Exhibit 4.1
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EXECUTION COPY
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CREDIT AGREEMENT
dated as of
April 16, 2002
among
McLEODUSA INCORPORATED
The Lenders Party Hereto
and
JPMORGAN CHASE BANK,
as Agent
_______________________________
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Lead Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Classification of Loans and Borrowings...................................................35
SECTION 1.03. Terms Generally..........................................................................35
SECTION 1.04. Accounting Terms; GAAP...................................................................35
ARTICLE II
The Credits
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SECTION 2.01. Commitments..............................................................................36
SECTION 2.02. Loans and Borrowings.....................................................................36
SECTION 2.03. Requests for Borrowings..................................................................37
SECTION 2.04. [Intentionally Omitted]...................................................................38
SECTION 2.05. Letters of Credit........................................................................38
SECTION 2.06. Funding of Borrowings....................................................................44
SECTION 2.07. Interest Elections.......................................................................44
SECTION 2.08. Termination and Reduction of Commitments.................................................46
SECTION 2.09. Repayment of Loans; Evidence of Debt.....................................................47
SECTION 2.10. [Intentionally Omitted]...................................................................48
SECTION 2.11. Prepayment of Loans......................................................................48
SECTION 2.12. Fees.....................................................................................49
SECTION 2.13. Interest.................................................................................51
SECTION 2.14. Alternate Rate of Interest...............................................................52
SECTION 2.15. Increased Costs..........................................................................52
SECTION 2.16. Break Funding Payments...................................................................54
SECTION 2.17. Taxes....................................................................................55
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..............................56
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...........................................58
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers.....................................................................60
SECTION 3.02. Authorization; Enforceability............................................................60
SECTION 3.03. Governmental Approvals; No Conflicts.....................................................60
SECTION 3.04. Financial Condition; No Material Adverse Change..........................................61
SECTION 3.05. Properties...............................................................................61
SECTION 3.06. Litigation and Environmental Matters.....................................................62
SECTION 3.07. Compliance with Laws and Agreements......................................................63
SECTION 3.08. Investment and Holding Company Status....................................................63
SECTION 3.09. Taxes....................................................................................63
SECTION 3.10. ERISA....................................................................................63
SECTION 3.11. Disclosure...............................................................................64
SECTION 3.12. Subsidiaries.............................................................................64
SECTION 3.13. Insurance................................................................................64
SECTION 3.14. Labor Matters............................................................................64
SECTION 3.15. Security Interests.......................................................................65
SECTION 3.16. FCC Compliance...........................................................................66
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date...........................................................................67
SECTION 4.02. Each Credit Event........................................................................70
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Financial Statements and Other Information...............................................71
SECTION 5.02. Notices of Material Events...............................................................73
SECTION 5.03. Information Regarding Collateral.........................................................73
SECTION 5.04. Existence; Conduct of Business...........................................................74
SECTION 5.05. Payment of Obligations...................................................................74
SECTION 5.06. Maintenance of Properties................................................................74
SECTION 5.07. Insurance................................................................................75
SECTION 5.08. Casualty and Condemnation................................................................75
SECTION 5.09. Books and Records; Inspection and Audit Rights...........................................75
SECTION 5.10. Compliance with Laws.....................................................................75
SECTION 5.11. Use of Proceeds and Letters of Credit....................................................76
SECTION 5.12. Additional Subsidiaries..................................................................76
SECTION 5.13. Further Assurances.......................................................................76
ARTICLE VI
Negative Covenants
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SECTION 6.01. Indebtedness of the Borrower; Certain Equity Securities..................................77
SECTION 6.02. Indebtedness of Restricted Subsidiaries..................................................80
SECTION 6.03. Liens....................................................................................81
SECTION 6.04. Sale and Lease-Back Transactions.........................................................82
SECTION 6.05. Fundamental Changes......................................................................83
SECTION 6.06. Investments, Loans, Advances, Guarantees and Acquisitions................................83
SECTION 6.07. Asset Sales..............................................................................85
SECTION 6.08. Hedging Agreements.......................................................................86
SECTION 6.09. Restricted Payments; Certain Payments of Indebtedness....................................86
SECTION 6.10. Transactions with Affiliates.............................................................88
SECTION 6.11. Restrictive Agreements...................................................................89
SECTION 6.12. Amendment of Material Documents..........................................................89
SECTION 6.13. Leverage Ratio...........................................................................90
SECTION 6.14. Capital Expenditure Limitation...........................................................90
SECTION 6.15. [Intentionally Omitted]...................................................................90
SECTION 6.16. Minimum Access Lines in Service..........................................................90
SECTION 6.17. Interest Expense Coverage Ratio..........................................................91
SECTION 6.18. Minimum Consolidated Revenue.............................................................91
SECTION 6.19. Designation of Unrestricted Subsidiaries.................................................91
ARTICLE VII
Events of Default
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ARTICLE VIII
The Administrative Agent
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ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices.................................................................................100
SECTION 9.02. Waivers; Amendments.....................................................................100
SECTION 9.03. Expenses; Indemnity; Damage Waiver......................................................102
SECTION 9.04. Successors and Assigns..................................................................105
SECTION 9.05. Survival................................................................................108
SECTION 9.06. Counterparts; Integration; Effectiveness................................................109
SECTION 9.07. Severability............................................................................109
SECTION 9.08. Right of Setoff.........................................................................109
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process..............................110
SECTION 9.10. WAIVER OF JURY TRIAL....................................................................111
SECTION 9.11. Headings................................................................................111
SECTION 9.12. Confidentiality.........................................................................111
SECTION 9.13. Interest Rate Limitation................................................................112
SECTION 9.14. Special Funding Option..................................................................112
SECTION 9.15. Release of Subsidiaries.................................................................115
SECTION 9.16. Effingham Sale/Leaseback................................................................115
SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 2.11(c) -- Non-Core Assets
Schedule 3.03 -- Governmental Approvals, etc.
Schedule 3.05 -- Mortgaged Properties
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.15 -- Mortgage Filing Offices
Schedule 6.01(a) -- Existing Indebtedness of the Borrower
Schedule 6.02 -- Existing Subsidiary Indebtedness
Schedule 6.03 -- Existing Liens
Schedule 6.06 -- Existing Investments
Schedule 6.10 -- Existing Affiliate Transactions
Schedule 6.11 -- Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Skadden, Arps, Slate,
Meagher & Flom (Illinois)
Exhibit B-2 -- Form of Opinion of Vice President, General
Counsel & Secretary of the Borrower
Exhibit B-3 -- Form of Opinion of Regulatory Counsel
Exhibit B-4 -- Form of Opinion of Local IA Counsel
Exhibit B-5 -- Form of Opinion of Local AZ Counsel
Exhibit B-6 -- Form of Opinion of Local SD Counsel
Exhibit B-7 -- Form of Opinion of Local WA Counsel
Exhibit C -- Form of Subsidiary Guarantee Agreement
Exhibit D -- Form of Pledge Agreement
Exhibit E -- Form of Security Agreement
Exhibit F -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit G -- Form of Promissory Note
Exhibit H -- Form of Mortgage
Exhibit I -- Form of Perfection Certificate
CREDIT AGREEMENT dated as of April 16, 2002
among McLEODUSA INCORPORATED, the LENDERS party hereto,
and JPMORGAN CHASE BANK, as Administrative Agent and
Collateral Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Access Lines in Service" means, at any time, the number of
distinct customer service lines maintained by the Borrower and its
Subsidiaries at such time.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Agent" means JPMorgan Chase Bank, in its capacities as
Administrative Agent and Collateral Agent.
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change
in the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective from and including the effective date
of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Commitment Fee Rate" means, with respect to the
commitment fee payable pursuant to Section 2.12(a), a rate per annum equal to
(x) 1.00% for each day on which Usage is less than 25.0%, (y) 0.75% for each
day on which Usage is equal to or greater than 25.0% but less than or equal
to 50.0% and (z) 0.50% for each day on which Usage is greater than 50.0%. For
purposes of the foregoing, "Usage" means, on any date, the percentage
obtained by dividing (i) the aggregate Revolving Exposure on such date by
(ii) the aggregate Commitments on such date.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Applicable Percentages
shall be determined based upon the Commitments most recently in effect,
giving effect to any assignments.
"Applicable Rate" means, for any day with respect to any Loan, the
applicable rate per annum set forth below under the applicable caption based
upon the ratings established by Moody's and S&P for the Index Debt.
Level Ratings LIBOR Spread ABR Spread
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V > =BBB-/Baa3 2.00% 1.00%
IV BB+/Ba1 2.50% 1.50%
III BB/Ba2 3.00% 2.00%
II BB-/Ba3 3.25% 2.25%
I < BB-/Ba3 3.50% 2.50%
For purposes of the foregoing, (a) each change in the Applicable
Rate resulting from a publicly announced change in the ratings shall be
effective, in the case of an upgrade, during the period commencing on and
including the date of delivery to the Administrative Agent of written
notification thereof from the Borrower and ending on the date immediately
preceding the effective date of the next such change and, in the case of a
downgrade, during the period commencing on and including the date of public
announcement thereof and ending on the date immediately preceding the
effective date of the next such change, (b) in the event the ratings
established by Moody's and S&P fall within different Levels, interest rate
spreads shall be based on the lower of the two ratings unless the different
ratings are two or more Levels apart, in which case interest rate spreads
will be based on a rating one Level above the lower of the two ratings and
(c) if neither Moody's nor S&P maintains a rating for the Index Debt, the
ratings shall be deemed to be in Level I. If the rating system of Moody's or
S&P shall change, or if either of them shall cease rating the Index Debt
(other than by reason of any action or nonaction by the Borrower following or
in anticipation of a ratings downgrade), the Borrower and the Administrative
Agent shall negotiate in good faith to amend (with the consent of the
Required Lenders) the references to specific ratings in this definition
(including by way of substituting another rating agency mutually acceptable
to the Borrower and the Administrative Agent for the rating agency with
respect to which the rating system has changed or for which no rating is then
in effect) to reflect such changed rating system or the nonavailability of
ratings from such rating agency, and pending agreement on such amendment, the
rating in effect immediately prior to such change or cessation will apply. If
any rating agency shall not have a rating in effect by reason of any action
or nonaction by the Borrower following or in anticipation of a ratings
downgrade, then such rating agency shall be deemed to have established a
rating in Level I.
"Assessment Rate" means, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R.
Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; provided that if,
as a result of any change in any law, rule or regulation, it is no longer
possible to determine the Assessment Rate as aforesaid, then the Assessment
Rate shall be such annual rate as shall be determined by the Administrative
Agent to be representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Attributable Debt" means, on any date, in respect of any lease of
the Borrower or any Restricted Subsidiary entered into as part of a sale and
leaseback transaction subject to Section 6.04, (i) if such lease is a Capital
Lease Obligation, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with
GAAP, and (ii) if such lease is not a Capital Lease Obligation, the
capitalized amount of the remaining lease payments under such lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a Capital Lease
Obligation.
"Available Commitments" means, as of any date, the total
Commitments less the "LC Exposure" (as defined in the Existing Credit
Agreement) outstanding as of such date, if any, under the Existing Credit
Agreement.
"Bankruptcy Court" means the United States Bankruptcy Court for
the District in which any Bankruptcy Proceeding is pending.
"Bankruptcy Proceeding" means a voluntary or involuntary case
commenced in respect of (i) the Borrower or (ii) the Borrower and one or more
Subsidiaries of the Borrower under Chapter 11 or Chapter 7 of the United
States Bankruptcy Code 11 U.S.C. ss.101, et seq. (the "Bankruptcy Code");
provided that any such proceeding shall cease to be a Bankruptcy Proceeding
for purposes of this definition if in connection with such proceeding any of
the following requirements is not or ceases to be satisfied: (a) the order
for relief is entered not later than 20 days after commencement of the case,
(b) in the event a post-petition solicitation is to be undertaken in respect
of holders of any claims or interests of any class impaired by the
Reorganization Plan, the Bankruptcy Court shall have entered an order on or
prior to June 1, 2002 approving a disclosure statement to solicit acceptances
of the Reorganization Plan from such holders, (c) the Reorganization Plan
shall have been substantially consummated not later than August 1, 2002, and
(d) the Borrower is continuing in good faith to seek consummation of the
Restructuring.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Board of Directors" means the Board of Directors of the
Borrower, or any committee thereof duly authorized to act on behalf of the
Board of Directors.
"Borrower" means McLeodUSA Incorporated, a Delaware corporation.
"Borrowing" means Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed; provided that, when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day
on which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Expenditures" means, for any period and without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures of Borrower and the Restricted Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP and (b) Capital
Lease Obligations incurred by the Borrower and the Restricted Subsidiaries
during such period.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of
a corporation, any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants, rights or options to purchase
or subscribe for any of the foregoing, or any warrants, rights or options to
purchase or subscribe for any such warrants, rights or options.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law,
rule or regulation or in the interpreta tion or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by
any lending office of such Lender or by such Lender's or the Issuing Bank's
holding company, if any) with any request, guideline or directive (whether
or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Change of Control" means (i) the sale, conveyance, transfer or
lease of all or substantially all of the assets of the Borrower to any
"Person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2)
of the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(i) under the
Exchange Act), other than any Permitted Holder or any Restricted
Subsidiary; (ii) any "Person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule
13d- 5(b)(i) under the Exchange Act), other than any Permitted Holder,
becoming the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 35% of the total voting power of all classes of
the Voting Stock of the Borrower (including any warrants, options or rights
to acquire such Voting Stock), calculated on a fully diluted basis, and
such voting power percentage is greater than or equal to the total voting
power percentage then beneficially owned by the Permitted Holders in the
aggregate; or (iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any directors whose election or appointment by the Board of
Directors or whose nomination for election by the stockholders of the
Borrower was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
ceasing for any reason to constitute a majority of the Board of Directors
then in office; provided that any event that constitutes a change of
control under any future indenture governing unsecured indebtedness issued
by the Borrower after the date hereof shall also constitute a "Change of
Control" under this Agreement."
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" is defined in the Security Agreement.
"Collateral Agent" means JPMorgan Chase Bank, in its capacity as
collateral agent under the Loan Documents.
