys' fees, court costs and
other charges related thereto, shall be payable on demand by the Loan Parties to
the Administrative Agent and shall be additional Obligations hereunder secured
by the Collateral.
(b) The Administrative Agent reserves the right at any time
upon any material change in any Loan Party's risk profile (including any change
in the business conducted by any Loan Party or any Laws affecting the potential
liability of such Loan Party) to require additional forms and limits of
insurance to, in the Administrative Agent's reasonable opinion, adequately
protect both the Administrative Agent's and the Lenders' interests in all or any
portion of the Collateral and to ensure that each Loan Party is protected by
insurance in amounts and with coverage customary for its industry. If requested
by the Administrative Agent, which request shall not be made more frequently
than once in any calendar year, each Loan Party shall deliver to the
Administrative Agent from time to time a report of a reputable insurance broker,
satisfactory to the Administrative Agent, with respect to its insurance
policies.
(c) Each Loan Party shall cause (i) all general liability and
automobile insurance policies to name the Administrative Agent on behalf of the
Secured Parties as an additional insured, (ii) all physical damage insurance
policies to contain a Lender's or mortgagee's loss payable provision acceptable
to the Administrative Agent which acceptance shall not be unreasonably withheld,
(iii) all insurance policies to provide that no assignment, cancellation,
material modification, reduction in amount or adverse change in coverage thereof
shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof, (iv) all insurance policies to
insure the interests of the Administrative Agent on behalf of the Secured
Parties regardless of any breach of or violation by such Loan Party of any
warranties, declarations or conditions contained therein and (v) all insurance
policies to provide that the Administrative Agent and the Lenders shall have no
obligation or liability for premiums, commissions, assessments or calls in
connection with such insurance. The Administrative Agent shall be under no
obligation to verify the adequacy or existence of any insurance coverage. Each
Loan Party shall furnish the Administrative Agent copies of, or acceptable
certificates with respect to, all such policies prior to the date hereof, and
shall provide to the Administrative Agent, at least thirty (30) days prior to
each policy expiration date, evidence of the insurance being maintained by such
Loan Party in compliance with this Subsection 7.7(c). Certificates for insurance
required under clause (i) above shall be in ACORD Form 25S (attached to Schedule
7.7), and all certificates shall be acceptable in form and substance to the
Administrative Agent, which acceptance shall not be unreasonably withheld.
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(d) If any of the Collateral is partially or totally damaged
or destroyed, the Borrower shall give prompt notice to the Administrative Agent,
and all insurance proceeds, less the costs of collection thereof, shall be paid
to or retained by the Administrative Agent. Settlements, adjustments or
compromises of any claims for loss, damage or destruction to the Collateral
shall be made jointly by the Borrower and the Administrative Agent so long as no
Event of Default has occurred and is continuing, and otherwise shall be made
solely by the Administrative Agent. Each Loan Party hereby authorizes and
directs any affected insurance company to pay such proceeds directly to the
Administrative Agent, and to rely on the Administrative Agent's statement as to
whether an Event of Default has occurred. The Loan Parties shall pay all
reasonable out-of-pocket costs of collection of insurance proceeds payable on
account of such damage or destruction. If no Event of Default has occurred and
is continuing on the date any Network is partially or totally damaged or
destroyed, the Administrative Agent shall make available to the Borrower the
proceeds of any physical damage insurance actually paid to the Administrative
Agent in respect of such damage or destruction of any of the Collateral (after
deducting therefrom any sums retained by the Administrative Agent in
reimbursement for costs of collection) to pay the cost of restoration, and the
Borrower shall proceed promptly with the work of restoration of the Collateral
and shall pursue the work of restoration diligently to completion. If any Event
of Default has occurred and is continuing either on the date of such damage or
destruction or on the date such insurance proceeds are paid, or if any Event of
Default shall occur prior to completion of such work of restoration, then the
Administrative Agent, at its option, may apply such insurance proceeds in
payment of any of the Obligations, in such order as set forth in Section 2.10.
Any insurance proceeds remaining after completion of work or restoration shall,
at the Administrative Agent's election, be applied in accordance with Section
2.10, or paid over to the Borrower. Upon completion of any restoration, the
Borrower shall deliver to the Administrative Agent a certificate stating that
the restoration has been duly completed and accounting for the use of any
insurance proceeds in such restoration.
7.8 Indemnity.
(a) Each Loan Party that is a signatory hereto shall jointly
and severally indemnify and hold harmless each of the Administrative Agent, the
Lenders and their respective Affiliates, and each such Person's respective
officers, directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of the
execution and delivery of the Loan Documents, credit having been extended under
this Agreement and the other Loan Documents and the administration of such
credit, and in connection with or arising out of the transactions contemplated
hereunder and thereunder, including any and all Environmental Liabilities and
legal costs and expenses arising out of or incurred in connection with the
enforcement of any of the Loan Documents (collectively, "Indemnified
Liabilities"); provided, however, that no such Loan Party shall be liable for
any indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person's gross negligence or willful misconduct or material and
knowing breach of its obligations under this Agreement. NO INDEMNIFIED PERSON
SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
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Promptly after receipt by an Indemnified Person of notice of the
commencement of any investigative, administrative or judicial proceeding in
respect of which a claim for indemnification is to be made against a Loan Party
hereunder (any such proceeding being an "Indemnified Proceeding"), such
Indemnified Person will notify the Loan Parties in writing of the commencement
thereof; provided, that (a) the omission to so notify the Loan Parties will not
relieve the Loan Parties from any liability which they may have to any
Indemnified Person except to the extent that the Loan Parties have been
materially prejudiced by such failure to give notice and (b) the omission to so
notify the Loan Parties will not relieve the Loan Parties from any liability
that they may have to any Indemnified Person otherwise than on account of the
indemnity provided for in this Section 7.8.
(b) To induce the Lenders to provide the LIBOR Rate option on
the terms provided in Section 2.8, if (i) any LIBOR Loans are repaid in whole or
in part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other Loan
Document or is the result of acceleration, by operation of law or otherwise);
(ii) the Borrower shall default in payment when due of the principal amount of
or interest on any LIBOR Loan; (iii) the Borrower shall default in making any
borrowing of, conversion into or continuation of LIBOR Loans after the Borrower
has given notice requesting the same in accordance herewith; or (iv) the
Borrower shall fail to make any prepayment of a LIBOR Loan after the Borrower
has given a notice thereof in accordance herewith, the Borrower shall indemnify
and hold harmless each Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing. Such indemnification shall
include any loss (excluding loss of margin) or expense incurred by such Lender
in connection with the reemployment of such funds or the termination of deposits
from which such funds were obtained. For the purpose of calculating amounts
payable to the Lender under this subsection, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit which
bears interest at the LIBOR Rate in an amount equal to the amount of that LIBOR
Loan and having a maturity comparable to the relevant LIBOR Period; provided,
however, that each Lender may fund each of its LIBOR Loans in any manner it sees
fit, and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this subsection. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder. As promptly as practicable under the circumstances, each
Lender shall provide the Borrower with its written calculation of all amounts
payable pursuant to this Subsection 7.8(b), and such calculation shall be
presumed correct (absent manifest error) and shall be binding on the parties
hereto unless the Borrower shall object in writing within thirty (30) Business
Days of receipt thereof, specifying the basis for such objection in detail.
7.9 Access. Each Loan Party shall upon reasonable notice permit such
persons as the Administrative Agent or any Lender may designate to visit and
inspect the Collateral or any other properties of such Loan Party, to examine
its books and records and take copies and extracts therefrom and discuss its
respective affairs with its officers and employees at such times and as often as
the Administrative Agent may reasonably request (provided that any Responsible
Officer of such Loan Party may, if it so chooses, be present at or participate
in any such discussion). Each Loan Party hereby authorizes such officers and
employees to discuss with the Administrative Agent or such Lenders the affairs
of such Loan Party. Without limiting the foregoing, each Loan Party shall,
during normal business hours, from time to time upon five (5) Business Days'
prior notice as frequently as the Administrative Agent may reasonably request:
(a) provide the Administrative Agent and any of its officers, employees and
agents access during normal business hours to the properties, facilities,
advisors and employees (including officers) of such Loan Party and to the
Collateral, (b) permit the Administrative Agent and any of its officers,
employees and agents, to inspect, audit and make extracts from such Loan Party's
books and records and (c) permit the Administrative Agent and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Equipment, Inventory and other Collateral of such
Loan Party. If a Default or Event of Default shall have occurred and be
continuing or if access is necessary to preserve or protect the Collateral as
determined by the Administrative Agent, each
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such Loan Party shall provide such access to the Administrative Agent and to
each Lender at all times and without advance notice. Furthermore, as long as any
Event of Default shall have occurred and be continuing, each such Loan Party
shall (i) provide the Administrative Agent and each Lender with access to their
suppliers and customers, (ii) make available to the Administrative Agent and its
respective counsel, as quickly as is possible under the circumstances, originals
or copies of all books and records which the Administrative Agent may request
and (iii) deliver any document or instrument necessary for the Administrative
Agent, as it may from time to time request, to obtain records from any service
bureau or other Person which maintains records for such Loan Party. Each Loan
Party shall maintain duplicate records or supporting documentation on media,
including computer tapes and discs owned by such Loan Party. Any Lender or its
representatives (other than any Person in the Telecommunications Business), upon
request by such Lender to the Administrative Agent, may accompany the
Administrative Agent on any such visit.
7.10 Expenses. The Borrower shall (a) pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs, fees,
charges and expenses incurred or arising in connection with the negotiation,
review, preparation and execution of this Agreement, the other Loan Documents,
any commitment or proposal letter, or any amendment, supplement, waiver,
modification to, the administration of and any restructuring of this Agreement,
the Obligations or the other Loan Documents, including reasonable legal fees and
disbursements, expenses, document charges and other charges and expenses of the
Administrative Agent, (b) following the occurrence and during the continuance of
an Event of Default, pay or reimburse the Administrative Agent and each Lender
for the enforcement, protection or preservation of any rights under or in
connection with this Agreement or any other Loan Document, including reasonable
legal fees and disbursements, audit fees and charges, and all out-of-pocket
expenses, and (c) pay, indemnify and hold each Lender harmless from any and all
recording and filing fees and taxes and any and all liabilities with respect to,
or resulting from any delay by any Loan Party in paying, stamp, excise and other
Taxes (excluding income and franchise taxes and Taxes of similar nature), if
any, which may be payable or determined to be payable in connection with the
execution and delivery or recordation or filing of, or consummation of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement and the
other Loan Documents. All of the amounts described in this Section are referred
to collectively as the "Lenders' Expenses," shall be payable upon demand, and
shall accrue interest at the interest rate for Base Rate Loans five (5) Business
Days after the date of demand until paid in full. All Lenders' Expenses, and
interest thereon, shall be part of the Obligations and shall be secured by the
Collateral. The agreements in this Section 7.10 shall survive repayment of the
Obligations. All Lenders' Expenses that are outstanding on any Borrowing Date
shall be paid before or with such Advance. If the Borrower has not paid to the
Lenders the amount of all Lenders' Expenses billed to the Borrower at least five
(5) Business Days before such Borrowing Date, the Lenders shall be authorized to
retain from any Advance on such Borrowing Date the amount of such Lenders'
Expenses that remain unpaid. The Borrower's obligation to pay Lenders' Expenses
shall not be limited by any limitation on the amount of the Commitment that may
be designated as available for such purposes, and any amounts so designated
shall be used to pay Lenders' Expenses accrued at the time of any Advance before
any of the Borrower's legal fees or similar expenses.
7.11 Payment of Taxes, Charges, Claims and Current Liabilities.
Each Loan Party shall pay or discharge:
(a) on or prior to the date on which penalties thereon accrue,
all Taxes, assessments and other government charges or levies imposed upon it or
any of its properties or income (including such as may arise under Section 4062,
Section 4063 or Section 4064 of ERISA, or any similar provision of Law);
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(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen and other like Persons which
result in creation of a Lien upon any such property;
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such property
(other than Permitted Encumbrances) or which, if unpaid, might give rise to a
claim entitled to priority over general creditors of such Loan Party in a case
under Title 11 (Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving such Loan Party;
and
(d) all other current liabilities so that none is overdue more
than sixty (60) days.
Notwithstanding the foregoing, each Loan Party shall be
entitled to contest or appeal the requirements of any Law or Governmental
Authority or the payment of any asserted Tax, assessment, charge, levy, claim,
liability or any judgment entered against such Loan Party (collectively, in this
Section 7.11, the "requirements") as long as (i) such requirements are being
contested in good faith by appropriate proceedings diligently conducted; (ii)
the Borrower has given the Administrative Agent written notice of such
requirements and its intent to contest them, with supporting reasons for such
contest; (iii) such Loan Party maintains adequate cash reserves or has adequate
availability under this Agreement and makes all appropriate provisions as may be
required by GAAP to provide for any liability arising from such requirements;
(iv) the contesting of, or failure to comply with, such requirements does not in
any material way jeopardize such Loan Party's ability or authority to operate
all or any part of its business or the value or continuing priority of the
security interests of the Administrative Agent on behalf of the Secured Parties
in the Collateral; (v) all such contests of and failures to comply with such
requirements would not, in the aggregate, have a Material Adverse Effect; and
(vi) any foreclosure, attachment, execution, sale or similar proceeding against
such Loan Party or any of its properties in connection with any such
requirements is duly stayed by posting of a bond or security deposit or by other
action sufficient under applicable Law to stay such foreclosure, attachment,
execution, sale or other proceedings.
7.12 Compliance with Laws. Each Loan Party shall comply in all
respects with all Laws applicable to such Loan Party, including all
Environmental Laws; provided, however, that such Loan Party shall not be deemed
to be in violation of this Section 7.12 as a result of any failure to comply
which would not result (i) in any liability or exposure to the Administrative
Agent or the Lenders or (ii) fines, penalties, injunctive relief or other civil
or criminal liabilities which, in the aggregate would not have a Material
Adverse Effect.
7.13 Use of Proceeds. The proceeds of the Advances will be used only
as set forth in Section 2.14.
7.14 Government Authorizations; Regulatory Authorizations, Etc. Each
Loan Party shall at all times obtain and maintain in force all of its Regulatory
Authorizations and Permits and all registrations, qualifications, designations,
declarations and other filings with, any Governmental Authority necessary in
connection with execution and delivery of this Agreement, the Notes or any other
Loan Document, consummation of the transactions herein or therein contemplated,
performance of or compliance with the terms and conditions hereof or thereof or
to ensure the legality, validity and enforceability hereof or thereof, provided,
however, that such Loan Party shall not be deemed to be in violation of this
Section 7.14 as a result of any failure that would not result in (i) any
liability or exposure to the Administrative Agent or the Lenders or (ii) that,
together all such failures, would not result in fines, penalties, injunctive
relief or other civil or criminal liabilities that, in the aggregate, would have
a Material Adverse Effect.
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7.15 Contracts and Franchises. Each Loan Party shall comply with all
agreements or instruments to which it is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or bound and shall
maintain any and all franchises material to its business which it may have or
hereafter acquire; provided, however, that such Loan Party shall not be deemed
to be in violation of this Section 7.15 as a result of failures that in the
aggregate would not have a Material Adverse Effect.
7.16 Site Leases and Consents. Each Loan Party shall maintain in
force and renew as necessary all Site Leases and shall obtain such Landlord
Consents as the Administrative Agent shall reasonably request to protect its and
their Liens and access to the Collateral. All Site Leases entered into after the
date hereof shall have a term (including automatic renewals and such Loan
Party's unilateral renewal rights) equal to or greater than the term of this
Agreement and shall require that the Administrative Agent be given notice of
default and the right to elect to cure defaults and/or assume such agreement
upon such Loan Party's default thereunder upon the occurrence and during the
continuation of an Event of Default under this Agreement.
7.17 Financial Covenants. The Loan Parties shall comply with
the financial covenants set forth on Schedule 7.17.
7.18 Patent, Trademark and Copyright Collateral. (a) The Borrower
shall notify the Administrative Agent immediately if it knows or has reason to
know that any application or registration relating to any patent, trademark or
copyright (now or hereafter existing) may become abandoned or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding any
Loan Party's ownership of any patent, trademark or copyright, its right to
register the same, or to keep and maintain the same, except for adverse
determinations or developments that in the aggregate would not have a Material
Adverse Effect.
(b) Each Loan Party shall take all actions necessary or
requested by the Administrative Agent to maintain and pursue each application,
to obtain the relevant registration and to maintain the registration of each of
the patents, trademarks and copyrights (now or hereafter existing), including
the filing of applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation proceedings,
unless the applicable Loan Party shall determine that such patent, trademark or
copyright is not material to the conduct of its business except for such
intellectual property that if not maintained would have a Material Adverse
Effect.
7.19 Sites. For all Sites acquired after the date hereof by any Loan
Party at any time (except for leases of sales offices with terms shorter than
three (3) years), such Loan Party shall provide to the Administrative Agent
within twenty (20) days of such Loan Party's acquisition thereof and before
placing any Collateral thereon:
(a) Site Leases and Right-of-Way Agreements. A copy of the duly
executed counterpart of all of the Site Leases and Right-of-Way Agreements and
(b) Consent. Duly executed Landlord Consent executed by the
owner of such real property.
7.20 Environmental Site Assessments. For each Site other than a
leased Site, the Borrower shall obtain and deliver to the Administrative Agent,
at the Borrower's expense, an environmental transaction screen for each such
Site and any material portion of any related Right-of-Way, which shall be
conducted by environmental engineers or consultants reasonably acceptable to the
Administrative Agent. Such environmental transaction screen shall cover such
matters as the physical state of the property, the
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past and present uses of the relevant property and the surrounding property, a
search of relevant federal, state and local environmental agency records, and
such similar matters as may be generally consistent with environmental
investigation of commercial properties in the state where the property is
located. If any environmental transaction screen discloses any potential
environmental problems or conditions or the possibility of any material
Environmental Liability for any Loan Party or any Lender, as determined by the
Administrative Agent, then the Administrative Agent may require additional
audits or investigation of the property and, if not satisfied with the results
thereof, may, at its option, decide not to make any Advances in respect of such
property. The Administrative Agent shall notify the Borrower in writing of such
determination and the Administrative Agent's selected course of proceeding
within a reasonable time after the Borrower's submission of such assessment.
7.21 Construction. The Loan Parties shall construct and equip each
Network in full compliance with the Requirements of Law affecting such Network
except to the extent a failure to so comply would not have a Material Adverse
Effect, shall safeguard and store all Equipment financed with the proceeds of
the Loan until installed in appropriate storage facilities owned or leased by a
Loan Party, and, in the event of any cessation of construction for more than
[fifteen (15)] successive calendar days, the Loan Parties shall make adequate
provision, reasonably acceptable to the Administrative Agent, for the protection
of all materials stored on site against deterioration, loss or damage.
7.22 No Encroachments. The Loan Parties shall construct each Network
so that it shall not encroach upon any easement or right-of-way or the land of
others (unless consented to by the affected property owner), other than an
encroachment that does not have a Material Adverse Effect on the Network.
7.23 Certain Notices. The Borrower shall promptly provide the
Administrative Agent and the Lenders with written notice and verification on
each occasion that a switch is installed and becomes operational in one of the
Markets.
7.24 Management Team. The Loan Parties shall engage and continue to
retain a professional and experienced management staff.
7.25 Enforcement of Contracts. Each Loan Party shall comply with the
terms of each Contract, General Intangible and/or Account except for
noncompliances which in the aggregate would not have a Material Adverse Effect.
The Borrower shall deliver to the Administrative Agent copies of all material
demands or notices received by any Loan Party relating in any way to any
material Contract, General Intangible and/or Account other than in the ordinary
course of business.
7.26 Future Subsidiaries. The Borrower will cause each of its
Subsidiaries that has $100,000 or more of net assets and that is not already a
Loan Party to execute and deliver to the Administrative Agent a guaranty of the
Obligations, in form and substance satisfactory to the Administrative Agent,
equivalent to the guaranty of the Subsidiary Guarantors contained herein, to
grant to the Administrative Agent on behalf of the Secured Parties a Lien on the
property of such Subsidiary as security for such guaranty, in form and substance
satisfactory to the Administrative Agent, equivalent to the Lien granted herein
by the Subsidiary Guarantors and to effect all UCC filings and deliver to the
Administrative Agent such legal opinions and other documentation substantially
similar to that provided herein as the Administrative Agent may reasonably
request.
7.27 Liens on After-Acquired Property. Upon the acquisition after
the date hereof by any Loan Party of any asset acquired of the type defined as
Collateral in this Agreement in which the Administrative Agent on behalf of the
Secured Parties does not have a perfected first-priority Lien other than assets
that in the aggregate do not have any material value, such Loan Party shall (a)
promptly grant
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or cause to be granted, or confirm or evidence the grant herein of, to the
Administrative Agent on behalf of the Secured Parties a Lien, upon the terms
contained herein, on all such property and interests, free of all other Liens
except Permitted Encumbrances and (b) at its own expense, (i) prepare, execute,
acknowledge and deliver, or cause the preparation, execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument deemed by the Administrative Agent to be necessary or in the exercise
of its reasonable judgment desirable for the creation, perfection, renewal and
continuation of the foregoing Liens, (ii) pay, or cause to be paid, all Taxes,
fees and legal expenses related to such registration, filing or recording and
(iii) deliver to the Administrative Agent resolutions of Board of Directors and
opinions of counsel, in form and substance as may be reasonably requested by the
Administrative Agent.
7.28 Year 2000 Compliance. Each Loan Party shall take all actions
necessary and commit adequate resources to assure that computer-based and other
systems of Holdings and its Restricted Subsidiaries are Year 2000 Compliant (as
defined in Section 4.19) and to minimize any Material Adverse Effect caused by
the failure of any system which is material to such Loan Party's business to be
Year 2000 Compliant.
7.29 Post-Closing Items. Each Loan Party shall comply with the
post-closing items set forth on Schedule 6.2 in the time permitted, if any is
indicated, and shall promptly provide the Administrative Agent with evidence
thereof in form and substance as may be reasonably acceptable to the
Administrative Agent.
7.30 Further Assurances. Each Loan Party shall and shall cause each
other Loan Party to, at such Loan Party's expense and upon request of the
Administrative Agent, duly execute and deliver, or cause to be duly executed and
delivered, to the Administrative Agent and the Lenders such further instruments
and do and cause to be done such further acts as may be necessary or proper in
the reasonable opinion of the Administrative Agent to carry out more effectively
the provisions and purposes of this Agreement or any other Loan Document.