"Collateral and Guarantee Requirement" means the requirement that:
(a) the Collateral Agent shall have received (i) from the
Borrower a counterpart of each of the Security Agreement and the Pledge
Agreement duly executed and delivered on behalf of the Borrower and (ii)
from each Subsidiary Loan Party either (A) a counterpart of the Security
Documents required to be executed by it hereunder duly executed and
delivered on behalf of such Loan Party or (B) in the case of any Person
that becomes a Subsidiary Loan Party after the Effective Date, a
supplement to each Security Document required to be executed by it
hereunder, in the form specified therein, duly executed and delivered on
behalf of such Subsidiary Loan Party;
(b) all outstanding Equity Interests of each Subsidiary owned by
or on behalf of any Loan Party shall have been pledged pursuant to the
Pledge Agreement (except that the Loan Parties shall not be required to
pledge more than 65% of the outstanding voting Equity Interests of any
Foreign Subsidiary) and the Agent shall have received certificates or
other instruments representing all such Equity Interests, together with
stock powers or other instruments of transfer with respect thereto
endorsed in blank;
(c) Each promissory note evidencing any Indebtedness of the
Borrower or any Subsidiary that is owing to any Loan Party (other than
promissory notes issued by Illinois Consolidated Telephone Company and
listed on Schedule 6.02) shall have been pledged pursuant to the Pledge
Agreement and the Agent shall have received all such promissory notes,
together with instruments of transfer with respect thereto endorsed in
blank;
(d) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the
Agent to be filed, registered or recorded to create the Liens intended to
be created by the Security Documents and perfect such Liens to the extent
required by, and with the priority required by, the Security Documents,
shall have been filed, registered or recorded or delivered to the Agent
for filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts of
a Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner of such Mortgaged Property, (ii) a policy
or policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each such Mortgage as a valid first
Lien on the Mortgaged Property described therein, free of any other Liens
except as expressly permitted by Section 6.03, together with such
endorsements, coinsurance and reinsurance as the Agent or the Required
Lenders may reasonably request, and (iii) such surveys, abstracts,
appraisals, legal opinions and other documents as the Agent or the Required
Lenders may reasonably request with respect to any such Mortgage or
Mortgaged Property; and
(f) each Loan Party shall have obtained all material consents
and approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a party,
the performance of its obligations thereunder and the granting by it of
the Liens thereunder; provided, that with respect to any Person that
becomes a Subsidiary Loan Party after the date hereof, such Person shall
have until the 120th day after such Person becomes a Subsidiary Loan
Party to obtain any approvals that are required by this clause (f) and
that cannot reasonably be obtained at or before the time such Person
becomes a Subsidiary Loan Party.
"Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Loans and to acquire participations in Letters
of Credit hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender's
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Lenders' Commitments is
$110,000,000; provided that the Borrower may arrange for one or more banks or
other financial institutions (any such bank or other financial institution
being called an "Increasing Lender"), which may include any Lender, to extend
Commitments or increase their existing Commitments (the "Supplemental
Commitments"); provided, however, that the total Supplemental Commitments may
not exceed $50,000,000 in the aggregate). Supplemental Commitments shall
become Commitments under this Agreement pursuant to an amendment (a
"Supplemental Commitment Amendment") to this Agreement, executed by the
Borrower, each Increasing Lender and the Administrative Agent. Any
Supplemental Commitment Amendment executed by the Borrower and the
Administrative Agent may, without the consent of any other Lenders, effect
such amendments to this Agreement as may be necessary or appropriate, in the
opinion of the Borrower and the Administrative Agent, to give effect to the
Supplemental Commitments; provided, however, that no such amendment shall
adversely affect the rights or obligations under this Agreement of any Lender
that is not a party to such amendment; and provided further, however, that a
reduction in a Lender's pro rata portion of the Commitments resulting from
the Supplemental Commitments shall not be deemed an adverse affect with
respect to such Lender for purposes of this definition. Notwithstanding the
foregoing, no Supplemental Commitment Amendment shall become effective
unless, (i) on the date of such increase, the conditions set forth in
paragraphs (a) and (b) of Section 4.02 shall be satisfied and the
Administrative Agent shall have received a certificate to that effect dated
such date and executed by the President, a Vice President or a Financial
Officer of the Borrower, and (ii) the Administrative Agent shall have
received (with sufficient copies for each of the Lenders) documents
consistent with those delivered on the Effective Date under clauses (b) and
(c) of Section 4.01 as to the corporate power and authority of the Borrower
to borrow hereunder after giving effect to such increase.
"Communications Act" means the Communications Act of 1934 and
any similar or successor Federal statute and the rules, regulations and
published policies of the Federal Communications Commission thereunder, all
as amended and as the same may be in effect from time to time.
"Confirmed Plan of Reorganization" means the Plan of
Reorganization of the Borrower dated January 31, 2002, as amended, modified
or supplemented and as confirmed by the Bankruptcy Court by order signed
April 5, 2002.
"Consolidated Cash Interest Expense" means, for any period, the
excess of (a) the sum of (i) the interest expense (including imputed
interest expense in respect of Capital Lease Obligations) of the Borrower
and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, (ii) any interest accrued
during such period in respect of Indebtedness of the Borrower or any
Restricted Subsidiary that is required to be capitalized rather than
included in consolidated interest expense for such period in accordance
with GAAP, (iii) any cash payments made during such period in respect of
obligations referred to in clause (b) below that were amortized or accrued
in a previous period, plus (iv) any cash payments, distributions or
dividends to holders of New Preferred Stock during such period, minus (b)
the sum of (i) to the extent included in such consolidated interest expense
for such period, non-cash amounts attributable to amortization of financing
costs paid in a previous period, plus (ii) to the extent included in such
consolidated interest expense for such period, non-cash amounts
attributable to amortization of debt discounts or accrued interest payable
in kind for such period.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent
deducted in determining such Consolidated Net Income, the sum of (i)
consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) other non-operating expenses and (v) any
extraordinary losses, and minus (b) without duplication and to the extent
included in determining such Consolidated Net Income, (i) any extraordi
nary gains for such period and (ii) any non-operating income.
"Consolidated Net Income" means, for any period, the net income
or loss of the Borrower and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (a) the income of any Person (other than the
Borrower) in which any other Person (other than the Borrower or any
Restricted Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an Equity Interest, except to the
extent of the amount of dividends or other distributions actually paid to
the Borrower or any of the Restricted Subsidiaries during such period, and
(b) the income or loss of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any
Restricted Subsidiary or the date that such Person's assets are acquired by
the Borrower or any Restricted Subsidiary.
"Consolidated Revenue" means, for any period, the revenues of
the Borrower and the Restricted Subsidiaries for such period, excluding any
revenues (i) representing interest or investment income, (ii) representing
dividends or distributions from Unrestricted Subsidiaries and (iii) from
the sale or disposition of businesses, assets (other than in the ordinary
course of business, including sales of network capacity) or investments or
from any Prepayment Event.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. "Controlling" and "Controlled" have meanings correlative
thereto.
"Conversion Proceeds" means an amount deemed for purposes hereof
to have been received by the Borrower at the time of conversion of any
convertible debt securities or preferred stock (other than Non-Cash Pay
Preferred Stock) of the Borrower into common stock or Non-Cash Pay
Preferred Stock of the Borrower equal to the principal amount (or Imputed
Principal Amount, as applicable) of such debt securities or preferred stock
so converted and any accrued and unpaid interest thereon which is forfeited
in connection with such conversion.
"Credit Event" means the occasion of any Borrowing, the
issuance, amendment, renewal or extension of any Letter of Credit or the
occasion of any Supplemental Commitment Amendment becoming effective.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.
"Derivatives Counterparty" means any financial institution,
commodities or stock exchange or clearinghouse with which the Borrower or any
Restricted Subsidiary enters into a derivatives transaction.
"Designated Equity Proceeds Use" means the application of Equity
Proceeds or Conversion Proceeds to any of the following: (i) Restricted
Payments pursuant to stock option plans or other benefit plans for
management or employees of the Borrower and the Restricted Subsidiaries in
excess of $5,000,000 in any twelve-month period and (ii) payments of cash
consideration in connection with Permitted Business Acquisitions pursuant
to Section 6.06(e).
"Disclosed Matters" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.
"Disclosure Statement" means the Disclosure Statement with
respect to the Amended Plan of Reorganization of the Borrower approved by
the Bankruptcy Court by order signed February 28, 2002.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with
Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promul gated or entered into by any Governmental
Authority, relating to the pollution or protection of the environment,
preservation or reclamation of natural resources, the management, release
or threatened release of any Hazardous Material.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any
Restricted Subsidiary or (to the extent that the Borrower or any Restricted
Subsidiary may be liable as a result thereof) any Unrestricted Subsidiary,
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, but
excluding any New Preferred Stock issued by the Borrower.
"Equity Proceeds" means the cash Net Proceeds received by the
Borrower from the issuance and sale of common stock of the Borrower or
Non-Cash Pay Preferred Stock of the Borrower or the conversion of
Indebtedness of the Borrower into common stock of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to
a Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under Title IV
of ERISA with respect to the termination of any Plan; (e) the receipt by
the Borrower or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurocurrency Reserve Requirements" means with respect to any
Lender the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority to which
such Lender is subject and applicable to "Eurocurrency Liabilities", as
such term is defined in Regulation D of the Board, or any similar category
of assets or liabilities relating to eurocurrency fundings. Eurocurrency
Reserve Requirements shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by
the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction
described in clause (a) above and (c) in the case of a Lender or other
recipient of a payment (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any Tax that, but for this clause (c),
would be an Indemnified Tax and (i) is in effect and would apply to amounts
payable to such Lender or other recipient of a payment at the time such
Lender or other recipient of a payment becomes a party to this Agreement
(or designates a new lending office), except to the extent that such Lender
or other recipient of a payment (or its assignor or predecessor Agent, if
any) was entitled, at the time of designation of a new lending office (or
assignment or appointment), to receive such additional amounts from the
Borrower with respect to any Tax pursuant to Section 2.17(a), or (ii) is
attributable to such Person's failure to comply with Section 2.17(e).
"Executive Officer" means the chief executive officer, the
president, the chief financial officer, the chief operating officer, the
secretary or the treasurer of the Borrower.
"Existing Credit Agreement" means the Credit Agreement dated as
of May 31, 2000, as amended, among the Borrower, the lenders party thereto
and JPMorgan Chase Bank, as agent.
"FCC" means the United States Federal Communications Commission.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"FL New Preferred Stock" means the Series B preferred stock of
the Borrower (referred to in the Disclosure Statement as "Director
Preferred Stock") to be held by Forstmann Little, as contemplated by the
Disclosure Statement.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or
any State thereof or the District of Columbia.
"Forstmann Little" means Forstmann Little & Co. or any Affiliate
thereof.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Government Securities" means direct obligations of, or
obligations fully and unconditionally guaranteed or insured by, the United
States of America or any agency or instrumentality thereof.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that
the term Guarantee shall not include endorse ments for collection or deposit
in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrange ment.
"ICTC Assets" means the capital stock of Illinois Consolidated
Telephone Company or substantially all its assets, liabilities and
business, and such other assets of the Borrower and its Subsidiaries as may
be directly related to, and used in and necessary to, the operation of such
business.
"Imputed Principal Amount" means, with respect to any class of
New Preferred Stock, the maximum amount that would be payable upon
mandatory redemption or repurchase of all such New Preferred Stock or, if
no mandatory redemption or repurchase is applicable, the greater of the
issue price or liquidation preference of such New Preferred Stock.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by
such Person, whether or not the Indebtedness secured thereby has been
assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement dated as of May 31, 2000,
as amended and restated as of the date hereof, substantially in the form of
Exhibit F hereto.
"Indentures" means (a) the Indenture dated as of March 4, 1997,
between the Borrower (as successor to McLeod, Inc.) and United States Trust
Company of New York, as Trustee, in respect of $500,000,000 10-1/2% Senior
Discount Notes due 2007, (b) the Indenture dated as of July 21, 1997,
between the Borrower and United States Trust Company of New York, as
Trustee, in respect of $225,000,000 9-1/4% Senior Notes due 2007, (c) the
Indenture dated as of March 16, 1998, between the Borrower and United
States Trust Company of New York, as Trustee, in respect of $300,000,000
83/8% Senior Notes due 2008, (d) the Indenture dated as of October 30,
1998, between the Borrower and United States Trust Company of New York, as
Trustee, in respect of $300,000,000 9 1/2% Senior Notes due 2008, (e) the
Indenture dated as of February 22, 1999, between the Borrower and United
States Trust Company of New York, as Trustee, in respect of $500,000,000
81/8% Senior Notes due 2009, (f) the Indenture dated December 14, 2000,
between the Borrower and United States Trust Company of New York, as
Trustee, in respect of $150,000,000 12% Senior Notes Due 2008, (g) the
Indenture dated December 14, 2000, between the Borrower and United States
Trust Company of New York, as Trustee, with respect to $210,000,000 of 11
1/2% Senior Notes Due 2009, and (h) the Senior Debt Securities Indenture
dated January 15, 2001, between the Borrower and United States Trust
Company of New York, as Trustee, and the First Supplemental Indenture,
dated January 15, 2001, thereunder, with respect to $750,000,000 113/8%
Senior Notes Due 2009.
"Index Debt" means the highest rated senior secured Long-Term
Indebtedness for borrowed money of the Borrower that is not guaranteed by
any Person other than a Loan Party or otherwise credit enhanced.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan,
the last day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three
months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of
such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three
or six months thereafter (or nine or twelve months thereafter if, at the time
of the relevant Borrowing, all Lenders participating therein agree to make an
interest period of such duration available), as the Borrower may elect;
provided, that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such
Borrowing.
"Investment" means purchasing, holding or acquiring (including
pursuant to any merger with any Person that was not a Wholly Owned
Restricted Subsidiary prior to such merger) any Capital Stock, evidences of
indebtedness or other securities (including any option, warrant or other
right to acquire any of the foregoing) of, or making or permitting to exist
any loans or advances (other than commercially reasonable extensions of
trade credit) to, guaranteeing any obligations of, or making or permitting
to exist any investment in, any other Person, or purchasing or otherwise
acquiring (in one transaction or a series of transactions) any assets of
any Person constituting a business unit. The amount, as of any date of
determination, of any Investment shall be the original cost of such
Investment (including any Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary in connection with any
Investment and any Indebtedness assumed in connection with any acquisition
of assets), plus the cost of all additions, as of such date, thereto and
minus the amount, as of such date, of any portion of such Investment repaid
to the investor in cash as a repayment of principal or a return of capital,
as the case may be (except to the extent such repaid amount has been
included in Consolidated Net Income), but without any other adjustments for
increases or decreases in value, or write-ups, write-downs or write- offs
with respect to such Investment. In determining the amount of any
Investment involving a transfer of any property other than cash, such
property shall be valued at its fair market value at the time of such
transfer.