ARTICLE 8: NEGATIVE COVENANTS
The Loan Parties hereby jointly and severally agree that, from and
after the date hereof until the Termination Date, the Loan Parties will not:
8.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except for (a) Indebtedness owed to a Loan Party, (b) in the case
of the Borrower and the Restricted Subsidiaries, Permitted Indebtedness, (c) in
the case of Holdings, Permitted Holdings Debt and (d) any Indebtedness resulting
from Contingent Obligations permitted by Section 8.3.
8.2 Restrictions on Liens.
(a) Create or suffer to exist any Lien on the Collateral or on
any other property of any Loan Party, or any part thereof, whether superior or
subordinate to the Lien of the Loan Documents, except for the following
permitted encumbrances (the "Permitted Encumbrances"): (i) Liens and
encumbrances in favor of the Administrative Agent on behalf of the Secured
Parties; (ii) government Liens, including Liens for Taxes not yet due, or which
are being contested in good faith and by appropriate proceedings provided that
Section 7.11 is complied with; (iii) statutory Liens in connection with workers'
compensation, unemployment insurance and other social security legislation; (iv)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations and other obligations of a like
nature, in each case incurred in the Loan Parties' ordinary course of business;
(v) deposits to secure surety bonds, appeal bonds, performance bonds and customs
bonds, in each case obtained in the Loan Parties' ordinary
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course of business; (vi) easements, rights-of-way, restrictions and other
similar encumbrances that are not substantial in amount, and which do not in any
case materially detract from the value of any Collateral subject thereto or
interfere with the ordinary conduct of the business of such Loan Party; (vii)
judgment liens with respect to judgments not in excess of $1,500,000 in the
aggregate and with respect to which lien execution has been stayed within thirty
(30) days by appropriate judicial proceedings or the posting of adequate
security which may not be any of the Collateral; (viii) specific liens, if any,
identified on Schedule 8.2 and any renewal or extension of any such Lien that
does not extend to any other property and does not secure an increased amount of
Indebtedness or other greater obligation; (ix) Liens to secure purchase money
indebtedness and Capital Lease Obligations permitted by clause (b) of the
definition of Permitted Indebtedness which is secured by only the property
acquired or any renewal or extension of any such Lien that does not extend to
any other property and does not secure an increased amount of Indebtedness; (x)
statutory Liens of landlords, statutory Liens of banks and rights of set-off,
statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, statutory Liens in favor of customs and revenue authorities, and
other Liens imposed by Law, in each case incurred in the ordinary course of
business (A) for amounts not yet overdue or (B) for amounts that are being
contested in good faith by appropriate proceedings, as long as the provisions of
Section 7.11 are satisfied; (xi) leases or subleases granted to third parties in
accordance with any applicable terms of the Loan Documents and not interfering
in any material respect with the ordinary conduct of the business of the Loan
Parties or resulting in a material dimunition in the value of or rights of the
Administrative Agent and the Lenders with respect to any Collateral; and (xii)
any (A) interest or title of a lessor or sublessor under any lease permitted by
Section 8.7, (B) restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to or (C) subordination of the interest of
the lessee or sublessee under such lease to any restriction or encumbrance
referred to in the preceding clause (B) so long as the holder of such
restriction or encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease.
(b) Become a party to any agreement, note, indenture or
instrument (other than as permitted by clause (ix) of Subsection 8.2(a)), or
take any other action, which would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Administrative Agent on behalf of the
Secured Parties, as additional collateral for the Obligations.
8.3 Limitation on Contingent Obligations. Agree to, or assume,
guarantee, endorse or otherwise in any way be or become responsible or liable
for, directly or indirectly, any Contingent Obligation, except for (i) those
created by or specified in the Loan Documents or with respect to the Obligations
of the Borrower or any of the Restricted Subsidiaries, (ii) those described on
Schedule 8.3 and (iii) endorsements of negotiable instruments for collection.
8.4 Prohibition of Mergers, Acquisitions, Sales of Assets, Name,
Office or Business Changes, Etc.
(a) Enter into, or become the subject of, any transaction of
merger or consolidation (other than a reorganization the principal purpose of
which is to change the state or form of organization of any Loan Party),
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all of such Loan
Party's business or assets, whether now owned or hereafter acquired.
(b) Change its name, chief executive office, principal place
of business, corporate structure, state or form of organization or the location
of any Collateral without giving the Administrative Agent and the Lenders at
least thirty (30) days' advance written notice of such change, and ensuring that
any steps that the Administrative Agent may deem necessary to continue the
perfection and priority of
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security interests of the Administrative Agent on behalf of the Secured Parties
in the Collateral shall have been taken.
(c) Except for sales and other dispositions of Equipment and
Inventory in the ordinary course of business, sell Collateral having a fair
value in excess of Five Million Dollars ($5,000,000) in the aggregate in any
period of twelve (12) consecutive months, without the prior written consent of
the Requisite Lenders, which consent in the case of Asset Dispositions
aggregating not more than Twenty Million Dollars ($20,000,000) for all sales and
dispositions from and after the Closing Date shall not be unreasonably withheld
or delayed by more than ten (10) days and for sales aggregating in excess of
Twenty Million Dollars ($20,000,000) for all sales and dispositions from and
after the Closing Date may be withheld in the sole discretion of the Requisite
Lenders; provided, however, that the Administrative Agent for the benefit of the
Secured Parties has a perfected first priority security interest in the proceeds
of each such Asset Disposition pending reinvestment of such proceeds in
Telecommunications Assets or prepayment of the Loan.
(d) Change the Fiscal Year end of such Loan Party from
December 31, except with the prior written consent of the Requisite Lenders,
which consent shall not be unreasonably withheld.
(e) Amend, restate or otherwise modify, or violate any terms
of, its Organizational Documents in any material respect (except as permitted by
Subsection 8.4(a) or (b)) without the prior written consent of the Requisite
Lenders, which consent will not be unreasonably withheld, except for
reorganization into a "C corporation".
(f) Become or agree to become a general or limited partner in
any general or limited partnership, or a member in a limited liability company
or a joint venturer in any joint venture except as permitted by Section 8.14 or
8.15.
(g) Acquire or purchase substantially all of the stock or
ownership interests in, or substantially all of the business, assets, customers
or operations of, any other entity for more than $500,000 in any one transaction
or a series of related transactions, except for Permitted Acquisitions and
except that Holdings may acquire any Unrestricted Subsidiary.
8.5 Limitation on Equity Payments. In the case of Holdings, make
any Equity Payment and, in the case of any other Loan Party, make any Equity
Payment to a Person other than a Loan Party.
8.6 Assumed Names. Transact or engage in business under any assumed
name, fictitious name, trade style or "d/b/a" except those identified on
Schedule 4.40.
8.7 Limitation on Leases. Enter into any agreement, or be or become
liable under any agreement not in existence as of the date hereof for the lease,
hire or use of any real or personal property for annual rentals in excess of
$250,000 in the aggregate, including capital or operating leases, except that
the Loan Parties may, in the ordinary course of business and on terms standard
in the industry, enter into Site Leases and leases or agreements for office
space, vehicles or office equipment, transmission capacity and for the location
or storage of any of the Collateral.
8.8 Transactions with Affiliates. Except as described in Schedule
4.41, enter into any transaction with any Affiliate of Holdings (other than the
Borrower or any of its Subsidiaries), including any loan or advance, any
repayment of a loan or advance or the purchase, sale or exchange of property or
the rendering of any services, or enter into, assume or suffer to exist any
employment or consulting contract with any Affiliate of Holdings, except in the
ordinary course of business of such Loan Party and upon fair and reasonable
terms no less favorable to such Loan Party than could be obtained, at the time
of
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such transaction, or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefor, in a comparable
arms-length transaction with a Person that is not such an Affiliate of Holdings.
8.9 Extension of Accounts. With respect to Accounts, General
Intangibles or Contracts, (i) grant any material extension of the time of
payment of any thereof, (ii) compromise, compound or settle for a material
amount less than the full amount thereof, (iii) release any Person liable for
the payment thereof or (iv) allow any credit or discount whatsoever thereon,
other than trade discounts granted in the normal course of business or
discounts, compromises, compounds or settlements that could not reasonably be
expected to have a Material Adverse Effect.
8.10 Unscheduled Payments. Make any voluntary or optional principal
or unscheduled interest payment on any Indebtedness other than the Obligations.
8.11 Business Activities. Engage in any business activity that is
not similar, related, ancillary or complementary to the Telecommunications
Business or make any material change in the business objectives, purposes and
operations of the Borrower or any of its Subsidiaries from those contemplated in
the Business Plan, including the Borrower and the Restricted Subsidiaries
entering into Markets in States other than those listed in Schedule 1 or, in the
case of Holdings, except as provided in Subsection 8.15(b).
8.12 Capital Expenditures. Until substantially all the Networks in
each of the Markets contemplated by the Business Plan are operating, directly or
indirectly make or commit to make any material expenditure in respect of the
purchase or other acquisition (including installment purchases or Capital
Leases) of fixed or capital assets, except for expenditures in accordance with
the Business Plan and permitted by Section 7.17 and normal replacements and
maintenance (including capacity expansions and enhancements for existing
Networks) which are properly charged to current operations or expenditures of
Excess Cash Flow not required to prepay the Loans pursuant to Subsection
2.7(b)(iii).
8.13 Holdings' Assets. In the case of Holdings, hold any assets
except for (a) its corporate headquarters and assets included as part of its
corporate headquarters, including furniture, fixtures, computer systems and
office leases, (b) that portion of the proceeds of Holdings' sale of the Company
Notes required to be held in restricted accounts for the payment of interest
thereon, (c) proceeds of future equity and debt issuances not required to repay
the Loan pursuant to Subsection 2.7(b)(ii), (d) the ownership of the
Subsidiaries to the extent permitted by Section 8.15 and (e) obligations for the
repayment of travel advances and loans permitted by clauses (i) and (ii) of
paragraph (a) of Section 8.14, provided, however, that the aggregate outstanding
amount permitted by this clause (e) and by clauses (i) and (ii) of paragraph (a)
of Section 8.14 shall not exceed the respective limit set forth in said clauses
(i) or (ii), as applicable.
8.14 Limitation on Investments, Advances and Loans. (a) In the case
of the Borrower and the Restricted Subsidiaries, make or commit to make any
advance, loan, guarantee of any Indebtedness, extension of credit or capital
contribution to, or hold or invest in or purchase or otherwise acquire any
Stock, bonds, notes, debentures or other securities of, or make any other
investment in, any Person, including any officer of a Loan Party, any Affiliate
of a Loan Party or any officer of any Affiliate of a Loan Party, except another
Loan Party, except (i) travel advances in the ordinary course of business,
relocation loans to employees but not in excess of $250,000 individually or
$1,000,000 in the aggregate outstanding at any one time, (ii) other loans to any
employees of any Loan Party but in any case in an amount (including principal
and interest outstanding) not to exceed $250,000 individually or $1,000,000 in
the aggregate at any given time, (iii) Permitted Intercompany Indebtedness, (iv)
Permitted Acquisitions, (v) any investment acquired (A) in exchange for any
other investment or Accounts held by such Loan Party in connection with or as a
result of a bankruptcy, workout, reorganization or
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recapitalization of the issuer of such investment or Accounts or an Affiliate of
such issuer, (B) as a result of foreclosure by such Loan Party of any secured
Indebtedness or (C) in satisfaction of a judgment, (vi) investments in prepaid
expenses, negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits in the ordinary
course of business, (vii) securities received in connection with Asset
Dispositions aggregating not more than Five Million Dollars ($5,000,000) of
Asset Disposition Net Proceeds for all Asset Dispositions from and after the
Closing Date and (viii) investments existing on the Closing Date as described on
Schedule 8.14.
(b) In the case of Holdings, make any investment other than an
investment permitted by Subsection 8.13 or acquired with the proceeds from the
issuance of Stock or Indebtedness not required pursuant to Subsection 2.7(b)(ii)
to repay the Loan.
8.15 Subsidiaries.
(a) In the case of the Borrower and its Subsidiaries, create,
organize, acquire or have any Subsidiary except in compliance with Section 7.26.
(b) In the case of Holdings, create, organize, acquire or have
any Subsidiary other than the Borrower or a Subsidiary of the Borrower or an
Unrestricted Subsidiary, provided, however, that no Unrestricted Subsidiary may
be established until Holdings shall have received and provided to the
Administrative Agent copies of financing commitments on customary terms for any
Indebtedness of Holdings or such Unrestricted Subsidiary contemplated by the
business plan in respect of which such Unrestricted Subsidiary is being
established.
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of Law):
(a) Payment Default. The Borrower (i) fails to make any
payment of principal of, or interest on, or Fees owing in respect of, the Loan
or any of the other Obligations when such amount becomes due and payable or (ii)
fails to pay or reimburse the Administrative Agent or the Lenders for any
expense reimbursable hereunder or under any other Loan Document within five (5)
Business Days following demand for such reimbursement or payment of expenses.
(b) False Statement. If any statement, representation or
warranty made or deemed made pursuant to Section 6.3 by any Loan Party in any
Loan Document or made in any Financial Statement, certificate, report, exhibit
or document furnished to the Administrative Agent or any Lender pursuant to any
Loan Document, proves to have been untrue, incomplete, false or misleading in
any material respect as of the time when made or deemed made (including by
omission of material information necessary to make such representation, warranty
or statement not misleading in any material respect).
(c) Immediate Default. Any Loan Party shall fail or neglect to
perform, keep or observe any of the provisions of Section 7.13, 7.17, 7.26 or
7.27 or Article 8 or to maintain insurance as listed on Schedule 7.7.
(d) Covenant Defaults. If any Loan Party fails or neglects to
perform, keep or observe any provision of this Agreement, and such default
continues for a period of thirty (30) calendar days after the earlier of such
Loan Party's knowledge thereof or receipt of written notice from the Lender
thereof, except that violation of Subsection 7.11(d) shall become an Event of
Default at the end of the sixty (60)
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day period stated therein and except for specific events listed elsewhere in
this Section 9.1, as to which no notice or cure period shall apply unless
specified.
(e) Undischarged Judgments. If one or more judgments for the
payment of money have been entered against the Borrower in an amount in excess
of $1,500,000 in the aggregate and such judgment or judgments are not covered by
insurance and have remained undischarged and unstayed for a period of thirty
(30) calendar days or, if stayed, all of the conditions in Section 8.2(a)(vii)
have not been satisfied.
(f) Attachments, Etc. If a writ or warrant of attachment,
garnishment, execution, distraint or similar process has been issued against any
Loan Party or any of its properties in an amount in excess of $1,500,000, which
has remained undischarged and unstayed for a period of thirty (30) consecutive
days or, if stayed, all of the conditions in Subsection 8.2(a)(vii) have not
been satisfied.
(g) Default Under Third Party Agreements. A default or breach
occurs under any Indebtedness other than the Loan to which any Loan Party is a
party which (A) involves the failure to make any payment in the amount of
$1,500,000 in the aggregate or (B) causes or permits any holder of such
Indebtedness or a trustee to cause, Indebtedness or a portion thereof in excess
of $1,500,000 in the aggregate to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment, regardless of whether such
default is waived, or such right is exercised, by such holder or trustee.
(h) Involuntary Bankruptcy or Receivership Proceedings. A case
or proceeding commences against any Loan Party (i) seeking a decree or order in
respect of any Loan Party under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any Loan Party or of any substantial part of any such Person's
assets or (iii) seeking the winding-up or liquidation of the affairs of any Loan
Party and any such case or proceeding remains undismissed, unstayed, unbonded or
undischarged for a period of sixty (60) days,.
(i) Voluntary Bankruptcy. Any Loan Party (i) files a petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) consents to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any Loan Party or of any substantial part
of any such Person's assets, (iii) makes a general assignment for the benefit of
creditors, (iv) takes any corporate action to authorize any of the foregoing or
(v) admits in writing its inability to, or shall be generally unable to, pay its
debts as such debts become due.
(j) ERISA Defaults. If, with respect to any Plan, (i) there
has occurred a Reportable Event reported to or which should be reported to the
PBGC which may reasonably result in any material liability to the PBGC with
respect to any Plan, (ii) a Plan has been terminated with insufficient assets to
satisfy the requirements of Section 4041(b) or ERISA, (iii) a trustee has been
appointed by a United States District Court to administer a Plan, (iv) the PBGC
or any other Person has instituted proceedings to terminate a Plan or to appoint
a trustee to administer any such Plan, (v) any Loan Party or any Affiliate has
withdrawn, completely or partially, from any Plan, (vi) any Loan Party or any
Affiliate has incurred secondary liability for withdrawal liability payments
under any Plan or (vii) a Plan has failed to meet the minimum funding standards
established under the Code or ERISA and such event is not being contested by
such Loan Party in compliance with Section 7.11.
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(k) Defaults Under Other Loan Documents. If any default or
breach should occur under any other Loan Document (other than under any
provision of any other Loan Document referred to in any other Subsection of this
Section 9.1) and is not cured or waived within thirty (30) days after the
earlier of (i) a Responsible Officer of any Loan Party becoming aware of such
default or breach or (ii) receipt by any Loan Party of notice from the
Administrative Agent or any Lender of such default or breach, or any such Loan
Documents should cease to be in full force and effect, other than with the
consent of the Requisite Lenders.
(l) Security Interest. Any material provision of Article 3, 9
or 11 of this Agreement shall for any reason cease to be valid, binding and
enforceable in accordance with its terms (or any Loan Party shall challenge in
writing the enforceability of any such provision or shall assert in writing, or
engage in any action or inaction based on any such assertion, that any such
provision has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms) or any security interest created under any Loan
Document shall cease to be a valid and perfected first priority security
interest or Lien (except as otherwise permitted herein or therein) in any of the
Collateral having a value in excess of $1,000,000 purported to be covered
thereby for any reason except the failure of the Administrative Agent or any
Lender to take any action within its control.
(m) Change of Control. If any Change of Control occurs.
9.2 Remedies.
(a) If any Default of Event of Default shall have occurred and
be continuing and the Requisite Lenders shall not have determined to continue to
make Advances so long as that specific Default or Event of Default is
continuing, the Administrative Agent shall (at the written request of the
Requisite Lenders), by written notice to the Borrower, suspend the Commitments
with respect to further Advances, whereupon no further Advances shall be made or
extended (in the sole discretion of the Requisite Lenders) so long as such
Default or Event of Default is continuing. If any Event of Default shall have
occurred and be continuing, the Administrative Agent shall (at the written
request of the Requisite Lenders), without notice except as otherwise expressly
provided herein, increase the rate of interest applicable to the Loans to the
Default Rate.
(b) If any Event of Default shall have occurred and be
continuing, the Administrative Agent may and at the direction of the Requisite
Lenders shall, upon notice to the Borrower from the Administrative Agent, (i)
terminate the Commitments with respect to further Advances; (ii) declare all or
any portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, all without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by the Borrower and each
other Loan Party; and (iii) exercise any rights and remedies provided to the
Administrative Agent on behalf of the Secured Parties under the Loan Documents
and/or at law or in equity, including all remedies provided under the UCC;
provided, however, that upon the occurrence of an Event of Default specified in
Subsection 9.1(h), or (i), the Commitments shall be immediately terminated and
all of the Obligations, including the Loan, shall become immediately due and
payable without declaration, notice or demand by any Person.
9.3 Waivers by Loan Parties. Except as otherwise provided for in this
Agreement or by applicable Law, each Loan Party waives (including for purposes
of Article 11): (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by the Administrative
Agent on behalf of the Secured Parties on which any Loan Party may in any way be
liable, and hereby ratifies and confirms whatever the Administrative Agent on
behalf of the
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Secured Parties may do in this regard, (b) all rights to notice and a hearing
prior to the Administrative Agent's taking possession or control of, or to the
Administrative Agent's replevy, attachment or levy upon, the Collateral or any
bond or security which might be required by any court prior to allowing the
Administrative Agent on behalf of the Secured Parties to exercise any of its
remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws. If any notification of intended disposition of any of the
Collateral is required by applicable Law, such notification shall be deemed
reasonably and properly given if given in accordance with Section 12.5 at least
ten (10) days before such disposition.
9.4 Exercise of Rights. Subject to any requirements for FCC, PUC or
other governmental approval upon the occurrence and during the continuance of
any Event of Default, the rights, powers and privileges provided in this Section
9.4 and all other remedies available to the Administrative Agent and the Lenders
under this Agreement or by statute or by rule of law may be exercised by the
Administrative Agent or any Lender at any time from time to time whether or not
the Obligations shall be due and payable, and whether or not the Administrative
Agent or any Lender shall have instituted any foreclosure or other action for
the enforcement of this Agreement or any other Loan Document. No failure to
exercise, nor any delay in exercising on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under any of the
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or future exercise thereof or the exercise of any other
right, remedy, power or privilege.
9.5 Rights of Secured Party. In addition to all other rights and
remedies granted to it under this Agreement, the other Loan Documents and under
any other instrument or agreement securing, evidencing or relating to any of the
Obligations, if any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise all rights and remedies of a secured party
under the UCC.
9.6 Additional Remedies. Remedies of the Administrative Agent and the
Lenders upon the occurrence and during the continuance of an Event of Default
shall include, in addition to, and not in lieu of, such remedies as are
available at law or in equity or provided for in any of the Loan Documents, the
following:
(a) Foreclosure; Receivership. The Administrative Agent shall
be entitled to file one or more suits at law or in equity to collect the
Obligations and/or to foreclose on the Liens on and security interests created
by this Agreement or any other Loan Document. The Administrative Agent may apply
or require any Loan Party to apply for any necessary transfers, assignments,
orders, consents or licenses in connection with the operation or abandonment of
any Network or any part thereof, and shall also be entitled as a matter of right
and without notice and without requiring bond (notice and bond being hereby
waived), without regard to the solvency or insolvency of any Loan Party at the
time of application and without regard to the value of the Collateral at that
time, to have a receiver appointed by a court of competent jurisdiction in order
to manage, protect and preserve the Collateral or any part thereof and to
continue the operation of the business of any Loan Party, and to collect all
revenues and profits thereof and apply the same to the payment of all expenses
and other charges of such receivership until the sale or other final disposition
of the Collateral. Each Loan Party hereby consents to the appointment of such
receiver.