"Issuing Bank" means JPMorgan Chase Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term "Issuing Bank" shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.
"knowledge" means (a) with respect to the Borrower to the
knowledge of any Executive Officer or any Financial Officer of the Borrower
and (b) with respect to any other Loan Party, the chief executive officer,
chief financial officer or chief operating officer of such Loan Party.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b)
the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.
"Lender Affiliate" means (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or
managed by a Lender or an Affiliate of such Lender and (b) with respect to
any Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and similar
extensions of credit and is managed by the same investment advisor as such
lender or by an Affiliate of such investment advisor; provided, that no
entity shall be a "Lender Affiliate" unless such entity is capable of
performing the applicable obligations of a Lender hereunder.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"Leverage Ratio" means, on any date, the ratio of (a) Total Debt
as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower ended on such date (or, if such
date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter of the Borrower most recently ended prior to such date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market), rounded upwards, if necessary, to the nearest
1/100th of a percent, at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.
"License" means any license granted by the FCC or any foreign
telecommunications regulatory body.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case
of securities (other than any capital stock of the Borrower that is subject
to issuance upon the exercise of any purchase option, call or similar right
granted by the Borrower), any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" means this Agreement and the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a
long-term liability.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations or financial condition of the Borrower and
the Restricted Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Administrative Agent, the Collateral
Agent and the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its Restricted
Subsidiaries in an aggregate principal amount exceeding $25,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Borrower or any Restricted Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Restricted
Subsidiary would be required to pay if such Hedging Agreement were terminated
at such time (or is required to pay, if such Hedging Agreement has been
terminated).
"Maturity Date" means May 31, 2007.
"Moody's" means Moody's Investors Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities, and
such ratings business has been transferred to a successor Person, such
successor Person.
"Mortgage" means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on
any Mortgaged Property to secure the Obligations. Each Mortgage shall be in
the form of Exhibit H or otherwise satisfactory in form and substance to the
Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified
as a Mortgaged Property on Schedule 3.05, and includes each other parcel of
real property and improvements thereto with respect to which a Mortgage is
granted pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received
in respect of any non-cash proceeds, but only as and when received, (ii) in
the case of a casualty, insurance proceeds, and (iii) in the case of a
condemnation or similar event, condemnation awards and similar payments,
net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses
paid by the Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a sale,
transfer or other disposition of an asset (including pursuant to a sale and
leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made by the Borrower
and the Restricted Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by a Lien prior and superior to the
Lien granted under the Security Documents in such asset, and (iii) the
amount of all taxes paid (or reasonably estimated to be payable, provided,
that such amounts withheld or estimated for tax payments shall, to the
extent not utilized for the payment of taxes, be deemed to be Net Proceeds)
by the Borrower and the Subsidiaries, and the amount of any reserves
established by the Borrower and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case that are
directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower).
"New Preferred Stock" means any preferred stock (other than
Non-Cash Pay Preferred Stock) issued by the Borrower on or after December
31, 1999 that is (a) not secured by any assets of the Borrower or any
Restricted Subsidiary and (b) not Guaranteed by any Restricted Subsidiary.
"Non-Cash Pay Preferred Stock" means preferred stock of the
Borrower which (i) is not mandatorily redeemable, in whole or part, or
required to be repurchased or reacquired, in whole or in part, by the
Borrower or any Restricted Subsidiary, in either case other than for common
stock of the Borrower, and which does not require any payment of cash
dividends, in each case, prior to the date that is six months after the
Tranche B Maturity Date; provided, however, that any preferred stock which
would constitute Non-Cash Pay Preferred Stock but for provisions thereof
giving holders thereof the right to require the Borrower to repurchase or
redeem such preferred stock upon the occurrence of a change of control
occurring prior to the Tranche B Maturity Date shall constitute Non-Cash
Pay Preferred Stock if the change of control provisions (other than the
purchase price) applicable to such preferred stock are no more favorable to
the holders of such preferred stock than the provisions applicable to the
Loans contained in this Agreement and such preferred stock specifically
provides that the Borrower will not repurchase or redeem any such preferred
stock pursuant to such provisions prior to the Borrower's repayment of the
Loans and LC Disbursements and the termination of all Commitments
hereunder, (ii) is not secured by any assets of the Borrower or any
Restricted Subsidiary, (iii) is not Guaranteed by any Restricted Subsidiary
and (iv) is not exchangeable or convertible into Indebtedness of the
Borrower or any Restricted Subsidiary or any preferred stock (other than
Non-Cash Pay Preferred Stock) of the Borrower or any Subsidiary.
"Non-Core Assets" means the assets and businesses specified on
Schedule 2.11(c) hereto (including the Capital Stock of any Subsidiary
engaged exclusively in any such business or businesses specified on
Schedule 2.11(c) and not owning any assets other than Non-Core Assets),
and, with respect to any business specified on Schedule 2.11(c), such other
assets of the Borrower and its Subsidiaries as may be directly related to,
and used in and necessary to, the operation of such business.
"Obligations" means (i) the due and punctual payment by the
Borrower of (A) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (B) each payment required to be made by the Borrower under this
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (C) all other monetary
obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Borrower to the Secured
Parties under this Agreement or the other Loan Documents, (ii) the due and
punctual performance of all covenants, agreements, obligations and
liabilities of the Borrower and the other Loan Parties under or pursuant to
this Agreement and the other Loan Documents and (iii) the due and punctual
payment and performance of all obligations of any Loan Party under each
Designated Hedging Agreement (as defined in the Security Agreement) entered
into with a counterparty that was a Lender (or an Affiliate of a Lender) at
the time such Designated Hedging Agreement was entered into (or, if later, on
the date of this Agreement).
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes,
charges or levies arising from any payment made under any Loan Document or
from the execution, delivery or enforcement of, or otherwise with respect
to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Exhibit I or any other form approved by the Collateral Agent.
"Permitted Business Acquisition" means any acquisition (by merger
or otherwise) by the Borrower or a Subsidiary Loan Party of all or
substantially all the assets of, or all the Equity Interests in, a Person or
division or line of business of a Person, if (a) immediately after giving
effect thereto, no Default has occurred and is continuing or would result
therefrom, (b) such acquired Person or business is predominately engaged in
one or more Telecommunications Businesses in the United States of America,
(c) each Subsidiary resulting from such acquisition (and which survives such
acquisition) shall be a Subsidiary Loan Party and all the Equity Interests of
each such Subsidiary that are owned directly by the Borrower and/or
Subsidiary Loan Parties shall have been (or within five Business Days or such
longer period as the Agent may allow after such acquisition shall be) pledged
pursuant to the applicable Pledge Agreement (except that with respect to each
acquisition or series of related acquisitions (x) Foreign Subsidiaries (i)
(A) with an aggregate book value of less than 2% of the consolidated total
assets of the Borrower and its Subsidiaries measured as the date (the "Test
Date") of the most recent internal financial statements available for both
the Borrower and the Foreign Subsidiaries prior to the consummation of the
acquisition and (B) the assets of which do not, in the aggregate, represent
more than 20% of the total consideration paid in connection with such
acquisition or (ii) having an aggregate EBITDA for the twelve month period
ending on the Test Date of less than (A) $20 million and (B) 10% of
Consolidated EBITDA of the Borrower and its Subsidiaries for such 12 month
period, shall not be obligated to become Subsidiary Loan Parties and (y) the
Loan Parties shall not be required to pledge more than 65% of the outstanding
voting Equity Interests of any Foreign Subsidiary), (d) the Collateral and
Guarantee Requirement shall have been (or within five Business Days or such
longer period as the Agent may allow after such acquisition shall be)
satisfied with respect to each such Subsidiary, (e) the Borrower and the
Restricted Subsidiaries are in compliance, on a pro forma basis after giving
effect to such acquisition (without giving effect to operating expense
reductions), with the financial covenants contained in Sections 6.13, 6.14,
6.16, 6.17 and 6.18 to the extent then applicable, as if such acquisition had
occurred on the first day of the relevant period for testing compliance, and
(f) the Borrower has delivered to the Agent an officer's certificate to the
effect set forth in clauses (a), (b), (c), (d) and (e) above, together with
all relevant financial information for the Person or assets acquired and
reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in clause (e) above. For purposes of clause (c) of this
definition, a Foreign Subsidiary's EBITDA for any period shall mean the
consolidated net income or loss of such Foreign Subsidiary for such period
determined in accordance with GAAP plus (a) without duplication and to the
extent deducted in determining such consolidated net income, the sum of (i)
consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) other non-operating expenses and (v) any
extraordinary losses, and minus (b) without duplication and to the extent
included in determining such consolidated net income, (i) any extraordinary
gains for such period, and (ii) any non-operating income.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) cash pledges and deposits to secure the performance of bids,
trade contracts, leases, statutory obligations or governmental franchise
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (k) of Article VII;
(f) other liens incidental to the conduct of business or the
ownership of property which do not in the aggregate materially detract from
the value of the Borrower's and its Restricted Subsidiaries' property when
taken as a whole, or materially impair the use thereof in the operation of
their businesses; and
(g) any interest or title of a lessor in the property subject to
any lease other than (A) a capital lease or (B) a lease entered into as
part of a sale and leaseback transaction subject to Section 6.04;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Holders" means (i) Clark E. and Mary E. McLeod and
foundations and trusts controlled by them or either of them, and Affiliates
(other than the Borrower and the Restricted Subsidiaries) of each of the
foregoing and (ii) (x) Forstmann Little & Co., Forstmann Little & Co. Equity
Partnership-V, L.P., Forstmann Little & Co. Equity Partnership-VII, L.P.,
Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership-VI, L.P., Forstmann Little & Co. Subordinated Debt and Equity
Management Buyout Partnership-VII, L.P. and Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership-VIII, L.P. and (y)
any other investment fund Controlled and managed by the same general partner
or investment manager as any of the investment funds referred to in clause (x).
"Permitted Investments" means:
(a) Government Securities maturing, or subject to tender at the
option of the holder thereof, within five years after the date of
acquisition thereof;
(b) time deposits and certificates of deposit of any commercial
bank organized in the United States having capital and surplus in excess
of $500 million or a commercial bank organized under the law of any other
country that is a member of the OECD having total assets in excess of
$500 million (or its foreign currency equivalent at the time) with a
maturity date not more than one year from the date of acquisition;
(c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (a) above
entered into with (x) any bank meeting the qualifications specified in
clause (b) above or (y) any primary government securities dealer
reporting to the Market Reports Division of the Federal Reserve Bank of
New York;
(d) direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing, or subject to tender at the option of
the holder thereof, within 270 days after the date of acquisition
thereof, provided that, at the time of acquisition, the long-term debt of
such state, political subdivision or public instrumentality has a rating
of A (or higher) from S&P or A-2 (or higher) from Moody's (or, if at any
time neither S&P nor Moody's shall be rating such obligations, then an
equivalent rating from such other nationally recognized rating service
acceptable to the Administrative Agent);
(e) commercial paper issued by the parent corporation of any
commercial bank organized in the United States having capital and surplus
in excess of $500 million or a commercial bank organized under the laws
of any other country that is a member of the OECD having total assets in
excess of $500 million (or its foreign currency equivalent at the time),
and commercial paper issued by others having a rating of A-2 or higher
from S&P or a rating of P-2 or higher from Moody's (or, if at any time
neither S&P nor Moody's shall be rating such obligations, then equivalent
ratings from such other nationally recognized rating services acceptable
to the Administrative Agent) and in each case maturing within one year
after the date of acquisition;
(f) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and surplus
in excess of $500 million or a commercial bank organized under the laws
of any other country that is a member of the OECD having total assets in
excess of $500 million (or its foreign currency equivalent at the time);
(g) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus
in excess of $500 million or a commercial bank organized under the laws
of any other country that is a member of the OECD having total assets in
excess of $500 million) or its foreign currency equivalent at the time);
and
(h) investments in money market funds substantially all of whose
assets comprise securities of the types described in clauses (a) through (g).
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, associa tion, company,
partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement dated as of May
31, 2000, as amended and restated as of the date hereof, among the
Borrower, the Subsidiary Loan Parties and the Collateral Agent,
substantially in the form of Exhibit D, which Pledge Agreement amends and
restates (i) the Borrower Pledge Agreement dated as of May 31, 2000 between
and the Borrower and the Collateral Agent and (ii) the Subsidiary Pledge
Agreement dated as of May 31, 2000 among the Subsidiary Loan Parties party
thereto and the Collateral Agent.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to
a sale and leaseback transaction) of any property or asset of the Borrower
or any Restricted Subsidiary, other than (i) dispositions described in
clauses (a) and (b) of Section 6.07 and (ii) other dispositions resulting
in aggregate Net Proceeds not exceeding $5,000,000 during any fiscal year
of the Borrower; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Restricted Subsidiary, but only to
the extent that the Net Proceeds therefrom have not been applied to repair,
restore or replace such property or asset or to purchase Telecommunications
Assets within twelve months after such event.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate
in effect at its principal office in New York City; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.
"Publishing Assets" means the Capital Stock of McLeodUSA Media
Group, Inc. or substantially all its assets, liabilities and business
(including the Capital Stock, assets, business and liabilities of its
direct and indirect Subsidiaries and such other assets of the Borrower and
its Subsidiaries as may be directly related to, and used in and necessary
to, the operation of such business, which other assets shall include
McLeodUSA Technology Building 1 (which currently serves as headquarters for
McLeodUSA Media Group, Inc.).
"Register" has the meaning set forth in Section 9.04.
"Related Fund" means with respect to any Lender that is a fund
that invests in bank loans in the ordinary course of business, any other fund
that invests in bank loans in the ordinary course of business and is advised
or managed by the same investment advisor as such Lender or by an Affiliate
of such investment advisor.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, trustees, partners,
members, officers, employees, agents and advisors of such Person and such
Person's Affiliates.
"Reorganization Consummation Date" means the date of the
substantial consummation (as defined in section 1101 of the Bankruptcy
Code) of a Reorganization Plan of the Borrower that has been confirmed by
an order of the Bankruptcy Court that has not been revoked or stayed and is
otherwise in full force and effect at the time of such substantial
consummation.
"Reorganization Plan" means a plan of reorganization of (i) the
Borrower or (ii) the Borrower and one or more of its Subsidiaries that may
become debtors in a Bankruptcy Proceeding, which plan is in accordance with
Annex I to the Third Amendment.