(b) Collection of Accounts, Etc. At any time after the
occurrence and during the continuance of an Event of Default, notify account
debtors that the Accounts have been assigned to the Administrative Agent on
behalf of the Secured Parties and that payments shall be made directly to the
Administrative Agent on behalf of the Secured Parties. Upon the request of
Requisite Lenders at any time after the occurrence and during the continuance of
an Event of Default, the Borrower shall so notify
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such account debtors. Upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent on behalf of the Secured Parties
shall be entitled, but not obligated, to collect, compromise, settle and
otherwise act with respect to any Accounts, Contracts or General Intangibles,
and shall be authorized to (i) endorse checks and other instruments, (ii)
communicate directly with any Loan Party's customers or other obligors to
collect payments and/or (iii) bring actions to enforce such collection, and
otherwise take any actions necessary to collect and recover any amounts owing to
such Loan Party. Any amounts so received by the Administrative Agent on behalf
of the Secured Parties shall be held for the account of the Borrower and may be
applied to the Obligations at the Administrative Agent's option, at the
direction of the Requisite Lenders, but shall not be deemed to be payment of the
Obligations until so applied. The Borrower shall, at the Requisite Lenders'
request, deliver to the Administrative Agent copies of all original and other
documents evidencing or relating to the Accounts, Contracts or General
Intangibles, including all original orders, sublease contracts, invoices,
shipping receipts, computer records and databases.
(c) Segregation of Payments. Upon the Administrative Agent's
request, at the direction of the Requisite Lenders, following and during the
continuance of an Event of Default, the Borrower shall immediately deliver to
the Administrative Agent on behalf of the Lenders all Proceeds received by any
Loan Party, in the form received except for the Borrower' endorsement if
required. Alternatively, the Administrative Agent may, at the direction of the
Requisite Lenders, require the Borrower, to immediately deliver, or may require
the delivery of, such Proceeds to a special bank account or post office box from
which only the Administrative Agent on behalf of the Secured Parties can
withdraw them. In either case, all such Proceeds and any payments received by
any Loan Party under or in connection with any of the Collateral received by
such Loan Party shall be held by the Borrower in trust for the Administrative
Agent on behalf of the Secured Parties and shall be segregated from other funds
of the Borrower. Any and all such payments so received by the Administrative
Agent on behalf of the Secured Parties (whether from the Borrower or otherwise)
may, in the sole discretion of the Administrative Agent, be held by the
Administrative Agent on behalf of the Secured Parties as collateral security
for, and/or then or at any time thereafter applied in whole or in part by the
Administrative Agent, against all or any part of the Obligations of the Loan
Parties in such order as the Administrative Agent may determine in its sole
discretion. Any balance of such payments held by the Administrative Agent and
remaining after payment in full of all the Obligations shall be paid over to the
Borrower or to any Person lawfully entitled to receive the same.
(d) Right to Cure. If any Loan Party fails in any material
respect to perform or comply with any of its agreements contained herein or in
any of the other Loan Documents, the Administrative Agent may take whatever
actions it may deem appropriate to perform or comply or otherwise cause
performance or compliance with such agreement, all at the risk, cost and expense
of the Borrower.
(e) Set Off. If the unpaid principal amount of the Loan,
interest accrued thereon or any other amount owing by the Loan Parties hereunder
or under the Loan shall have become due and payable (by acceleration or
otherwise), each Lender and each Affiliate of each Lender shall have the right,
in addition to all other rights and remedies available to it, without notice to
the Loan Parties, to set off against and to appropriate and apply to such due
and payable amounts any debt owing to, and any other funds held in any manner
for the account of, any of the Loan Parties by such Lender or Affiliate. Such
right shall exist whether or not such Lender or Affiliate shall have given
notice or made any demand hereunder or under the Other Loan Documents, whether
or not such debt owing to or funds held for the account of the Loan Parties is
or are matured or unmatured, and regardless of the existence or adequacy of any
Collateral, guaranty or any other security, right or remedy available to the
Administrative Agent and the Lenders. Each Loan Party hereby consents to and
confirms the foregoing arrangements and confirms such Lender's and Affiliate's
rights of set off.
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9.7 Application of Proceeds. Any proceeds of any of the Collateral,
received by the Administrative Agent through sale or disposition of the
Collateral or otherwise, shall be applied by the Administrative Agent toward the
payment of the Obligations, including expenses in connection with the Collateral
(including reasonable fees and legal expenses), as provided in Section 2.10.
9.8 Discontinuance of Proceedings. If the Administrative Agent or any
Lender should proceed to enforce any right or remedy under this Agreement or any
other Loan Document, and then discontinue or abandon such proceeding for any
reason, all rights, powers and remedies of the Administrative Agent and the
Lenders hereunder shall continue as if no such proceeding had been taken.
9.9 Power of Attorney and Proxy. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted by the Loan
Documents, including Article 3 and this Article 9, each Loan Party hereby
irrevocably constitutes and appoints the Administrative Agent for the benefit of
the Administrative Agent and the Lenders its true and lawful attorney-in-fact
and proxy to execute, acknowledge and deliver any and all documents and
instruments, vote any Stock and do and perform any acts such as are referred to
in the Loan Documents, including Article 3 and this Article 9, with full
irrevocable power and authority in the name and on behalf of such Loan Party,
from time to time in the Administrative Agent's reasonable discretion after the
occurrence and during the continuance of an Event of Default, in accordance with
the Loan Documents and any statute or rule of law. This power of attorney and
proxy is a power coupled with an interest and cannot be revoked. Each Loan Party
hereby ratifies all that said attorney-in-fact and proxy shall lawfully do or
cause to be done by virtue and in accordance with the terms hereof.
Without limiting the generality of the foregoing, the Administrative
Agent may, after the occurrence and during the continuance of an Event of
Default, do the following without notice to or assent by any Loan Party to
accomplish the purposes of this Agreement:
(a) upon failure of such Loan Party to timely pay or discharge
Taxes or Liens levied or placed on or threatened against the Collateral, effect
any repairs or any insurance called for by the terms of this Agreement or any
other Loan Document, and pay all or any part of the premiums therefor and the
costs thereof;
(b) file any application, petition or other request with the
FCC, any PUC or any other Governmental Authority for the purpose of obtaining
any consent or approval from or satisfying any filing or notice requirement of
any Governmental Authority in order to effect a sale or transfer of any or all
the Collateral, or a change in control of, or to permit the Administrative Agent
to complete or operate, or both, any Network;
(c) vote any membership interest or other Stock; and
(d) (i) direct any party liable for any payment under any of
the Contracts or Accounts to make payment of any and all monies due and to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (ii) in the name of such Loan Party or its
own name or otherwise, take possession of and endorse and collect any checks,
drafts, notes, acceptances, or other instruments for the payment of monies due
under, or otherwise receive payment of and receipt for any and all monies,
claims and other amounts due and to become due at any time in respect of or
arising out of any Collateral; (iii) sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral; (iv) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction or before any arbitrator to collect all or any of the Collateral
and to enforce any other right in respect of any Collateral; (v) defend any
suit,
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action or proceeding brought against such Loan Party with respect to any
Collateral; (vi) settle, compromise or adjust any suit, action or proceeding
described above upon commercially reasonable terms under the circumstances and,
in connection therewith, give such discharges or releases as the Administrative
Agent may reasonably deem appropriate; (vii) cure any default under any Contract
and/or modify and/or assume any such Contract; and (viii) generally sell, use,
operate, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and, at the
Administrative Agent's option and the Loan Parties' expense, at any time or from
time to time after the occurrence and during the continuance of an Event of
Default, all other acts and things that the Administrative Agent reasonably
deems necessary to perfect, preserve or realize upon the Collateral and the
Administrative Agent's security interest therein on behalf of the Secured
Parties, in order to effect the intent of this Agreement and the other Loan
Documents all as fully and effectively as such Loan Party might do.
9.10 Regulatory Matters.
(a) Loan Parties' Cooperation; Consents. Notwithstanding any
provision to the contrary contained herein, the Administrative Agent and the
Lenders will not exercise any right or remedy under this Agreement that requires
prior FCC or PUC approval without first obtaining such approval. If counsel to
the Administrative Agent reasonably determines that the consent of the FCC or
any PUC is required in connection with any of the actions that may be taken by
the Administrative Agent in the exercise of its rights hereunder or under any of
the other Loan Documents, then Loan Parties, at their sole cost and expense,
agree to use their reasonable best efforts to secure such consent and to
cooperate with the Administrative Agent in any action commenced by the
Administrative Agent to secure such consent. Upon the occurrence and during the
continuation of an Event of Default the Borrower shall promptly execute and/or
cause the execution of all applications, certificates, instruments and other
documents and papers that may be required in order to obtain any necessary
governmental consent, approval or authorization, and if the Borrower fails or
refuses to execute such documents, the clerk of the court with jurisdiction may
execute such documents on behalf of the Borrower.
(b) Loan Parties' Cooperation; Transfers. In connection with
the enforcement by the Administrative Agent of any remedies available to it as a
result of any Event of Default and subject to the provisions of Subsection
9.10(a), the Loan Parties shall join and cooperate fully with the Administrative
Agent, and with any receiver or trustee referred to herein and with the
successful bidder or bidders at any foreclosure sale when any of these entities
files an application with the FCC or any PUC, or with any necessary federal,
state and local governmental authorities, requesting their prior approval of (i)
the operation or abandonment of all or any portion of the Collateral and (ii)
the assignment or transfer to such entity of all Permits issued to any Loan
Party by the FCC, any PUC or any such other authorities with respect to the Loan
Parties' business and the operation thereof. The Loan Parties' cooperation shall
include without limitation the furnishing of any information that may be
required in connection with such applications.
(c) Conveyance of Regulatory Authorizations. Subject to any
necessary FCC or PUC approval, each Loan Party agrees to assign, transfer and
convey the Regulatory Authorizations to the Administrative Agent (or its
designee) upon the Administrative Agent's request following the occurrence and
during the continuance of an Event of Default, to the extent that any such
assignment or transfer may be deemed necessary to allow the Administrative Agent
to exercise its remedies hereunder or under the Loan Documents.
(d) Specific Performance. Each Loan Party recognizes that its
Regulatory Authorizations are unique assets that may have to be transferred in
order for the Administrative Agent to adequately realize the value of its
security interests. Each Loan Party further recognizes that a violation
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of this provision would result in irreparable harm to the Administrative Agent
and the Lenders for which monetary damages may not readily be ascertainable.
Therefore, in addition to any other remedy that may be available to the
Administrative Agent and the Lenders at law or in equity, the Administrative
Agent shall have the remedy of specific performance to enforce the provisions of
this Section.
ARTICLE 10: ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF
ADMINISTRATIVE AGENT
10.1 Assignment and Participations.
(a) The Loan Parties signatory hereto consent to any Lender's
assignment of, and/or sale of participations in, at any time or times, the Loan
Documents, and any Commitment or of any portion thereof or interest therein,
including any Lender's rights, title, interests, remedies, powers or duties
thereunder, whether evidenced by a writing or not. Any assignment by the Lender
shall (i) require the consent of the Administrative Agent and the Borrower
(which, in the case of the Borrower, shall not be unreasonably withheld or
delayed); provided, however, that no consent of the Borrower shall be required
if an Event of Default shall have occurred and be continuing, (ii) the execution
of an assignment agreement (an "Assignment Agreement") substantially in the form
attached hereto as Exhibit G and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, the Administrative Agent; (iii) if a
partial assignment, be in an amount at least equal to $5,000,000, be of the same
Pro Rata Share of the Commitment and the Loan and, after giving effect to any
such partial assignment, the assigning the Lender shall have retained
Commitments and Loans in an amount at least equal to $5,000,000; and (iv)
include a payment to the Administrative Agent of an assignment fee of $3,500 by
the assigning Lender. The failure of the Borrower to consent to an assignment to
a Person that is or is an Affiliate of a Person that is engaged in the
telecommunications industry and is a competitor of or supplier to any Loan Party
shall not be deemed unreasonable. In the case of an assignment by any Lender
under this Section 10.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as it would if it were
named as a Lender hereunder. The assigning the Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. The Borrower hereby
acknowledges and agrees that any such assignment will give rise to a direct
obligation of the Borrower to the assignee and that the assignee shall be
considered to be a "Lender." In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event any Lender
assigns or otherwise transfers all or any part of the Obligations, any such
Lender shall so notify the Borrower and the Borrower shall, upon the request of
the Administrative Agent or such Lender, execute a new Note in exchange for each
Note, if any, or portion thereof being assigned. Notwithstanding the foregoing
provisions of this Subsection 10.1(a), any Lender may at any time pledge the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's rights
under this Agreement and the other Loan Documents to another investment fund
managed by the same investment advisor; provided, however, that no such pledge
to a Federal Reserve Bank shall release such Lender from such Lender's
obligations hereunder or under any other Loan Document.
(b) Any participation by any Lender in all or any part of its
Commitments shall be made with the understanding that all amounts payable by the
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any
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release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement and the other Loan Documents). Solely for
purposes of Sections 2.12, 2.13, 7.8 and 10.8, the Borrower acknowledges and
agrees that a participation shall give rise to a direct obligation of the
Borrower to the participant and the participant shall be considered to be a
"Lender." Except as set forth in the preceding sentence neither the Borrower nor
any other Loan Party shall have any obligation or duty to any participant.
Neither the Administrative Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 10.1, no
Lender shall, as between any Loan Party and that Lender, or the Administrative
Agent and that Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment, transfer or negotiation of, or granting of
participation in, all or any part of the Loans, the Notes or other Obligations
owed to such Lender.
(d) Each Loan Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 10.1
as reasonably required to enable the assigning or selling the Lender to effect
any such assignment or participation, including the execution and delivery of
any and all agreements, Notes and other documents and instruments as shall be
requested and, if requested by the Administrative Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants. Each Loan Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of such Loan Parties and its affairs contained in any selling
materials provided by it and all other information provided by it and included
in such materials, except that any Projections delivered by such Loan Party
shall only be certified by such Loan Party as having been prepared by it in
compliance with the representations contained in Section 4.10.
(e) Any Lender may furnish any information concerning the Loan
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants). Each Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 12.16.
(f) As long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Subsection 2.13(a),
increased costs under Subsection 2.13(b), an inability to fund LIBOR Loans under
Subsection 2.13(c), or withholding Taxes in accordance with Subsection 2.12(a).
10.2 Appointment of the Administrative Agent. GECC is hereby appointed
to act on behalf of all the Lenders as the Administrative Agent under this
Agreement and the other Loan Documents. The provisions of this Section 10.2 are
solely for the benefit of the Administrative Agent and the Lenders and no Loan
Party nor any other Person shall have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Administrative Agent shall act
solely as an agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for any Loan Party or any other Person. The Administrative Agent shall have no
duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of the Administrative Agent
shall be mechanical and administrative in nature and the Administrative Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Neither the Administrative Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any
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Lender for any action taken or omitted to be taken by it as Administrative Agent
hereunder or under any other Loan Document, or in connection herewith or
therewith, except for damages caused by its or their own gross negligence or
willful misconduct.
If the Administrative Agent shall request instructions from the
Requisite Lenders or all Affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then the Administrative Agent shall be entitled to refrain from such
act or taking such action unless and until the Administrative Agent shall have
received instructions from the Requisite Lenders or all Affected Lenders, as the
case may be, and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder or under any other
Loan Document (a) if such action would, in the opinion of the Administrative
Agent, be contrary to Law or the terms of this Agreement or any other Loan
Document, (b) if such action would, in the opinion of the Administrative Agent,
expose the Administrative Agent to Environmental Liabilities or (c) if the
Administrative Agent shall not first be indemnified to its satisfaction against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of the Requisite Lenders or all affected Lenders, as applicable.
10.3 The Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages caused by its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Loan Party or to inspect the Collateral (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (f) shall incur no liability under or
in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
10.4 GECC and Affiliates. With respect to its Commitments hereunder,
GECC shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise the same as though it were
not the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GECC in its individual capacity. GECC and
its Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Loan Party, any of their Affiliates and any Person who may do
business with or own securities of any Loan Party or any such Affiliate, all as
if GECC were not the Administrative Agent and without any duty to account
therefor to the Lenders. GECC and its Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for
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the same to the Lenders. Each Lender acknowledges the potential conflict of
interest between GECC as the Lender holding disproportionate interests in the
Loans and GECC as the Administrative Agent.
10.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the Financial Statements referred to in Section 4.10 and
such other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Loan Parties and its own decision to enter
into this Agreement. Each Lender also acknowledges 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 decisions in taking or not taking action under
this Agreement. Each Lender acknowledges the potential conflict of interest of
each other Lender as a result of the Lenders holding disproportionate interests
in the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.
10.6 Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent the Administrative Agent is not reimbursed by Loan Parties
and without limiting the obligations of Loan Parties hereunder), ratably
according to their respective Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by the Administrative Agent in connection therewith;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other Loan
Document, to the extent that the Administrative Agent is not reimbursed for such
expenses by Loan Parties.
10.7 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving not less than thirty (30) days' prior written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within thirty (30)
days after the resigning Administrative Agent's giving notice of resignation,
then the resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be the Lender, if the Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing by the 30th
day after the date such notice of resignation was given by the resigning
Administrative Agent, such resignation shall become effective and the Requisite
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above. Any successor Administrative Agent
appointed by the Requisite Lenders hereunder shall be subject to the approval of
the Borrower, such approval not to be unreasonably withheld or delayed;
provided, however, that such approval shall not be required if a Default or
Event of Default shall have occurred and be continuing. Upon the acceptance of
any appointment as the Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights,
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powers, privileges and duties of the resigning Administrative Agent. Upon the
earlier of the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent or the effective date of the
resigning Administrative Agent's resignation, the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents, except that any indemnity rights or other rights in favor
of such resigning Administrative Agent shall continue. After any resigning
Administrative Agent's resignation hereunder, the provisions of this Section
10.7 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement and the other
Loan Documents.
10.8 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note and each of their respective Affiliates
is hereby authorized at any time or from time to time, without notice to any
Loan Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of the Borrower or any Guarantor
(regardless of whether such balances are then due to the Borrower or such
Guarantor) and any other properties or assets at any time held or owing by that
Lender, that holder or that Affiliate to or for the credit or for the account of
the Borrower or any Guarantor against and on account of any of the Obligations
which are not paid when due. Any Lender or holder of any Note or any Affiliate
of either exercising a right to set off or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share of the Obligations
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender or holder to share the
amount so set off or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares. Each Loan Party agrees, to the
fullest extent permitted by law, that (a) any Lender or holder may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holder so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the set
off amount or payment otherwise received is thereafter recovered from the
Lender, holder or Affiliate that has exercised the right of set off, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
10.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.
(a) Advances; Payments.
(i) The Administrative Agent shall notify the Lenders,
promptly after receipt of a Borrowing Certificate and in any event prior to 3:00
p.m. (New York time) on the date such Borrowing Certificate is received, by
telecopy, telephone or other similar form of transmission. Each Lender shall
make the amount of such Lender's Pro Rata Share of such Advance available to the
Administrative Agent in same day funds by wire transfer to the Administrative
Agent's account as set forth in Schedule 10.9 not later than 3:00 p.m. (New York
time) on the requested funding date in the case of a Base Rate Loan and not
later than 11:00 a.m. (New York time) on the requested funding date in the case
of a LIBOR Loan. After receipt of such wire transfers (or, in the Administrative
Agent's sole discretion, before receipt of such wire transfers), subject to the
terms hereof, the Administrative Agent shall make the requested Advance to the
Borrower to the account of the Borrower specified on Schedule 10.9. All payments
by each Lender shall be made without set off, counterclaim or deduction of any
kind.
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(ii) All Payments due hereunder and under the Notes shall be
made to the Administrative Agent by wire transfer to the account specified on
Schedule 10.9 no later than 1:00 p.m. (New York time) on the date due. Payments
received after such time shall be deemed to have been made on the next Business
Day. On each Business Day that the Administrative Agent receives a payment with
respect to the Loans, the Administrative Agent will advise each Lender by
telephone or telecopy of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of the Lenders with respect to
each applicable Loan. Provided that such Lender has funded all payments or
Advances required to be made by it and has purchased all participations required
to be purchased by it under this Agreement and the other Loan Documents as of
such date, the Administrative Agent will pay to each Lender such Lender's Pro
Rata Share of such payment. To the extent that any Lender (a "Non-Funding
Lender") has failed to fund all such payments and Advances or failed to fund the
purchase of all such participations, the Administrative Agent shall be entitled
to set off the funding short-fall against that Non-funding Lender's Pro Rata
Share of all payments received from the Borrower. Such payments shall be made by
wire transfer to such Lender's account (as specified by such Lender in Schedule
10.9 or the applicable Assignment Agreement) not later than 2:00 p.m. (New York
time) on the next Business Day following receipt.
(b) Availability of Lenders' Pro Rata Shares. The
Administrative Agent may assume that each Lender will make its Pro Rata Share of
each Advance available to the Administrative Agent on each funding date. If such
Pro Rata Share is not, in fact, paid to the Administrative Agent by such Lender
when due, the Administrative Agent will be entitled to recover such amount on
demand from such Lender without set off, counterclaim or deduction of any kind.
If any Lender fails to pay the amount of its Pro Rata Share forthwith upon the
Administrative Agent's demand, the Administrative Agent shall promptly notify
the Borrower and the Borrower shall immediately repay such amount to the
Administrative Agent. Nothing in this Subsection 10.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require the
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that any Loan Party may have against any Lender as a result of any
default by such Lender hereunder. To the extent that the Administrative Agent
advances funds to the Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such Advance is made, the Administrative
Agent shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If the Administrative Agent pays an amount to a Lender
under this Agreement in the belief or expectation that a related payment has
been or will be received by the Administrative Agent from the Borrower and such
related payment is not received by the Administrative Agent, then the
Administrative Agent will be entitled to recover such amount from such Lender on
demand without set off, counterclaim or deduction of any kind.
(ii) If the Administrative Agent determines at any time that
any amount received by the Administrative Agent under this Agreement must be
returned to the Borrower or paid to any other Person pursuant to any insolvency
law or otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, the Administrative Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to the Administrative Agent on demand any portion of such
amount that the Administrative Agent has distributed to such Lender, together
with interest at such rate, if any, as the Administrative Agent is required to
pay to the Borrower or such other Person, without set off, counterclaim or
deduction of any kind.
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(d) Non-Funding Lenders. The failure of any Non-Funding Lender
to make any Advance or any payment required by it hereunder shall not relieve
any other Lender (each such other Lender, an "Other Lender") of its obligations
to make such Advance, but neither any Other Lender nor the Administrative Agent
shall be responsible for the failure of any Non-Funding Lender to make an
Advance or to purchase a participation required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" (or be included in the calculation of the "Requisite
Lenders" hereunder) for any voting or consent rights under or with respect to
any Loan Document.