"Required Lenders" means, at any time, Lenders having aggregate
Revolving Exposures and unused Commitments representing more than 50.0% of
the sum of the total Revolving Exposures and unused Commitments at such time.
"Restricted Payment" means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect
to any Equity Interests in the Borrower or any Restricted Subsidiary, or
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of (i) any Equity
Interests in the Borrower or any Restricted Subsidiary or (ii) any option,
warrant or other right to acquire any such Equity Interests in the Borrower
or any Restricted Subsidiary or (b) any payment to any Derivatives
Counterparty as a result of any change in the market value of any class of
capital stock or other Equity Interests in the Borrower or any Restricted
Subsidiary that is publicly traded (provided, that (i) payments shall be
deemed to have been made to Derivatives Counterparties only to the extent
the cumulative amount of such payments exceeds the cumulative amount of any
payments received by the Borrower and the Restricted Subsidiaries from
Derivatives Counterparties as a result of changes in the market value of
such publicly traded capital stock or other Equity Interests and (ii) it is
understood that the intent of the above language relating to payments to
and from Derivatives Counterparties is to treat transactions entered into
with Derivatives Counterparties as Restricted Payments only if the Borrower
intends such transactions to have substantially the same economic effect as
the dividends, distributions and payments referred to in clause (a) above).
For the avoidance of doubt, the granting of options to purchase common
stock of the Borrower and the issuance of common stock of the Borrower upon
the exercise of such options shall not be deemed a "Restricted Payment."
"Restricted Subsidiary" means (i) each Subsidiary of the
Borrower on the date hereof and (ii) each Subsidiary of the Borrower
organized or acquired after the date hereof that has not been designated an
Unrestricted Subsidiary in accordance with the provisions of Section 6.19.
"Restructuring" means the "Restructuring" as defined in the
Third Amendment.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Maturity
Date and the date of termination of the Commitments.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans
and its LC Exposure at such time.
"S&P" means Standard & Poor's Ratings Services, a division of
McGraw Hill Companies, or, if Standard & Poor's Ratings Group shall cease
rating the specified debt securities, and such ratings business has been
transferred to a successor Person, such successor Person.
"Security Agreement" means the Security Agreement, dated as of
May 31, 2000, as amended and restated as of the date hereof, among the
Borrower, the Subsidiary Loan Parties and the Collateral Agent,
substantially in the form of Exhibit E, which Security Agreement amends and
restates (i) the Borrower Security Agreement dated as of May 31, 2000
between and the Borrower and the Collateral Agent and (ii) the Subsidiary
Security Agreement dated as of May 31, 2000 among the Subsidiary Loan
Parties party thereto and the Collateral Agent.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Subsidiary Guarantee Agreement, the Indemnity, Subrogation
and Contribution Agreement, the Mortgages and each other security agreement
or other instrument or document executed and delivered pursuant to Section
5.12 or 5.13 to secure any of the Obligations.
"Secured Parties" is defined in the Security Agreement.
"Significant Subsidiary" means a Restricted Subsidiary, or any
group of Restricted Subsidiaries, collectively, that would constitute a
"Significant Subsidiary" of the Borrower within the meaning of Rule 1-02
under Regulation S-X promulgated by the Securities and Exchange Commission
as in effect on the date hereof.
"Splitrock" means McLeodUSA Information Services, Inc. (f/k/a
Splitrock Services, Inc.), a Delaware corporation.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
Agreement dated as of May 31, 2000, as amended and restated as of the date
hereof, between the Subsidiary Loan Parties and the Collateral Agent,
substantially in the form of Exhibit C.
"Subsidiary Loan Party" means any Restricted Subsidiary that is
not a Foreign Subsidiary; provided, that Greene County Partners, Inc.,
Midwest Cellular Associates and Illinois Consolidated Telephone Company
shall not be "Subsidiary Loan Parties".
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Telecommunications Assets" means 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" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased wireline or wireless transmission
facilities, (ii) creating, developing, constructing, installing, repairing,
maintaining or marketing communications-related systems, network equipment
and facilities, software and other products, (iii) creating, developing,
producing or marketing audiotext or videotext, (iv) publishing or
distributing telephone (including Internet) directories, whether in paper,
electronic, audio or video format, (v) marketing (including direct marketing
and telemarketing), or (vi) evaluating, participating in or pursuing any
other business that is primarily related to those identified in the foregoing
clauses (i), (ii), (iii), (iv) or (v) above (in the case of clauses (iii),
(iv) and (v), however, in a manner consistent with the Borrower's manner of
business on the Effective Date), and shall, in any event, include all
businesses in which the Borrower or any of its Subsidiaries are engaged on
the Effective Date; provided that the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board of
Directors in accordance with the criteria set forth in clauses (i) through
(vi) above.
"Third Amendment" means the Third Amendment dated as of November
29, 2001, to the Existing Credit Agreement.
"Total Debt" means, on any date, the sum of (a) all Indebtedness
of the Borrower and its Restricted Subsidiaries (including Indebtedness of
Splitrock) that would be reflected as a liability on a consolidated balance
sheet of the Borrower and its Restricted Subsidiaries prepared as of such
date in accordance with GAAP plus (b) the Imputed Principal Amount of any
New Preferred Stock outstanding on such date.
"Tranche B Maturity Date" means the "Tranche B Maturity Date" as
defined in the Existing Credit Agreement.
"Transactions" means the execution, delivery and performance by
each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the LIBO Rate or the
Alternate Base Rate.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower
that has been designated as an Unrestricted Subsidiary by the Borrower
pursuant to and in compliance with Section 6.19. No Unrestricted Subsidiary
may own any Capital Stock of a Restricted Subsidiary.
"Voting Stock" means, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holders
thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to
vote in the election of members of the board of directors or comparable
body of such Person.
"Wholly Owned subsidiary" of any Person shall mean a subsidiary
of such Person of which securities or other ownership interests (except for
directors' qualifying shares and other de minimis amounts of outstanding
securities or ownership interests) representing 100% of the ordinary voting
power and 100% of equity or 100% of the general partnership interests are,
at the time any determination is being made, owned, controlled or held by
such Person or one or more Wholly Owned subsidiaries of such Person or by
such Person and one or more Wholly Owned subsidiaries of such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
mascu line, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed
to include such Person's successors and assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intan gible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
applica tion thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be inter preted on the basis
of GAAP as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
The Credits
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SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender's Revolving Exposure exceeding
such Lender's Applicable Percentage of the Available Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as
part of a Borrowing consisting of Loans of the same Type made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $10,000,000. At the
time that each ABR Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less
than $10,000,000; provided that an ABR Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Available
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Borrowings of more than
one Type may be outstanding at the same time; provided that there shall not
at any time be more than a total of 20 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed Borrowing
or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the Business Day of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a
written Borrowing Request in a form approved by the Administrative Agent and
signed by the Borrower. Each such telephonic and written Borrowing Request
shall be made by a Financial Officer and shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified
with respect to any requested Eurodollar Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. [Intentionally Omitted].
SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time
and from time to time during the Revolving Availability Period. In the
event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered
into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. Such
terms and conditions of any such application shall not, in any event,
contain any operating covenants or restrictions, provide for any collateral
not provided under the Loan Documents or provide for the imposition of fees
(other than customary charges).
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communica tion, if
arrangements for doing so have been approved by the Issuing Bank) to the
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identi fying the Letter of
Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Bank, the Borrower also shall submit a letter of
credit application on the Issuing Bank's standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal
or extension (i) the LC Exposure shall not exceed $20,000,000 and (ii) the
total Revolving Exposures shall not exceed the total Available Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of
any renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires
from the Issuing Bank, a participation in such Letter of Credit equal to
such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to
be refunded to the Borrower for any reason. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, New York City time, on the
date that such LC Disbursement is made, if the Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on
such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon, New York City time,
on (i) the Business Day that the Borrower receives such notice, if such
notice is received prior to 10:00 a.m., New York City time, on the day of
receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such
time on the day of receipt; provided that, if such LC Disbursement is not
less than $10,000,000, the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 that such
payment be financed with an ABR Borrowing in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the Borrower fails
to make such payment when due, the Administrative Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the
Borrower in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from
the Borrower, in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent
that Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests
may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit, or (iv) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Administrative Agent, the
Lenders nor the Issuing Bank, nor any of their Related Parties, shall have
any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to
make any payment there under (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, inter
ruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control
of the Issuing Bank; provided that the foregoing shall not be construed to
excuse the Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Bank's failure
to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court
of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In further ance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or informa tion to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether
the Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and
the Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when
due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account
of the Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of
such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing
Bank. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Bank. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pur suant to Section 2.12(b). From and
after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by
it prior to such replacement, but shall not be required to issue additional
Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence of any Event
of Default with respect to the Borrower described in clause (h) or (i) of
Article VII. Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits in readily
marketable Permitted Investments maturing in not more than 60 days, which
investments shall be made at the direction of the Borrower and at the
Borrower's risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Lenders with LC Exposure representing greater
than 50% of the total LC Exposure), be applied to satisfy other obligations
of the Borrower under this Agreement or the other Loan Documents. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived. If the
Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time,
to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower maintained with
the Administrative Agent in New York City and designated by the Borrower in
the applicable Borrowing Request; provided that ABR Loans made to finance
the reimbursement of an LC Disbursement as provided in Section 2.05(e)
shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of
such Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans.
If such Lender pays such amount to the Admini strative Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in
the case of a Eurodollar Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request. Thereafter, the Borrower may elect
to convert such Borrowing to a different Type or to continue such Borrowing
and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in
which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each
such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid
as provided herein, at the end of such Interest Period such Borrowing shall
be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies
the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing (except for a Eurodollar Borrowing with an Interest Period of one
month) and (ii) unless repaid, each Eurodollar Borrowing shall be continued
as a Eurodollar Borrowing with an Interest Period of one month at the end
of the Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $10,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.11, the sum
of the Revolving Exposures would exceed the total Available Commitments.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of
any Prepayment Event, immediately after such Net Proceeds are received the
Commitments shall be permanently reduced by an aggregate amount equal to
such Net Proceeds; provided that, notwithstanding the foregoing, no
reduction of the Commitments shall be required pursuant to this paragraph
in the case of any Net Proceeds received by or on behalf of the Borrower or
any Subsidiary in respect of any sale, transfer or other disposition of (i)
the Publishing Assets, (ii) the ICTC Assets or (iii) any Non- Core Assets.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required reduction of the Commitments under paragraph (c) of
this Section, at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by the Borrower pursuant to this Section shall be irrevocable; provided that
a notice of termination of the Commitments delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by
notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Loan of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof
and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and
each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans and LC Disbursements in accordance with
the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns)
and in a form approved by the Administrative Agent. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one
or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its registered assigns).
SECTION 2.10. [Intentionally Omitted].
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to the requirements of this Section.
(b) In the event and on such occasion that the sum of the
Revolving Exposures exceeds the total Available Commitments, the Borrower
shall prepay Borrowings (or, if no such Borrowings are outstanding, deposit
cash collateral in an account with the Administrative Agent pursuant to
Section 2.05(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary in respect of
any Prepayment Event, the Borrower shall, immediately after such Net
Proceeds are received, (i) first, prepay Borrowings in an aggregate amount
equal to such Net Proceeds and (ii) second, to the extent of any remaining
Net Proceeds, apply such remaining Net Proceeds as required by Section
2.11(c) of the Existing Credit Agreement; provided that, notwithstanding
the foregoing, no prepayment of Borrowings shall be required pursuant to
this paragraph in the case of any Net Proceeds received by or on behalf of
the Borrower or any Subsidiary in respect of any sale, transfer or other
disposition of (i) the Publishing Assets, (ii) the ICTC Assets or (iii) any
Non-Core Assets.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (e) of this Section.
(e) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the Business Day of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of
each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.08(d).
Promptly following receipt of any such notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except
as necessary to apply fully the required amount of a mandatory prepayment.
Each prepayment of a Borrowing shall be applied ratably to the Loans included
in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Appli cable Commitment Fee Rate on the average daily
unused amount of the Commitment of such Lender during the period from and
including the date hereof to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears
on the last day of March, June, September and December of each year and on
the date on which the applicable Commitment terminates, commencing on the
first such date to occur after the date hereof. All commitment fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees with respect to
Commitments, a Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Loans and LC Exposure of such Lender.
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same
Applicable Rate as interest on Eurodollar Loans on the average daily amount
of such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at
the rate or rates per annum equal to 0.25% per annum (or such other rate as
may be separately agreed upon between the Borrower and the Issuing Bank) on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any
LC Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following
such last day, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to
the Issuing Bank pursuant to this paragraph shall be payable within 10 days
after demand. All participation fees and fronting fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administra tive Agent, for
its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in the
case of commit ment fees and participation fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon
acceleration or other wise, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to
such Loan as provided in the preceding paragraphs of this Section or (ii)
in the case of any other amount, 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
prior to the end of the Revolving Availa bility Period), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of any conversion of
any Eurodollar Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate or LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the LIBO Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and
the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Admini strative Agent notifies the Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to,
or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Lender shall give
notice to the Administrative Agent and the Borrower at any time to the
effect that Eurocurrency Reserve Requirements are, or are scheduled to
become, effective and that such Lender is or will be generally subject to
such Eurocurrency Reserve Requirements as a result of which such Lender
will incur additional costs, then such Lender shall, for each day from the
later of the date of such notice and the date on which such Eurocurrency
Reserve Requirements become effective, be entitled to additional interest
on each Eurodollar Loan made by it at a rate per annum determined for such
day (rounded upward to the nearest 100th of 1%) equal to the remainder
obtained by subtracting (i) the LIBO Rate for such Eurodollar Loan from
(ii) the rate obtained by dividing such LIBO Rate by a percentage equal to
100% minus the then-applicable Eurocurrency Reserve Requirements. Such
additional interest will be payable in arrears to the Administrative Agent,
for the account of such Lender, on each Interest Payment Date relating to
such Eurodollar Loan and on any other date when interest is required to be
paid hereunder with respect to such Loan. Any Lender which gives a notice
under this paragraph (a) shall promptly withdraw such notice (by written
notice of withdrawal given to the Administrative Agent and the Borrower) in
the event Eurocur rency Reserve Requirements cease to apply to it or the
circumstances giving rise to such notice otherwise cease to exist.
(b) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve Eurocurrency Reserve Requirement) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Euro dollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost
to such Lender or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise), then the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered.
This Section 2.15(b) shall not apply to any additional costs or reductions
relating to Taxes, which are governed by Section 2.17.
(c) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital
or on the capital of such Lender's or the Issuing Bank's holding company,
if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender
or the Issuing Bank or such Lender's or the Issuing Bank's holding company
could have achieved but for such Change in Law (taking into considera tion
such Lender's or the Issuing Bank's policies and the policies of such
Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company for any such reduction suffered.
(d) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph
(a), (b) or (c) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within 10 days after receipt thereof.
(e) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compen
sate a Lender or the Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date
that such Lender or the Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender's or the Issuing Bank's intention to claim
compensation therefor; provided further that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the 180-day
period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(e) and is revoked in accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued
on the principal amount of such Loan had such event not occurred, at the
LIBO Rate (excluding any Applicable Margin) that would have been applicable
to such Loan, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other
banks in the Eurodollar market. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case
may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with appli cable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administra tive Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender
or the Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the
Administrative Agent; provided, however, that in no case shall the Borrower
be required to deliver documentation not normally issued by such
Governmental Authority.
(e) Any Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed
by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as
will permit such payments to be made without withholding or at a reduced
rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable
under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly
required hereunder or under such other Loan Document for such payment (or,
if no such time is expressly required, prior to 1:00 p.m., New York City
time), on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date
may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative
Agent at its offices at 270 Park Avenue, New York, New York, except
payments to be made directly to the Issuing Bank as expressly provided
herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and
9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment under any Loan
Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Loan Document
shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal, unreimbursed LC Disburse ments, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to
such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting
in such Lender receiving payment of a greater proportion of the aggregate
amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Loans and participations in LC Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than
to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute
to the Lenders or the Issuing Bank, as the case may be, the amount due. In
such event, if the Borrower has not in fact made such payment, then each of
the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forth with on demand the amount so
distributed to such Lender or Issuing Bank with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater
of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests compensation under Section 2.15 (other than paragraph
(a) of such Section), or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another
of its offices, branches or affiliates, if, in the judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15
(other than paragraph (a) of such Section), or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.17, or if any Lender
defaults in its obligation to fund Loans hereunder, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that
(i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Commitment is being assigned, the Issuing
Bank), which consent shall not unrea sonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal
of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that as of
the Effective Date and at the time of each Credit Event:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Restricted Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions to
be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such
Loan Party, will constitute, a legal, valid and binding obligation of the
Borrower or such Loan Party (as the case may be), enforce able in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except
such as have been obtained or made and are in full force and effect and
except those set forth on Schedule 3.03 (the failure of which to be
obtained could not reasonably be expected to result in a Material Adverse
Effect) and filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the Borrower or any
of its Subsidiaries or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, or any material
agreement or other material instrument binding upon the Borrower or any of
its Subsi diaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries,
and (d) will not result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Restricted Subsidiaries, except Liens
created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows
as of and for the fiscal year ended December 31, 2001, reported on by
Arthur Andersen LLP, independent public accountants. Such financial
statements present fairly, in all material respects, the financial position
and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii)
above.
(b) Since December 31, 2001, there has been no material adverse
change in the business, assets, operations or financial condition of the
Borrower and its Restricted Subsidiaries, taken as a whole, other than such
changes which customarily occur as a result of events leading up to and
following the commencement of a proceeding under Chapter 11 of the Bankruptcy
Code and the commencement of the Chapter 11 cases of the Borrower and any of
its Subsidiaries in the Bankruptcy Court (including, without limitation,
those reflected in the financial projections heretofore made available to the
Lenders).
SECTION 3.05. Properties. (a) Each of the Borrower and its
Restricted Subsidiaries has good title to, or valid leasehold interests in,
all its real and personal property material to the business (including its
Mortgaged Properties) of the Borrower and its Restricted Subsidiaries taken
as a whole, except for defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and its Restricted Subsidiaries owns,
or is licensed to use, all trademarks, trade names, copyrights, patents and
other intellectual property material to its business, and the use thereof
by the Borrower and its Restricted Subsidiaries does not to the knowledge
of the Borrower infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Except for the Mortgaged Properties, the real properties
identified in Schedule 6.03 and real properties subject to Liens permitted
under Section 6.03(v), there are no (i) real properties owned by the
Borrower with an individual fair market value (including fixtures and
improvements) that exceeds $1,500,000 or (ii) real properties owned by any
Restricted Subsidiary with an individual fair market value (including
fixtures and improvements) that exceeds $5,000,000.
(d) As of the Effective Date, neither the Borrower nor any of
its Restricted Subsidiaries has received notice of, or has knowledge of,
any pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation.
Neither any Mortgaged Property nor any interest therein is subject to any
right of first refusal, option or other contractual right to purchase such
Mortgaged Property or interest therein except in connection with sales and
other dispositions permitted hereunder.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Restricted Subsidiaries (i) that could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that involve any of the Loan Documents or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, none of the
Borrower, the Restricted Subsidiaries or (to the extent that the Borrower
or any Restricted Subsidiary may be liable as a result thereof) the
Unrestricted Subsidiaries, (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agree ments. Each of the
Borrower and its Restricted Subsidiaries is in compliance with (a) all
laws, regulations and orders of any Governmental Authority applicable to it
or its property and (b) all indentures, agreements and other instruments
binding upon it or its property, except, in the case of clause (a) and
clause (b), where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Restricted Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment
Company Act of 1940 or (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower, the Restricted
Subsidiaries and (to the extent that the Borrower or any Restricted
Subsidiary may be liable as a result thereof) the Unrestricted Subsidiaries
has timely filed or caused to be filed all Tax returns and reports required
to have been filed and has paid or caused to be paid all Taxes required to
have been paid by it, except (a) any Taxes that are being contested in good
faith by appropriate proceedings and for which the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan by an amount
that could reasonably be expected to result in a Material Adverse Effect, and
the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of
the assets of all such underfunded Plans by an amount that could reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.11. Disclosure. As of the Effective Date the Borrower
has disclosed to the Lenders (a) all material agreements, material
instruments and material corporate or other restrictions to which the
Borrower or any of its Restricted Subsidiaries is subject and (b) all other
matters known to any of them, that, in the case of this clause (b),
individually or in the aggregate, could reasonably be expected to result in
a Material Adverse Effect. None of the reports, financial statements,
certificates or other information that has been prepared by any Loan Party
or on its behalf (and by or under the direction of any officer of any Loan
Party) and furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or
thereunder (as of the date thereof as modified or supple mented by other
information so furnished when taken as a whole) contains any material
misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected
financial information, the Borrower represents only that such information
was prepared in good faith based upon assumptions believed to be reasonable
at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary of the
Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Effective Date.
SECTION 3.13. Insurance. The Borrower believes that the
insurance maintained by or on behalf of the Borrower and its Restricted
Subsidiaries is adequate. All premiums in respect of any such insurance
that is material have been paid to the extent due.
SECTION 3.14. Labor Matters. As of the Effective Date, there are
no strikes, lockouts or slowdowns against the Borrower or any Restricted
Subsidiary pending or, to the knowledge of the Borrower, threatened. The
hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such
matters, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect. All payments due from the Borrower or
any Restricted Subsidiary, or for which any claim may be made against the
Borrower or any Restricted Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as
a liability on the books of the Borrower or such Restricted Subsidiary in
accordance with GAAP. The consummation of the Transactions will not give rise
to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any
Restricted Subsidiary is bound.
SECTION 3.15. Security Interests. (a) When executed and
delivered, the Pledge Agreement will be effective to create in favor of the
Agent for the ratable benefit of the Secured Parties a valid and
enforceable security interest in the Collateral (as defined in the Pledge
Agreement) and, when the portion of the Collateral constituting
certificated securities (as defined in the Uniform Commercial Code) is
delivered to the Collateral Agent thereunder together with instruments of
transfer duly endorsed in blank, the Liens granted pursuant to the Pledge
Agreement shall constitute fully perfected first priority Liens on, and
security interests in, all right, title and interest of the pledgors
thereunder in such Collateral, prior and superior in right to any other
Person.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent for the ratable benefit of the Secured Parties a valid
and enforceable security interest in the Collateral and, when financing
statements in appropriate form are filed in the offices specified in the
Perfection Certificate, the Liens granted under the Security Agreement
shall constitute fully perfected Liens on, and security interests in, all
right, title and interest of the grantors thereunder in such Collateral, to
the extent perfection can be obtained by filing Uniform Commercial Code
financing statements, other than the Intellectual Property (as defined in
the Security Agreement), in which a security interest may be perfected by
filing, recording or registering a security agreement, financing statement
or analogous document in the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person to the extent perfection can be
obtained by filing Uniform Commercial Code financing statements, other than
with respect to the rights of Persons pursuant to Liens expressly permitted
by Section 6.03.
(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the
security interests created thereunder shall constitute a fully perfected
Liens on, and security interests in, all right, title and interest of the
Loan Parties in the Intellectual Property (as defined in such Security
Agreement) in which a security interest may be perfected by filing, recording
or registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, in each case prior and superior in
right to any other Person, other than with respect to the rights of Persons
pursuant to Liens expressly permitted by Section 6.03 (it being understood
that subsequent recordings in the United States Patent and Trademark Office
and the United States Copyright Office may be necessary to perfect a lien on
registered trademarks, trademark applications and copyrights acquired by the
Loan Parties after the date hereof).
(d) The Mortgages are effective to create, subject to the
exceptions listed in each title insurance policy covering such Mortgage, in
favor of the Agent for the ratable benefit of the Secured Parties a legal,
valid and enforceable Lien on all of the Loan Parties' right, title and
interest in and to the Mortgaged Properties thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on
Schedule 3.15, the Mortgages shall constitute a perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in
such Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other Person, other than with respect to Permitted
Encumbrances.
SECTION 3.16. FCC Compliance. (a) The Borrower and each
Restricted Subsidiary are in compliance with the Communications Act except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
(b) To the knowledge of the Borrower, there is no investigation,
notice of apparent liability, violation, forfeiture or other order or
complaint issued by or before the FCC, or of any other proceedings of or
before the FCC, affecting it or any Restricted Subsidiary which could
reasonably be expected to have a Material Adverse Effect.
(c) No event has occurred which (i) results in, or after notice
or lapse of time or both would result in, revocation, suspension, adverse
modifications, non-renewal, impairment, restriction or termination of, or
order of forfeiture with respect to, any License in any respect which could
reasonably be expected to have a Material Adverse Effect or (ii) affects or
could reasonably be expected in the future to affect any of the rights of
the Borrower or any Restricted Subsidiary under any License held by the
Borrower or such Subsidiary in any respect which could reasonably be
expected to have a Material Adverse Effect.
(d) The Borrower and each Restricted Subsidiary have duly filed
in a timely manner all material filings, reports, applications, documents,
instruments and information required to be filed by it under the
Communications Act, and all such filings were when made true, correct and
complete in all respects except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agree ment) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Admini strative Agent and the Lenders
and dated the Effective Date) of each of (i) Skadden, Arps, Slate,
Meagher & Flom (Illinois), counsel for the Borrower, substantially in the
form of Exhibit B-1, (ii) Randall Rings, Esq., Vice President, General
Counsel & Secretary of the Borrower, substantially in the form of Exhibit
B-2, (iii) Swidler Berlin Shereff Friedman, LLP, special communications
counsel for the Borrower, substantially in the form of Exhibit B-3, (iv)
Shuttleworth, Ingersoll, P.C., Iowa counsel for the Borrower
substantially in the form of Exhibit B-4, (v) Brown & Bain, P.A., Arizona
counsel for the Borrower, substantially in the form of Exhibit B-5, (vi)
Lynn, Jackson, Shultz & Lebron, South Dakota counsel for the Borrower,
substantially in the form of Exhibit B-6 and (vii) Davis Wright Tremaine
LLP, Washington counsel for the Borrower, substantially in the form of
Exhibit B-7 and, in the case of each such opinion required by this
paragraph, covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required Lenders shall
reasonably request. The Borrower hereby requests such counsel to deliver
such opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan Documents
or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
reasonable out-of-pocket expenses (including reasonable fees, charges and
disbursements of counsel) required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an
Executive Officer or Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a search of
the Uniform Commercial Code (or equivalent) filings made with respect to
the Loan Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the financing statements (or similar documents)
disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 6.03 or have
been released.
(g) The Administrative Agent shall have received evidence that
the insurance required by Section 5.07 and the Security Documents is in
effect.
(h) The Restructuring of the Borrower shall have been
consummated on the terms set forth on Annex I to the Third Amendment, as
amended in accordance with its terms.
(i) The Reorganization Consummation Date shall have occurred.
(j) The Third Amendment shall be in full force and effect and
all conditions set forth in Section 4 thereof shall have been satisfied.
(k) No Default or Event of Default (each as defined in the
Existing Credit Agreement) shall have occurred and be continuing under
the Existing Credit Agreement.
(l) The Borrower shall, on a pro forma basis, be in compliance
with Sections 6.13, 6.14, 6.16, 6.17 and 6.18.
(m) All consents and approvals (other than those set forth on
Schedule 3.03) required to be obtained from any Governmental Authority or
other Person in connection with the Transactions shall have been
obtained, and (other than as set forth on Schedule 4.01(m)) all
applicable waiting periods and appeal periods shall have expired, in each
case without the imposition of any burdensome conditions.
(n) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower as of the Effective Date, reflecting all
pro forma adjustments as if the Transactions had been consummated on such
date, and such pro forma consolidated balance sheet shall be consistent
in all material respects with the 8-year business plan and other
information previously provided to the Lenders under the Existing Credit
Agreement in connection with the Third Amendment.