(e) Dissemination of Information. The Administrative Agent
will use reasonable efforts to provide the Lenders with any notice of an Event
of Default received by the Administrative Agent from, or delivered by the
Administrative Agent to, any Loan Party, with notice of any Event of Default of
which the Administrative Agent has actually become aware and with notice of any
action taken by the Administrative Agent following any Event of Default;
provided, however, that the Administrative Agent shall not be liable to any
Lender for any failure to do so, except to the extent that such failure is
attributable to the Administrative Agent's gross negligence or willful
misconduct. The Lenders acknowledge that each Loan Party is required to provide
Financial Statements to the Lenders hereunder and agrees that the Administrative
Agent shall have no duty to provide the same to the Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of set off) without
first obtaining the prior written consent of the Requisite Lenders, it being the
intent of the Lenders that any such action to protect or enforce rights under
this Agreement and the Notes shall be taken in concert and at the direction or
with the consent of the Administrative Agent.
ARTICLE 11: GUARANTY
11.1 Guaranty. Each of the Guarantors hereby absolutely and
unconditionally guarantees to the Administrative Agent and the Lenders and their
respective successors and assigns the full and prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance of, all Obligations
owing by each of the Guarantors. Each Guarantor agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Article 11 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Article 11 shall be absolute and
unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan Document
or any other agreement, document or instrument to which any Loan Party is or may
become a party;
(b) the absence of any action to enforce this Agreement
(including this Article 11) or any other Loan Document or the waiver or consent
by the Administrative Agent and the Lenders with respect to any of the
provisions thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any action, or the
absence of any action, by the Administrative Agent and the Lenders in respect
thereof (including the release of any such security);
(d) the insolvency of any Loan Party; or
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(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor's liability with respect to the Obligations is primary,
not secondary and it shall not be a condition to the obligations of the
Guarantors hereunder that the Lenders or the Administrative Agent pursue or
preserve remedies against any party primarily or secondarily liable on the
Obligations.
11.2 Waivers by Guarantors. Each Guarantor expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel the Administrative Agent or the Lenders to
marshall assets or to proceed in respect of the Obligations guaranteed hereunder
against any other Guarantor, any other party or against any security for the
payment and performance of the Obligations before proceeding against, or as a
condition to proceeding against, such Guarantor. It is agreed among each
Guarantor, the Administrative Agent and the Lenders that the foregoing waivers
are of the essence of the transaction contemplated by this Agreement and the
other Loan Documents and that, but for the provisions of this Article 11 and
such waivers, the Administrative Agent and the Lenders would decline to enter
into this Agreement.
11.3 Benefit of Guaranty. Each Guarantor agrees that the provisions of
this Article 11 are for the benefit of the Administrative Agent and the Lenders
and their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any Guarantor and the Administrative
Agent or the Lenders, the obligations any Guarantor has under the Loan
Documents.
11.4 Subordination of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 11.7, each Guarantor hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
Cash. Each Guarantor acknowledges and agrees that this subordination is intended
to benefit the Administrative Agent and the Lenders and shall not limit or
otherwise affect such Guarantor's liability hereunder or the enforceability of
this Article 11 and that the Administrative Agent, the Lenders and their
respective successors and assigns are intended third-party beneficiaries of the
waivers and agreements set forth in this Section 11.4.
11.5 Election of Remedies. If the Administrative Agent or any Lender
may, under applicable Law, proceed to realize its benefits under any of the Loan
Documents giving the Administrative Agent or such Lender a Lien upon any
Collateral, whether owned by any Loan Party or by any other Person, either by
judicial foreclosure or by non-judicial sale or enforcement, the Administrative
Agent or any Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of its rights and remedies under this
Article 11. If, in the exercise of any of its rights and remedies, the
Administrative Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Loan Party or any
other Person, whether because of any applicable Laws pertaining to "election of
remedies" or the like, each Guarantor hereby consents to such action by the
Administrative Agent or such Lender and waives any claim based upon such action,
even if such action by the Administrative Agent or such Lender shall result in a
full or partial loss of any rights of subrogation which each Guarantor might
otherwise have had but for such action by the Administrative Agent or such
Lender. Any election of remedies which results in the denial or impairment of
the right of the Administrative Agent or any Lender to seek a deficiency
judgment against any Guarantor shall not impair any other Guarantor's obligation
to pay the full amount of the Obligations. In the event the Administrative Agent
or any Lender shall bid at any foreclosure or trustee's sale or at any private
sale permitted by law or the Loan Documents, the Administrative Agent or such
Lender may bid all or less than the amount of the Obligations and the amount of
such bid need not be paid by the Administrative
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Agent or such Lender but, at the election of the Administrative Agent or such
Lender, shall be credited against the Obligations. The amount of the successful
bid at any such sale, whether the Administrative Agent, the Lender or any other
party is the successful bidder, shall be conclusively deemed to be the fair
market value of the Collateral and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Article 11, notwithstanding that
any present or future Law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which the Administrative Agent or
any Lender might otherwise be entitled but for such bidding at any such sale.
11.6 Limitation. Notwithstanding any provision herein contained to the
contrary, each Guarantor's liability under this Article 11 shall be limited to
an amount not to exceed the amount which could be claimed by the Administrative
Agent and the Lenders from such Guarantor under this Article 11 without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law after
taking into account, among other things, such Guarantor's right of contribution
and indemnification from each other Guarantor under Section 11.7.
11.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Guarantor shall make a payment
under this Article 11 of all or any of the Obligations (a "Guarantor Payment")
which, taking into account all other Guarantor Payments then previously or
concurrently made by any other Guarantor, exceeds the amount which such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
Obligations satisfied by such Guarantor Payment in the same proportion that such
Guarantor's "Allocable Amount" (as defined below) (as determined immediately
prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each
of Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations
and termination of the Commitments, such Guarantor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Guarantor for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of
any Guarantor shall be equal to the maximum amount of the claim which could then
be recovered from such Guarantor under this Article 11 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 11.7 is intended only to define the relative
rights of the Guarantors and nothing set forth in this Section 11.7 is intended
to or shall impair the obligations of the Guarantors, jointly and severally, to
pay any amounts as and when the same shall become due and payable in accordance
with the terms of this Agreement, including Section 11.1.
(d) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of the
Guarantors to which such contribution and indemnification are owing.
(e) The rights of the indemnifying Guarantors against other
Loan Parties under this Section 11.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
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11.8 Liability Cumulative. The liability of the Guarantors under this
Article 11 is in addition to and shall be cumulative with all liabilities of
each Guarantor to the Administrative Agent and the Lenders under this Agreement
and the other Loan Documents to which such Guarantor is a party or in respect of
any Obligations or obligation of the other Guarantors without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
ARTICLE 12: GENERAL CONDITIONS/MISCELLANEOUS
The following conditions shall be applicable throughout the term of
this Agreement:
12.1 Amendments, Modifications and Waivers. No amendment, modification
or waiver of any provision of this Agreement nor consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Requisite Lenders, and then any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, modification, waiver or
consent shall, unless in writing and signed by each Lender affected thereby, do
any of the following: (i) waive any of the conditions specified in Article 5,
except as otherwise provided therein; (ii) increase the Commitments or subject
any Lender to any additional obligations; (iii) reduce the principal of, or
interest on, the Loan or any fees or other amounts payable hereunder; (iv) amend
any of the provisions in Article 2; (v) release any material amount of the
Collateral except as shall otherwise be provided herein; (vi) release any
Guarantor having a material amount of assets; (vii) amend the definition of the
Requisite Lenders; or (viii) amend this Section 12.1; and provided, further,
that no amendment, modification, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or the other Loan Documents. No failure on the part of any Lender
or the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
12.2 Advances Not Implied Waivers. No waiver of the requirements
contained in any Loan Document shall be effective unless in writing duly signed
by the required number of the Lenders provided for herein. No Advance hereunder
shall constitute a waiver of any of the conditions of the Lenders' obligation to
make further Advances, except as otherwise provided herein. Any Advance made by
any Lender and any sums expended by any Lender pursuant to the Loan Documents
shall be deemed to have been made pursuant to this Agreement, notwithstanding
the existence of an uncured Default or Event of Default. No Advance at a time
when an Event of Default exists shall constitute a waiver of any right or remedy
by the Administrative Agent or any Lender existing by reason of such Event of
Default, including the right to accelerate the maturity of the Indebtedness
evidenced by the Loan Documents or to foreclose the Lien on the Collateral or to
refuse to make further advances hereunder.
12.3 Business Day. Except as otherwise provided herein, whenever any
payment or action to be made or taken hereunder or under any other Loan Document
shall be stated to be due on a day which is not a Business Day, such payment or
action shall be made or taken on the next succeeding Business Day (except as set
forth in the definition of LIBOR Period) and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
12.4 Records. From time to time the Administrative Agent may send the
Borrower statements of the unpaid principal amount of the Loan, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, and the amount remaining
available on any Commitment, and each statement shall be deemed correct and
conclusively binding on
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Borrower (absent manifest error) unless the Borrower notifies the
Administrative Agent of an error in the statement in writing within thirty (30)
days of the date on which any such statement is provided to the Borrower.
12.5 Notices. All notices, requests, demands, directions and other
communications (collectively, "notices") required under the provisions of this
Agreement or any other Loan Document shall be in writing (including
communication by facsimile transmission) unless otherwise expressly permitted
hereunder and shall be sent by hand, by registered or certified mail (return
receipt requested), by overnight courier service (maintaining records of
receipt) or by facsimile transmission with confirmation of receipt, in all cases
with charges prepaid, and any such properly given notice shall be effective upon
the earliest of (i) receipt, (ii) when delivered by hand, (iii) the third
Business Day after being mailed, (iv) the following Business Day if sent by
overnight courier service or (v) upon transmission when sent by facsimile. All
notices shall be addressed as follows:
If to any Loan Party, to the Notice Address set forth on Schedule 1,
with copies, if any, as set forth on Schedule 1.
If to Administrative Agent:
General Electric Capital Corporation
55 Federal Road
Danbury, Connecticut 06810
Attention: TFS Portfolio Manager
Telecopy: (203) 796-2830
With a copy to: General Electric Capital Corporation
501 Corporate Center Drive
Suite 600
Franklin, Tennessee 37067
Attention: Corporate Counsel
Telecopy: (615) 771-6187
If to a Lender, to the Notice Address set forth on Annex I or in the
Assignment Agreement by which it became a Lender.
All notices shall be sent to the applicable party at the address stated
above or in accordance with the last unrevoked written direction from such party
to the other party hereto, given in accordance with the terms hereof. The giving
of any notice required hereunder may be waived in writing by the party entitled
to receive such notice.
12.6 FCC and PUC Approval. The exercise of any rights or remedies
hereunder or under any other Loan Document by the Administrative Agent or any
Lender that may require FCC or PUC approval shall be subject to obtaining such
approval. Pending the receipt of any PUC or FCC approval, no Loan Party shall
delay, hinder, interfere with or obstruct the exercise of the Administrative
Agent's or the Lenders' rights or remedies hereunder or the obtaining of such
approvals.
12.7 Lenders Sole Beneficiary. All conditions of the obligation of the
Lenders to make any Advances hereunder are imposed solely and exclusively for
the benefit of the Lenders and their respective assigns; no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that any Lender will refuse to make any
Advances in the absence of strict compliance with any or all such conditions;
and no other Person shall under any circumstances be
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deemed to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by the Lenders at any time if, in their sole
discretion, the Lenders deem it advisable to do so. Each Lender's sole
obligation hereunder is to make the Advances if and to the extent required by
this Agreement or any other Loan Document.