(o) After giving effect to the Transactions, neither the
Borrower nor any of its Subsidiaries shall have outstanding any shares of
preferred stock or any Indebtedness, other than (i) Indebtedness incurred
under the Loan Documents, (ii) the Indebtedness permitted under Sections
6.01(a) or 6.02, (iii) any FL New Preferred Stock of the Borrower and
(iv) preferred stock of the Borrower issued to the Holders of Allowed
Note Claims (each as defined in the Confirmed Plan of Reorganization)
pursuant to the Confirmed Plan of Reorganization.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satis fied (or
waived pursuant to Section 9.02) at or prior to 5:00 p.m., New York City
time, on August 1, 2002 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to receipt
of the request therefor in accordance herewith and to the satisfac tion of
the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable except to the extent
that any representation or warranty expressly relates to an earlier date
(in which case such representation shall be correct as of such earlier
date); provided, that the representation in Section 3.04(b) shall not be
restated on the occasion of a Borrowing that does not increase the
principal amount of outstanding Loans.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to consti tute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 100 days after the end of each fiscal year of the
Borrower, an audited consolidated balance sheet of the Borrower and the
Restricted Subsidiaries and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Arthur Andersen LLP or other
independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its Restricted Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Restricted Subsidiaries and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified
by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the
Borrower and its Restricted Subsidiaries on a consolidated basis in
accordance with GAAP consis tently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.13, 6.14 and 6.17, (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the Borrower's audited
financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial
statements accompanying such certificate and (iv) attaching statements,
certified to be true and correct, of Consolidated Revenue, Access Lines
in Service and churn rate for the period or periods of such accom panying
financial statements;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) within 10 Business Days after final approval thereof by the
Board of Directors (but in any event no later than February 28 of each
fiscal year of the Borrower), a budget of the Borrower and its Restricted
Subsidiaries for such fiscal year, prepared to show information on a
quarterly basis, and, to the extent all relevant internal approvals have
been obtained, any significant revisions of such budget;
(f) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Restricted Subsidiary with the Securities
and Exchange Commission, or any Govern mental Authority succeeding to any
or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Restricted Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any
Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of
the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Govern mental Authority against or
affecting the Borrower or any Affiliate thereof that could reasonably be
expected to result in a Material Adverse Effect; and
(c) any other development (including any ERISA Event) that
results in, or could reasonably be expected to result in, a Material
Adverse Effect.
Each notice delivered under this Section shall be accom panied by a
statement of a Financial Officer or other Executive Officer of the Borrower
setting forth the details of the event or development requiring such notice
and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Borrower
will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name, (ii) in the location of any
Loan Party's chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral (other than real
property and improvements and fixtures thereto) owned by it with a book
value in excess of $250,000 is located (including the establishment of any
such new office or facility), (iii) in any Loan Party's identity, corporate
structure or jurisdiction of incorporation or formation or (iv) in any Loan
Party's Federal Taxpayer Identification Number. The Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless
all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Agent to continue at all times following
such change to have a valid, legal and perfected security interest in all
the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged
or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a)
of Section 5.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer and a legal officer of the Borrower (i)
setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered
pursuant to this Section and (ii) certifying that all Uniform Commercial
Code financing statements (including fixture filings, as applicable) or
other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of
the Collateral have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to clause
(i) above to the extent necessary to protect and perfect the security
interests under the Security Agreement for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The Borrower will,
and will cause each of its Restricted Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and
effect its legal existence and its rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names, except to the
extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.05.
SECTION 5.05. Payment of Obligations. The Borrower will, and
will cause each of its Restricted Subsidiaries to, pay its Tax liabilities,
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, (c) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to
make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and
will cause each of its Restricted Subsidiaries to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.07. Insurance. The Borrower will, and will cause each
of its Restricted Subsidiaries to, maintain, with financially sound and
reputable insurance companies (a) insurance in such amounts (with no
greater risk reten tion) and against such risks as are customarily
maintained by companies of established repute engaged in the same or
similar businesses operating in the same or similar locations and (b) all
insurance required to be maintained pursuant to the Security Documents. The
Borrower will furnish to the Lenders, upon request of the Administrative
Agent, information in reasonable detail as to the insurance so maintained.
SECTION 5.08. Casualty and Condemnation. The Borrower (a) will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to the Collateral in any material
respect or the commencement of any action or proceeding for the taking of the
Collateral in any material respect under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds
of any such event (whether in the form of insurance proceeds, condemnation
awards or otherwise) are collected and applied in accordance with the
applicable provisions of the Existing Credit Agreement.
SECTION 5.09. Books and Records; Inspection and Audit Rights.
The Borrower will, and will cause each of its Restricted Subsidiaries to,
keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its
business and activities. The Borrower will, and will cause each of its
Restricted Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and will
cause each of its Restricted Subsidiaries to, comply with all laws
(including the Communications Act), rules, regulations and orders of any
Governmental Authority applicable to it or its property (including
obligations under Licenses), except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds
of the Loans and the issuance of Letters of Credit will be used by the
Borrower for working capital and general corporate purposes, including the
construction, expansion, development or acquisition of Telecommunications
Assets and Telecommunications Businesses. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations U and X.
SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired (and such Subsidiary has assets in excess
of $10,000 or acquires assets in excess of $10,000) after the Effective
Date, the Borrower will, within three Business Days after such Subsidiary
is formed or acquired or such Subsidiary acquires assets in excess of
$10,000, as applicable, notify the Administrative Agent and the Lenders
thereof and promptly cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary (if it is a Subsidiary Loan
Party) and with respect to any Equity Interest in or Indebtedness of such
Subsidiary owned by or on behalf of any Loan Party.
SECTION 5.13. Further Assurances. (a) The Borrower will, and will
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be
required under any applicable law, or which the Agent or the Required Lenders
may reasonably request, to cause the Collateral and Guarantee Requirement to
be and remain satisfied, all at the expense of the Loan Parties; provided,
that the Collateral and Guarantee Requirement need not be satisfied with
respect to (i) real properties owned by the Borrower with an individual fair
market value (including fixtures and improvements) that is less than
$1,500,000, (ii) real properties owned by any Restricted Subsidiary with an
individual fair market value (including fixtures and improvements) that is
less than $5,000,000 and (iii) the real properties identified in Schedule
6.03 and properties subject to Liens permitted under Section 6.03(v). The
Borrower also agrees to provide to the Agent, from time to time upon request,
evidence reasonably satisfactory to the Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower
or any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Documents that become subject to
the Lien of the Security Documents upon acquisition thereof), the Borrower
will notify the Agent and the Lenders thereof, and, if requested by the
Agent or the Required Lenders, the Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the
Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Agent to grant and perfect such Liens,
including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties; provided, that the Collateral and Guarantee
Requirement need not be satisfied with respect to (i) real properties owned
by the Borrower with an individual fair market value (including fixtures
and improvements) that is less than $1,500,000, (ii) real properties owned
by any Restricted Subsidiary with an individual fair market value
(including fixtures and improvements) that is less than $5,000,000 and
(iii) the real properties identified in Schedule 6.03 and properties
subject to Liens permitted under Section 6.03(v).
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have
been paid in full and all Letters of Credit have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 6.01. Indebtedness of the Borrower; Certain Equity
Securities. (a) The Borrower will not create, incur, assume or permit to
exist any Indebtedness or any Attributable Debt in respect of
sale-leaseback transactions, except:
(i) Indebtedness created under the Loan Documents (including under
Section 2.20);
(ii) Indebtedness existing on the date hereof and set forth in
Schedule 6.01(a);
(iii) Indebtedness of the Borrower to any Restricted Subsidiary;
(iv) Guarantees by the Borrower of Indebtedness of any
Restricted Subsidiary; provided that Guarantees by the Borrower of
Indebtedness of any Restricted Subsidiary that is not a Loan Party shall
be subject to Section 6.06;
(v) Indebtedness of the Borrower incurred to finance the
acquisition, construction, installation, development or improvement of
any fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof; provided that (A) such Indebtedness is incurred prior to or
within 270 days after such acquisition or the completion of such
construction, installation, development or improvement, (B) the Borrower
and the Restricted Subsidiaries are in compliance, on a pro forma basis
after giving effect to the incurrence of such Indebtedness, with the
financial covenants contained in Sections 6.13, 6.14, 6.16, 6.17 and 6.18
to the extent then applicable and (C) (a) such Indebtedness shall
constitute either (x) third party equipment financing in an aggregate
amount at any time outstanding not to exceed $100,000,000 or (y) other
Indebtedness constituting Capital Lease Obligations in an aggregate
amount at any time outstanding not to exceed $50,000,000 and (b) the
actual or implicit interest rate under any purchase money financing,
installment sale, conditional sale or capital lease entered into in
reliance on this clause (v) shall not be substantially higher than the
interest rate(s) then available to the Borrower under this Agreement;
(vi) Indebtedness of the Borrower pursuant to Hedging Agreements
entered into to fix the effective rate of interest on the Loans or other
Indebtedness, provided such transactions are entered into to hedge actual
interest rate exposures and not for the purpose of speculation;
(vii) Indebtedness incurred to refinance any Indebtedness
permitted under clauses (ii) and (ix) of this Section 6.01; provided that
(a) such refinancing Indebtedness (i) shall not have a greater outstanding
principal amount (except to the extent necessary to pay fees, expenses,
underwriting discounts and prepayment premiums in connection therewith), an
earlier maturity date or a decreased weighted average life than the
Indebtedness refinanced and (ii) shall be subordinated to the Indebtedness
created under the Loan Documents to at least the extent of, and shall
otherwise be issued on terms no less favorable in any material respect to
the Lenders than, the Indebtedness refinanced, (b) the proceeds of such
Indebtedness shall be used solely to repay the Indebtedness refinanced
thereby and fees, expenses, underwriting discounts and prepayment premiums
in connection therewith and (c) such refinancing Indebtedness (other than
in respect of the Existing Credit Agreement) is not Guaranteed by any
Restricted Subsidiary;
(viii) surety, performance and other similar bonds incurred in the
ordinary course of business not securing Indebtedness for borrowed money;
(ix) so long as the Borrower and the Restricted Subsidiaries are
in compliance, on a pro forma basis after giving effect to the incurrence
of such Indebtedness, with the financial covenants contained in Sections
6.13, 6.14, 6.16, 6.17 and 6.18 to the extent then applicable, other senior
unsecured Indebtedness, ranked pari passu with the Indebtedness of the
Borrower under the Loan Documents, in an aggregate principal amount at any
time outstanding not to exceed $50,000,000; and
(x) so long as the Borrower and the Restricted Subsidiaries are
in compliance, on a pro forma basis after giving effect to the incurrence
of such Indebtedness, with the financial covenants contained in Sections
6.13, 6.14, 6.16, 6.17 and 6.18 to the extent then applicable, other
unsecured Indebtedness subordinated to the Obligations in a manner
reasonably satisfactory to the Required Lenders.
For purposes of determining any particular amount of Indebtedness under
this Section 6.01, in the event an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described in the above
clauses, the Borrower, in its sole discretion, may classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
(b) The Borrower will not, and it will not permit any Restricted
Subsidiary to, (i) issue any preferred stock or (ii) be or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem,
retire, acquire or make any other payment in respect of any shares of
Capital Stock of the Borrower or any Restricted Subsidiary or any option,
warrant or other right to acquire any such shares of Capital Stock;
provided, that the Borrower may issue Non-Cash Pay Preferred Stock, New
Preferred Stock and preferred stock pursuant to the Confirmed Plan of
Reorganization and as contemplated in the Disclosure Statement so long as
the Borrower and the Restricted Subsidiaries are in compliance, on a pro
forma basis after giving effect to the issuance of such preferred stock,
with the financial covenants contained in Sections 6.13, 6.14, 6.16, 6.17
and 6.18 to the extent then applicable.
SECTION 6.02. Indebtedness of Restricted Subsidiaries. The
Borrower will not permit any Restricted Subsidiary to create, incur, assume
or permit to exist any Indebtedness or any Attributable Debt in respect of
sale- leaseback transactions, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth in
Schedule 6.02.
(iii) Indebtedness of any Restricted Subsidiary to the Borrower
or any other Restricted Subsidiary; provided that Indebtedness of any
Restricted Subsidiary that is not a Loan Party to the Borrower or any
Subsidiary Loan Party shall be subject to Section 6.06;
(iv) Guarantees by any Restricted Subsidiary of Indebtedness of
any other Restricted Subsidiary; provided that Guarantees by any
Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a
Loan Party shall be subject to Section 6.06;
(v) Indebtedness of any Person that becomes a Restricted
Subsidiary after the date hereof as a result of a Permitted Business
Acquisition permitted under Section 6.06(e); provided that (A) such
Indebtedness exists at the time such Person becomes a Restricted
Subsidiary and is not created in contemplation of or in connection with
such Person becoming a Restricted Subsidiary and (B) the Borrower and the
Restricted Subsidiaries are in compliance, on a pro forma basis after
giving effect to the incurrence of such Indebtedness, with the financial
covenants contained in Sections 6.13, 6.14, 6.16, 6.17 and 6.18 to the
extent then applicable; provided, further, that any such Indebtedness may
be permitted by this clause (v) only until such time as such Person
merges or consolidates with the Borrower or another Person that is a
Restricted Subsidiary on the date hereof;
(vi) surety, performance and other similar bonds incurred in the
ordinary course of business not securing Indebtedness for borrowed money;
(vii) Capital Lease Obligations of Splitrock and its
subsidiaries listed on Schedule 6.02 in an amount not to exceed the
amount set forth on Schedule 6.02; and
(viii) other unsecured Indebtedness in a principal amount at any
time outstanding not to exceed $10,000,000.
SECTION 6.03. Liens. The Borrower will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date hereof and set forth in
Schedule 6.03; provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Restricted Subsidiary and (ii)
such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
(except as permitted by Section 6.01(a)(vii)) increase the outstanding
principal amount thereof;
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Restricted Subsidiary or
existing on any property or asset of any Person that becomes a Restricted
Subsidiary after the date hereof prior to the time such Person becomes a
Restricted Subsidiary, in each case as a result of a Permitted Business
Acquisition permitted under Section 6.06(e); provided that (A) such Lien
is not created in contemplation of or in connection with such acquisition
or such Person becoming a Restricted Subsidiary, as the case may be, (B)
such Lien shall not apply to any other property or assets of the Borrower
or any Restricted Subsidiary and (C) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Restricted Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof (except as permitted by Section
6.01(a)(vii));
(v) Liens (including pursuant to any Capital Lease Obligation) on
fixed or capital assets acquired, constructed, developed, installed or
improved by the Borrower; provided that (A) such security interests secure
Indebtedness permitted by clause (v) of Section 6.01(a), (B) such security
interests and the Indebtedness secured thereby are incurred prior to or
within 270 days after such acquisition or the completion of such
construction, development, installation or improvement, (C) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing, developing, installing or improving such fixed or capital
assets and (D) such security interests shall not apply to any other
property or assets of the Borrower or any Restricted Subsidiary (it being
understood that all Indebtedness to any single lender or group of related
lenders or outstanding under any single credit facility, and in any case
relating to the same group or collection of Telecommunications Assets
financed thereby, shall be considered a single purchase money Indebtedness,
whether drawn at one time or from time to time);
(vi) Liens securing Indebtedness of the Borrower to any Restricted
Subsidiary and of any Restricted Subsidiary to any Subsidiary Loan Party;
(vii) Liens created under the Existing Credit Agreement and the
related security documents; and
(viii) Liens securing Indebtedness permitted by Section 6.02(vii).
SECTION 6.04. Sale and Lease-Back Transactions. The Borrower
will not, nor will it permit any Restricted Subsidiary to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell
or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the
same purpose as the property being sold or transferred, except to the
extent all Capital Lease Obligations, Attributable Debt and Liens
associated with such sale and lease-back transaction are permitted by
Sections 6.01, 6.02 and 6.03 (treating the property subject thereto as
being subject to a Lien securing the related Attributable Debt, in the case
of a sale and lease-back not accounted for as a Capital Lease Obligation).
SECTION 6.05. Fundamental Changes. (a) The Borrower will not,
nor will it permit any Restricted Subsidiary to, merge into or consolidate
with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Person may merge into any Restricted Subsidiary in a transaction in which
the surviving entity is a Wholly Owned Restricted Subsidiary and (if any
party to such merger is a Subsidiary Loan Party) is a Subsidiary Loan Party
and (iii) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a
Wholly Owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.06.
(b) The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, engage to any material extent in any business
other than Telecommunications Business or any businesses of the type
conducted by the Borrower and its Restricted Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.
(c) The Borrower will not permit any Wholly Owned Restricted
Subsidiary to merge or consolidate with any other Person other than the
Borrower, issue or sell shares of its Capital Stock or take any other action
if as a result thereof such Restricted Subsidiary would cease to be a Wholly
Owned Restricted Subsidiary of the Borrower, unless such merger or
consolidation is designated as an Investment made in such non-Wholly Owned
Restricted Subsidiary pursuant to Section 6.06(l).
Nothing contained in subsections (a), (b) or (c) above shall
prevent the Borrower or any of its Subsidiaries from consummating any
transaction permitted under Section 6.07 hereof.
SECTION 6.06. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its
Restricted Subsidiaries to make or permit to exist any Investment in any
other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting an
operating business, except:
(a) Permitted Investments;
(b) Investments existing on the date hereof or which on the date
hereof are obligated to be made and set forth on Schedule 6.06;
(c) Investments by the Borrower and its Restricted Subsidiaries
in the Capital Stock of Restricted Subsidiaries that are Loan Parties (or
of McLeodUSA Telecommunications Services, Inc., whether or not it is a
Loan Party); provided that such shares of Capital Stock shall be pledged
pursuant to the Borrower Pledge Agreement or the Subsidiary Pledge
Agreement, as applicable;
(d) loans or advances made by the Borrower to any Restricted
Subsidiary and made by any Restricted Subsidiary to the Borrower or any
other Restricted Subsidiary (other than any Foreign Subsidiary); provided
that any such loans and advances made by a Loan Party shall, if evidenced
by a promissory note, be pledged pursuant to the applicable Pledge
Agreement (provided, that promissory notes issued by Illinois
Consolidated Telephone Company need not be pledged if such pledge is
prohibited by applicable law or contractual arrangements);
(e) Permitted Business Acquisitions, provided that the Leverage
Ratio immediately before and after giving effect to any such Permitted
Business Acquisition shall be equal to or less than 4.00 to 1.00;
(f) Guarantees constituting Indebtedness permitted by Sections
6.01 or 6.02 (other than by Section 6.01(a)(iv) or 6.02(iv));
(g) Investments received in satisfaction of judgments or in
connection with the bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with, customers and suppliers, in each
case in the ordinary course of business;
(h) loans, advances or extensions of credit to employees and
directors made in the ordinary course of business;
(i) negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits
in the ordinary course of business; and
(j) Investments in Hedging Agreements.
SECTION 6.07. Asset Sales. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, sell, transfer, lease or
otherwise dispose of any asset, including any Capital Stock owned by it,
nor will the Borrower permit any of its Restricted Subsidiaries to issue
any additional shares of its Capital Stock or other ownership interests in
such Restricted Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business (including in the case of
inventory, sales of inventory in bulk);
(b) sales, transfers and dispositions to the Borrower or a
Restricted Subsidiary or to another Person as an Investment permitted by
Section 6.06; provided that any such sales, transfers or dispositions
involving a Restricted Subsidiary that is not a Loan Party shall be made
in compliance with Section 6.10; and
(c) sales, transfers and other dispositions of assets (including
Capital Stock of Subsidiaries) that are not permitted by any other clause
of this Section; provided that the Net Proceeds from (i) sales, transfers
and other dispositions of Non-Core Assets are utilized by the Borrower
for working capital and general corporate purposes, including permitted
Capital Expenditures and (ii) sales, transfers and other dispositions of
other assets permitted by this clause (c) are applied in accordance with
the provisions of Section 2.11(c);
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for
fair value and for consideration consisting of at least 75% cash or
Telecommunications Assets or of Capital Stock of Persons engaged in the
Telecommunications Business, provided the aggregate amount of all such
Capital Stock of Persons engaged in the Telecommunications Business (other
than Persons that become Restricted Subsidiaries as a result of the receipt
of such Capital Stock) received as part of such 75% consideration for all
such sales, transfers, leases and other dispositions during the term of
this Agreement does not exceed $100,000,000.
SECTION 6.08. Hedging Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any
Hedging Agreement, other than (a) Hedging Agreements required by Section
5.14 of the Existing Credit Agreement and (b) Hedging Agreements entered
into in the ordinary course of business to hedge or mitigate risks to which
the Borrower or any Restricted Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
SECTION 6.09. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, nor will it permit any Restricted
Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) the Borrower may declare and pay dividends
or other distributions with respect to its Capital Stock payable solely in
additional shares of its common stock, (ii) Restricted Subsidiaries may
declare and pay dividends ratably with respect to their Capital Stock,
(iii) the Borrower may make Restricted Payments, pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and the Restricted Subsidiaries, in an aggregate
amount not in excess of (A) Equity Proceeds and Conversion Proceeds
received after the date hereof and not applied to any other Designated
Equity Proceeds Use plus (B) to the extent not made with such Equity
Proceeds or Conversion Proceeds, $5,000,000 during any 12-month period and
(iv) the Borrower may purchase or otherwise retire any Capital Stock of the
Borrower to the extent necessary (as determined in good faith by a majority
of the disinterested members of the Board of Directors of the Borrower,
whose determination shall be conclusive) to prevent the loss, or to secure
the reinstatement, of any material license or franchise held by the
Borrower or any Restricted Subsidiary from any Governmental Authority,
provided that (A) the Borrower shall notify the Administrative Agent of any
purchases or retirements pursuant to clause (iv) preceding in an amount
greater than $5,000,000 and (B) such purchases or retirements shall not
result in a Material Adverse Effect; provided that the issuance of
preferred stock of the Borrower pursuant to the Confirmed Plan of
Reorganization and as contemplated in the Disclosure Statement and the
accretion of the liquidation preference thereunder shall not be deemed to
be the incurrence of an obligation to make a Restricted Payment or the
making of a Restricted Payment by the Borrower for purposes of this Section
6.09.
(b) The Borrower will not, nor will it permit any Restricted
Subsidiary to, make or agree to pay or make, directly or indirectly, (i) any
payment or other distribution (whether in cash, securities or other property)
of or in respect of principal of or interest on any Indebtedness, or any
payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancelation or termination of
any Indebtedness or New Preferred Stock (it being understood that this
Section 6.09(b) shall not be deemed to prohibit the discharge of Indebtedness
pursuant to the Confirmed Plan of Reorganization or the existence of
provisions as may be contained in future indentures governing unsecured
indebtedness issued by the Borrower after the Effective Date substantially
similar to the provisions contained in Section 4.08 of the Indentures
permitting certain holders of Indebtedness of the Borrower to require the
repurchase of such Indebtedness following certain sales of assets of the
Borrower; provided that no such repurchases under any future indenture shall
be effected so long as any Loans, Letters of Credit or Commitments are
outstanding under this Agreement) or (ii) any payment to any Derivatives
Counterparty as a result of any change in the market value of any such
Indebtedness that is publicly traded (provided, that (A) no payment shall be
deemed to have been made to any Derivatives Counterparty to the extent
Derivatives Counterparties have made cumulative payments to the Borrower or
any Restricted Subsidiary as a result of changes in the market value of such
publicly traded Indebtedness in a cumulative amount in excess of the payments
made to Derivatives Counterparties by the Borrower and the Restricted
Subsidiaries as a result of such changes and (B) it is understood that the
intent of the above language relating to payments to and from Derivatives
Counterparties is to prohibit payments and distributions pursuant to
transactions entered into with Derivatives Counterparties only if the
Borrower intends such transactions to have substantially the same economic
effect as the payments and distributions referred to in clause (i) above),
except:
(i) payment of Indebtedness created under the Loan Documents and
under the Existing Credit Agreement and the Loan Documents (as defined in
the Existing Credit Agreement);
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness and payment of
regular dividends on New Preferred Stock;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iv) payments to prepay, purchase or redeem the outstanding
indebtedness of Greene County Partners, Inc. listed on Schedule 6.02; and
(v) payments to redeem outstanding Indebtedness pursuant to the
exercise of certain rights of the holders of such Indebtedness to require
the repurchase of such Indebtedness arising in the event of a change in
control of the Borrower specified in provisions as may be contained in
future indentures governing unsecured indebtedness issued by the Borrower
after the date hereof substantially similar to Section 4.07 of each of
the Indentures.
SECTION 6.10. Transactions with Affiliates. The Borrower will
not, nor will it permit any Restricted Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) transactions in
the ordinary course of business that are at prices and on terms and
conditions not less favorable to the Borrower or such Restricted Subsidiary
than could be obtained on an arm's-length basis from unrelated third
parties (or, in the event that there are no comparable transactions
involving Persons who are not Affiliates of the Borrower or the relevant
Restricted Subsidiary to apply for comparative purposes, is otherwise on
terms that, taken as a whole, are fair to the Borrower or the relevant
Restricted Subsidiary as determined by (i) with respect to a transaction or
group of related transactions of $5,000,000 or more, the board of directors
or executive committee of the board of directors of the Borrower including
the affirmative vote of a majority of the disinterested directors and (ii)
with respect to a transaction or group of transactions of less than
$5,000,000, an Executive Officer of the Borrower), (b) transactions between
or among the Borrower and the Subsidiary Loan Parties not involving any
other Affiliate, (c) any Restricted Payment permitted by Section 6.09, (d)
any agreement or arrangement with respect to the compensation of a director
or officer of the Borrower or any Restricted Subsidiary approved by a
majority of the disinterested members of the board of directors and
consistent with industry practice and (e) transactions pursuant to any
agreement or arrangement existing on the date hereof and set forth in
Schedule 6.10.
SECTION 6.11. Restrictive Agreements. The Borrower will not, nor
will it permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Restricted Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets (other than any such restrictions or
conditions that affect property or assets with an aggregate value less than
$2,000,000), or (b) the ability of any Restricted Subsidiary to pay dividends
or other distributions with respect to any shares of its Capital Stock or to
make or repay loans or advances to the Borrower or any other Restricted
Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Restricted Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document or by any
"Loan Document" as defined in the Existing Credit Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.11 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Restricted Subsidiary (whether accomplished by sale of stock or sale of all
or substantially all of the assets of such Restricted Subsidiary) pending
such sale, provided such restrictions and conditions apply only to the
Restricted Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness and (v) clause (a) of the
foregoing shall not apply to customary provisions restricting the assignment
thereof in (A) leases, (B) joint fiber construction agreements and
"indefeasible rights to use" agreements for transmission capacity for which
the Borrower or a Restricted Subsidiary is not the owner or lessor, (C) pole
or conduit use agreements in which the Borrower or a Restricted Subsidiary is
the user, (D) rights of way and (E) franchises.
SECTION 6.12. Amendment of Material Documents. The Borrower will
not, nor will it permit any Restricted Subsidiary to, amend, modify or
waive any of its rights under (a) its certificate of incorporation, by-laws
or other organizational documents or (b) any indenture governing
Indebtedness of the Borrower or any Subsidiary, in each case in a manner
adverse to the Lenders.
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of any date during any period set forth below to exceed the
ratio set forth opposite such period:
Period Ratio
------ -----
January 1, 2003 to December 31, 2003 11.00 to 1.00
January 1, 2004 to March 31, 2004 10.00 to 1.00
April 1, 2004 to June 30, 2004 8.50 to 1.00
July 1, 2004 to September 30, 2004 7.00 to 1.00
October 1, 2004 to March 31, 2005 6.00 to 1.00
April 1, 2005 to September 30, 2005 5.00 to 1.00
October 1, 2005 and thereafter 4.00 to 1.00
SECTION 6.14. Capital Expenditure Limitation. The Borrower shall
not permit the Capital Expenditures of the Borrower and the Restricted
Subsidiaries for any fiscal year of the Borrower to exceed the sum of (i)
with respect to the fiscal years ending December 31, 2002, 2006 and
thereafter, $350,000,000 and with respect to the fiscal years ending December
31, 2003, 2004 and 2005, $300,000,000 and (ii) an amount equal to the
Applicable Capex Carryforward for such fiscal year. For the purpose for any
fiscal year commencing with the Borrower's fiscal year 2002, the "Applicable
Capex Carryforward" means an amount, not in excess of $50,000,000, equal to
the difference between (x) the product of (A) with respect to the fiscal
years ending December 31, 2002, 2006 and thereafter, $350,000,000 and with
respect to the fiscal years ending December 31, 2003, 2004 and 2005,
$300,000,000 multiplied by (B) the number of fiscal years of the Borrower
then elapsed since, and including, fiscal year 2001 through the fiscal year
most recently ended (the "Calculation Period") minus (y) the aggregate amount
of actual Capital Expenditures actually made during the Calculation Period.
SECTION 6.15. [Intentionally Omitted].