12.8 Lender's Review of Information. Each Loan Party acknowledges and
agrees that any review or analysis by the Administrative Agent or any Lender of
financial information, operating information, marketing data or other
information provided to the Administrative Agent or such Lender by or on behalf
of such Loan Party at any time is and shall be conducted solely for the
Administrative Agent's and such Lender's benefit and internal use and that
neither the Administrative Agent nor any Lender is under any duty or obligation
to make the results of such review or analysis available to any Loan Party. No
Loan Party is relying, and will not rely, on the Administrative Agent or any
Lender for financial or business advice.
12.9 No Joint Venture. Nothing in this Agreement or any other Loan
Document shall be deemed to constitute any kind of partnership, joint venture or
fiduciary relationship between the Administrative Agent, any Lender or any Loan
Party.
12.10 Severability. The provisions of this Agreement are intended to be
severable. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Agreement or any other Loan Document shall be
prohibited by or invalid under applicable Law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
12.11 Rights Cumulative. All rights, powers and remedies herein given
to the Administrative Agent and the Lenders are cumulative and not alternative
and are in addition to all statutes or rules of law.
12.12 Duration; Survival. All representations and warranties of any
Loan Party contained herein or made in connection herewith shall survive the
making of and shall not be waived by the execution and delivery of this
Agreement and the other Loan Documents, any investigation by the Administrative
Agent or any Lender, or the making of any Advances hereunder. All covenants and
agreements of any Loan Party contained herein shall continue in full force and
effect from and after the date hereof so long as the Borrower may borrow
hereunder and until payment in full of the Loans, interest thereon, all Fees and
all other Obligations of the Borrower. Without limitation, it is understood that
all obligations of Loan Parties to make payments to or indemnify the Lenders
shall survive the payment in full of the Loans and of all other Obligations.
12.13 Governing Law. This Agreement, the Notes and each of the other
Loan Documents shall be governed by and construed and enforced in accordance
with the law of the State of New York, without regard to conflicts of laws
principles (other than Section 5-1401 of the General Obligations Law of the
State of New York), except to the extent that the Law of jurisdictions where the
Collateral is located may be required to apply to the Collateral.
12.14 Counterparts. This Agreement may be executed in any number of
counterparts (by facsimile transmission or otherwise) and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
12.15 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Loan Party,
the Administrative Agent, the Lenders and their
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respective successors and assigns (including, in the case of any Loan Party, a
debtor-in-possession on behalf of such Loan Party), except as otherwise provided
herein or therein. No Loan Party may assign, transfer, hypothecate or otherwise
convey its rights, benefits, obligations or duties hereunder or under any of the
other Loan Documents without the prior express written consent of the
Administrative Agent and the Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Loan Party without the prior express
written consent of the Administrative Agent and the Lenders shall be void. The
terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Loan Party, the Administrative Agent and
the Lenders with respect to the transactions contemplated hereby and no Person
shall be a third-party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
12.16 Disclosures and Confidentiality.
(a) Each Loan Party agrees that it and each of its Affiliates
will obtain the Administrative Agent's written consent before using or
generating any press release, advertisement, publicity materials or other
publication in which the name or logo of the Administrative Agent or any Lender
or any of their Affiliates is used or may be reasonably inferred and will not
distribute any such materials in the absence of such prior written approval.
(b) Each Loan Party agrees that it will not, directly or
indirectly, disclose to any third party the terms of this Agreement or the other
Loan Documents or prior or future correspondence relating thereto, or the
transactions contemplated hereby, or any other information regarding the
Administrative Agent, any Lender or their Affiliates learned by such Loan Party
during the course of negotiation thereof. The term "third party" shall exclude
only the Loan Parties, their Affiliates and their respective attorney(s) and
certified public accountant(s). This Subsection 12.16(b) shall not restrict the
disclosure of information if such disclosure is required by Law, by order of any
court or by the order, rule or regulation of any administrative agency,
including any requirements of the FCC, any PUC or any state or federal
securities commissions (the "Commissions"); provided, however, that, except for
disclosures required by the FCC, any PUC or the Commissions, the Borrower shall
provide the Administrative Agent with advance notice of any such required
disclosure of information so that the Administrative Agent or the applicable
Lender may seek an appropriate protective order and/or waive compliance with
this Subsection 12.16(b). Each Loan Party shall not oppose any action taken by
the Administrative Agent or any Lender to obtain an appropriate protective order
or other reliable assurance that the information will be accorded confidential
treatment. The obligations set forth in this Subsection 12.16(b) shall survive
the termination of this Agreement.
(c) The Administrative Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts the Administrative
Agent or such Lender applies to maintaining the confidentiality of its own
confidential information) to maintain as confidential all confidential
information provided to them by the Loan Parties and designated as confidential
for a period of two (2) years following receipt thereof, except that the
Administrative Agent and each Lender may disclose such information (a) to
Persons employed or engaged by the Administrative Agent or such Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any bona fide assignee or participant or potential assignee
or participant that has agreed to comply with the covenant contained in this
Section 12.16 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (b) above); (c) as required or requested
by any Governmental Authority or reasonably believed by the Administrative Agent
or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, in the opinion of the Administrative
Agent's or such Lender's counsel, required by Law; (e) in connection with the
exercise of any right or remedy under the Loan
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Documents or in connection with any litigation to which the Administrative
Agent or such Lender is a party; or (f) which ceases to be confidential through
no fault of the Administrative Agent or such Lender.
(d) The disclosure of information by any of the Administrative
Agent, the Lenders or Loan Parties will not be restricted under this Agreement
if such information (i) has been or becomes published or is now, or in the
future, in the public domain through (A) no fault of the parties, (B) disclosure
other than unauthorized disclosure by the party to whom the information is
disclosed or (C) disclosure to third parties by the disclosing party without
similar restriction; (ii) is property (other than proposal letters, commitment
letters or other correspondence between the Lenders and the Loan Parties) within
the legitimate possession of the receiving party prior to disclosure hereunder;
(iii) subsequent to disclosure hereunder, is lawfully received from a third
party having rights therein without restriction of the third party's or
receiving party's rights to disseminate the information and without notice of
any restriction against its further disclosure; (iv) is disclosed with the
written approval of the other party; or (v) is or becomes publicly available
free of any obligation to keep it confidential.
(e) Each Loan Party authorizes the Administrative Agent and
each Lender to discuss with and furnish to any Affiliate of the Administrative
Agent or such Lender, any government or self-regulatory agency with jurisdiction
over the Administrative Agent or such Lender, any other Governmental Authority
or, subject to such Person's agreeing to this Section 12.16, any assignee,
successor, participant, successor, or prospective assignee, successor or
participant, all Financial Statements, audit reports and other information
pertaining to such Loan Party and/or its Subsidiaries whether such information
was provided by such Loan Party or prepared or obtained by the Administrative
Agent, the Lenders or third parties. No representation or warranty is made by
the Administrative Agent, the Lenders or any of their employees, officers,
directors or agents to any existing or prospective assignee, successor or
participant regarding any audit reports or other analyses of any Loan Party that
the Administrative Agent or any Lender may distribute, whether such information
was provided by any Loan Party or prepared or obtained by the Administrative
Agent, the Lenders or third parties, nor shall the Administrative Agent, the
Lenders or any of their employees, officers, directors or agents be liable to
any Person receiving a copy of such reports or analyses for any inaccuracy or
omission contained in such reports or analyses or relating thereto.
(f) Every reference in this Agreement to disclosures of any
Loan Party to any Lender or the Administrative Agent (except the Business Plan
and Financial Statements), to the extent that such references refer or are
intended to refer to disclosures at or prior to the execution of this Agreement,
shall be deemed strictly to refer only to written disclosures delivered to the
Administrative Agent or the Lenders concurrently with the execution of this
Agreement and referred to specifically in the Loan Documents. The parties intend
that such disclosures are to be limited to those presented in an orderly manner
at the time of executing this Agreement and are not to be deemed to include
expressly or impliedly any disclosures that previously may have been delivered
from time to time to the Administrative Agent or any Lender, except to the
extent that such previous disclosures are again presented to the Administrative
Agent or such Lender in writing concurrently with the execution of this
Agreement.
12.17 Jurisdiction and Venue. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED
IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK FOR ANY SUIT BROUGHT OR ACTION
COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
OBLIGATIONS AND AGREES NOT TO CONTEST VENUE IN ANY SUCH COURTS. In any such
litigation, each of the Parties hereto waives personal service of any summons,
complaint or other process, and agrees that the service thereof may be made by
certified or registered mail directly to its address provided in accordance with
Section 12.5. The choice of forum set
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forth herein shall not be deemed to preclude the enforcement of any judgment
obtained in such forum or the taking of any action under this Agreement to
enforce the same in any appropriate jurisdiction.
12.18 Jury Waiver. THE PARTIES HERETO HEREBY KNOWINGLY AND WILLINGLY
WAIVE THEIR RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING INVOLVING
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE OBLIGATIONS OR ANY RELATIONSHIP
AMONG THE ADMINISTRATIVE AGENT, THE LENDERS AND ANY LOAN PARTY. EACH OF THE
PARTIES HERETO REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
12.19 Limitation on Liability. NONE OF THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY LOAN PARTY SHALL HAVE ANY LIABILITY UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR SPECIAL, EXEMPLARY,
PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY SORT IN ANY SUIT
BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS AND, EXCEPT TO THE EXTENT PROHIBITED BY LAW, EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY
SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT OTHER THAN ACTUAL DAMAGES.
12.20 Schedules, Exhibits and Annexes. The Schedules, Exhibits and
Annexes attached to this Agreement are an integral part hereof, and are hereby
made a part of this Agreement.
12.21 Agreement to Govern. In case of any conflict between the terms of
this Agreement and any of the other Loan Documents, the terms of this Agreement
shall govern.
12.22 Entire Agreement. This Agreement, the other Loan Documents and
other documents, agreements and certificates executed by the parties
contemporaneously herewith or subsequently hereto constitute the entire
agreement of the parties and supersede all prior understandings and agreements,
written or oral, among the parties hereto relating to the subject matter hereof.
None of the parties hereto is entering into this Agreement in reliance on
statements or representations made by any Person other than as set forth herein
except for the third and fourth paragraphs of the GECC Commitment Letter.
[SIGNATURE PAGE APPEARS ON THE NEXT PAGE.]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Administrative Agent and the Lender
By: /s/ L W Middleton
----------------------------------
Name: L W MIDDLETON
Title: ATT. SECRETARY
US XCHANGE FINANCE COMPANY, L.L.C.,
as the Borrower
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
US XCHANGE, L.L.C., as a Guarantor
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
US XCHANGE OF WISCONSIN, LLC, as a Subsidiary
Guarantor
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
US XCHANGE OF ILLINOIS, L.L.C. as a Subsidiary
Guarantor
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
80
US XCHANGE OF INDIANA, L.L.C, as a Subsidiary
Guarantor
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
US XCHANGE OF MICHIGAN, L.L.C, as a Subsidiary
Guarantor
By: /s/ Richard Postma
----------------------------------
Name: RICHARD POSTMA
Title: CO-CHAIRMAN & CEO
81
ANNEX I
INITIAL COMMITMENTS; ADDRESSES OF LENDERS
General Electric Capital Corporation
Telecom Financial Services
55 Federal Road
Danbury, CT 06810
Attention: Joseph Eichler
Telephone No.: (203) 731-2213
Telecopier No.: (203) 830-6719
Commitment: $50,000,000