SECTION 6.16. Minimum Access Lines in Service. The Borrower will
not permit the Access Lines in Service as of any of the dates set forth
below to be less than the minimum amount indicated opposite to such date:
Date Minimum
---- -------
March 31, 2002 900,000
June 30, 2002 900,000
September 30, 2002 900,000
December 31, 2002 900,000
March 31, 2003 1,000,0000
June 30, 2003 1,000,0000
September 30, 2003 1,000,0000
December 31, 2003 1,000,0000
March 31, 2004 and thereafter no minimum
SECTION 6.17. Interest Expense Coverage Ratio. The Borrower will
not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash
Interest Expense, in each case for any period of four consecutive fiscal
quarters ending during any period set forth below to be less than the ratio
set forth opposite such period:
Period Ratio
------ -----
January 1, 2003 to March 31, 2004 1.00 to 1.00
April 1, 2004 to June 30, 2004 1.25 to 1.00
July 1, 2004 to December 31, 2004 1.50 to 1.00
January 1, 2005 to June 30, 2005 2.00 to 1.00
July 1, 2005 and thereafter 2.50 to 1.00
SECTION 6.18. Minimum Consolidated Revenue. The Borrower will not
permit Consolidated Revenue for any period of four consecutive fiscal
quarters ending during any period set forth below, to be less than the amount
set forth opposite such period:
Period Minimum
------ -------
January 1, 2002 to $1,300,000,000
June 30, 2002
July 1, 2002 to $1,200,000,000
September 30, 2002
October 1, 2002 to $1,100,000,000
December 31, 2002
January 1, 2003 to $900,000,000
December 31, 2003
January 1, 2004 to $1,000,000,000
December 31, 2004
January 1, 2005 and thereafter no minimum
SECTION 6.19. Designation of Unrestricted Subsidiaries. (a) The
Borrower may not designate any Restricted Subsidiary as an Unrestricted
Subsidiary and may hereafter designate any other Subsidiary as an
Unrestricted Subsidiary under this Agreement (a "Designation") only if:
(i) such Subsidiary does not own any Capital Stock of any
Restricted Subsidiary;
(ii) no Event of Default shall have occurred and be continuing at
the time of or after giving effect to such Designation;
(iii) after giving effect to such Designation and any related
Investment to be made in such designated Subsidiary by the Borrower or
any Restricted Subsidiary (which shall in any event include the existing
Investment in such Subsidiary at the time it is designated as an
Unrestricted Subsidiary), (A) any such existing Investment and related
Investment would comply with Section 6.06 and (B) the Borrower would be
in compliance with each of the covenants set forth in Sections 6.13,
6.14, 6.16, 6.17 and 6.18 calculated on a pro forma basis as if such
Designation and Investment had occurred immediately prior to the first
day of the period of four consecutive fiscal quarters most recently ended
in respect of which financial statements have been delivered by the
Borrower pursuant to Section 5.01(a) or (b); and
(iv) the Borrower has delivered to the Administrative Agent (x)
written notice of such Designation and (y) a certificate, dated the
effective date of such Designation, of a Financial Officer stating that
no Event of Default has occurred and is continuing and setting forth
reasonably detailed calculations demonstrating pro forma compliance with
Sections 6.13, 6.14, 6.16, 6.17 and 6.18 in accordance with paragraph
(iii) above.
(b) The Borrower may designate any Unrestricted Subsidiary as a
Restricted Subsidiary under this Agreement (an "RS Designation") only if:
(i) such Subsidiary is predominantly engaged in one or more
Telecommunications Businesses;
(ii) no Event of Default shall have occurred and be continuing
at the time of or after giving effect to such RS Designation, and after
giving effect thereto, the Borrower would be in compliance with each of
the covenants set forth in Sections 6.13, 6.14, 6.16, 6.17 and 6.18
calculated on a pro forma basis as if such RS Designation had occurred
immediately prior to the first day of the period of four consecutive
fiscal quarters most recently ended in respect of which financial
statements have been delivered by the Borrower pursuant to Section
5.01(a) or (b); and
(iii) all Liens on assets of such Unrestricted Subsidiary and
all Indebtedness of such Unrestricted Subsidiary outstanding immediately
following the RS Designation would, if initially incurred at such time,
have been permitted to be incurred pursuant to Sections 6.02 and 6.03
without reliance on Section 6.02(v) or Section 6.03(iv).
Upon any such RS Designation with respect to an Unrestricted
Subsidiary (i) the Borrower and the Restricted Subsidiaries shall be deemed
to have received a return of their Investment in such Unrestricted
Subsidiary equal to the lesser of (x) the amount of such Investment
immediately prior to such RS Designation and (y) the fair market value (as
reasonably determined by the Borrower) of the net assets of such Subsidiary
at the time of such RS Designation and (ii) the Borrower and the Restricted
Subsidiaries shall be deemed to have a permanent Investment in an
Unrestricted Subsidiary equal to the excess, if positive, of the amount
referred to in clause (i)(x) above over the amount referred to in clause
(i)(y) above.
(c) Neither the Borrower nor any Restricted Subsidiary shall at
any time (x) provide a Guarantee of any Indebtedness of any Unrestricted
Subsidiary, (y) be directly or indirectly liable for any Indebtedness of
any Unrestricted Subsidiary or (z) be directly or indirectly liable for any
other Indebtedness which provides that the holder thereof may (upon notice,
lapse of time or both) declare a default thereon (or cause such
Indebtedness or the payment thereof to be accelerated, payable or subject
to repurchase prior to its final scheduled maturity) upon the occurrence of
a default with respect to any other Indebtedness that is Indebtedness of an
Unrestricted Subsidiary, except in the case of clause (x) or (y) to the
extent permitted under Section 6.01 and Section 6.06 hereof. Except as
provided in clause (b) above, each Designation shall be irrevocable, and no
Unrestricted Subsidiary may become a Restricted Subsidiary, be merged with
or into the Borrower or a Restricted Subsidiary or liquidate into or
transfer substantially all its assets to the Borrower or a Restricted
Subsidiary.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) pay able under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Restricted Subsidiary in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove
to have been incorrect in any material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.04 (with respect to
the existence of the Borrower) or 5.11 or in Article VI (other than in
Section 6.10 or 6.11, if such failure to observe or perform is capable of
being remedied within 30 days of the occurrence thereof and could not
reasonably be expected to result in a Material Adverse Effect in such
30-day period);
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and such
failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent to the Borrower (which notice will
be given at the request of any Lender);
(f) the Borrower or any Restricted Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall
become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebted ness or any trustee
or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this
clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Significant Subsidiary or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower
or any Significant Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Borrower or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Significant
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Borrower or any Significant Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(k) one or more judgments (other than to the extent covered by
insurance as to which the insurance company has acknowledged coverage and
other than to the extent covered by an indemnity given by an insurance
company) for the payment of money in an aggregate amount in excess of
$25,000,000 shall be rendered against the Borrower, any Restricted
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by
a judgment creditor to attach or levy upon any assets of the Borrower or
any Restricted Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material
Adverse Effect;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral (other than immaterial portions
of the Collateral), with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents
or (ii) as a result of the Agent's failure to maintain possession of any
stock certificates, promissory notes or other instruments delivered to it
under the Pledge Agreement; or the Subsidiary Guarantee Agreement shall
cease to be, or shall be asserted by any Subsidiary Loan Party not to be,
valid and enforceable; or
(n) a Change of Control shall occur;
then, and in every such event (other than an event with respect to the
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the contin uance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and
all fees and other obli gations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower described in clause
(h) or (i) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Agent as its agent and authorizes the Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Agent, and such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as if
it were not the Agent hereunder.
The Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality
of the foregoing, (a) the Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights
and powers expressly contemplated by the Loan Documents that the Agent is
required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth in the Loan Documents, the Agent shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to
or obtained by the bank serving as Agent or any of its Affiliates in any
capacity. The Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or wilful misconduct. The Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is
given to the Agent by the Borrower or a Lender, and the Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connec tion with any
Loan Document, (ii) the contents of any certificate, report or other
document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to the
Agent.
The Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, docu ment or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Agent
also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants
or experts.
The Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Agent. The Agent and any such sub-agent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties.
The exculpatory provisions of the preceding paragraphs shall apply to any
such sub-agent and to the Related Parties of each Agent and any such
sub-agent, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Agent.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, the Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with, so long as no
Default or Event of Default shall have occurred and be continuing, the
consent of the Borrower (which consent shall not be unreasonably withheld
or delayed), to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation,
then the retiring Agent may, on behalf of the Lenders and the Issuing Bank,
appoint a successor Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Agent's resignation hereunder, the provisions of this Article and Section
9.03 shall continue in effect for the benefit of such retiring Agent, its
sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, indepen dently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that
it will, independently and without reli ance upon the Agent or any other
Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document
or related agreement or any document furnished hereunder or thereunder.
None of the Lenders identified on the facing page of, or elsewhere
in, this Agreement or in any other Loan Document as a "syndication agent" or
a "co-documentation agent", shall have any right, power, obligation,
liability, responsibility or duty under this Agreement or the other Loan
Documents other than those applicable to all of the Lenders as such. Without
limiting the foregoing, none of the Lenders so identified shall have or be
deemed to have any fiduciary relationship with any Lender.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at McLeodUSA Technology Park, 6400 C
Street SW, Cedar Rapids, Iowa 52406-3177, Attention of Ms. Chris A. Davis,
Chief Operating and Financial Officer, (Telecopy NO. 319 790-7008);
(b) if to the Agent or the Issuing Bank, to JPMorgan Chase Bank,
Loan and Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New
York, New York 10005, Attention of Ms. Gloria Javier (Telecopy No. (212)
552-5658), with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York,
New York 10017, Attention of Mr. James Stone (Telecopy No. (212) 270-7340);
and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communica tions given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Agent, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agent, the Issuing Bank and
the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure
by any Loan Party therefrom shall in any event be effective unless the same
shall be permitted by para graph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Except with respect to the addition of Supplemental
Commitments that may be extended pursuant to the terms of this Agreement,
neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by
the Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that
no such agreement shall (i) increase the Commitment or extend the Commitment
of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the maturity of any
Loan, or the required date of reimbursement of any LC Disbursement, or any
date for the payment of any interest or fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender (it being understood that the addition of Supplemental
Commitments that may be extended under this Agreement shall not be deemed to
alter such pro rata sharing of payments), (v) change any of the provisions of
this Section or the percentage set forth in the definition of "Required
Lenders" or any other provision of any Loan Document specifying the number or
percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (except, in each case, to provide for
Supplemental Commitments that may be extended under this Agreement), (vi)
release any Subsidiary Loan Party from its Guarantee under the Subsidiary
Guarantee Agreement (except as expressly provided in Section 9.15), or limit
its liability in respect of such Guarantee, without the written consent of
each Lender, (vii) (A) release Collateral from the Liens of the Security
Documents that comprises 15% or more of the book value of the consolidated
total assets of the Borrower and its Subsidiaries (as reflected on the
balance sheet of the Borrower and its Subsidiaries in the periodic report
most recently delivered pursuant to Section 5.01(f)), without the written
consent of Lenders holding 66.67% of the aggregate Revolving Exposures and
unused Commitments then outstanding, or (B) release all or substantially all
of the Collateral from the Liens of the Security Documents, without the
written consent of each Lender, in each case other than in connection with
any sale of Collateral permitted by this Agreement, or (viii) subordinate the
first priority security interest of the Obligations granted by the Security
Documents; provided further that (A) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the
Issuing Bank without the prior written consent of the Administrative Agent or
the Issuing Bank, as the case may be, and (B) any amendment to Section 9.14
is subject to Section 9.14(e). Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by
the Borrower, the Required Lenders and the Administrative Agent (and, if its
rights or obligations are affected thereby, the Issuing Bank) if (i) by the
terms of such agreement the Commitment of each Lender not consenting to the
amendment provided for therein shall terminate upon the effectiveness of such
amendment and (ii) at the time such amendment becomes effective, each Lender
not consenting thereto receives payment in full of the principal of and
interest accrued on each Loan made by it and all other amounts owing to it or
accrued for its account under this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter
of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank or any Lender, including the reasonable fees, charges and
disbursements of not more than three separate firms of outside counsel (as
well as separate local and regulatory counsel) for the Administrative
Agent, the Issuing Bank or any Lender, in connection with the enforcement
or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans
made or Letters of Credit issued hereunder, including all such out-
of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administra tive Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold
each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee (which shall be limited to
one joint counsel of each applicable type or qualification to all
Indemnitees, subject to the provisions of the next paragraph), incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties
to the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by the Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Mortgaged Property or any other property currently
or formerly owned or operated by the Borrower or any of its Subsidiaries, or
any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the bad faith, gross negligence
or wilful misconduct of such Indemnitee.
Each Indemnitee will provide the Borrower with prompt written
notification of any claim for which indemnification may be sought, provided
that the failure of any Indemnitee to give such notice shall not affect the
Borrower's indemnity obligations hereunder, except to the extent the Borrower
has been prejudiced by such Indemnitee's failure to notify. The Borrower
shall, upon confirming in writing to the applicable Indemnitee that the
Borrower assumes full liability for all claims and related costs and damages,
be entitled to assume the defense of any action for which indemnification is
sought hereunder with counsel of its choice at its expense (in which case the
Borrower shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by an Indemnitee except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to each
such Indemnitee. Notwithstanding the Borrower's right to assume the defense
of such action, each Indemnitee shall have the right to employ separate
counsel and to participate in the defense of such action, and the Borrower
shall bear the reasonable fees, costs and expenses of such separate counsel,
if (i) the relevant proceeding involves claims or actions between the
Borrower and such Indemnitee or the use of counsel chosen by the Borrower to
represent such Indemnitee would otherwise present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets
of, any such action include both the Borrower and such Indemnitee and such
Indemnitee shall reasonably have concluded that there may be legal defenses
available to it that are different from or additional to those presented by
the Borrower (in which case the Borrower shall not have the right to assume
the defense of such action on behalf of such Indemnitee); (iii) the Borrower
shall not have employed counsel reasonably satisfactory to such Indemnitee to
represent it within a reasonable time after notice of the institution of such
action; or (iv) the Borrower shall authorize such Indemnitee to employ
separate counsel at the Borrower's expense. The Borrower shall not be liable
to any Indemnitee for any settlement of an indemnified claim made without the
Borrower's consent (such consent not to be unreasonably withheld). No
settlement or adjustment will be made without such Indemnitee's prior written
consent if the settlement or adjustment involves any performance by, or
adverse admission of, such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or the Issuing Bank
under paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to the Administrative Agent or the Issuing Bank, as the case may be,
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent or the Issuing Bank in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposures
and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transac tions, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of
Credit), except that the Borrower may not assign or other wise transfer any
of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other
than the parties hereto, their respective successors and assigns permitted
hereby (inclu ding any Affiliate of the Issuing Bank that issues any Letter
of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Bank and the
Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender, a Lender
Affiliate or a Related Fund of a Lender, each of the Borrower and the
Administrative Agent (and, in the case of an assignment of all or a portion
of a Commitment or any Lender's obligations in respect of its LC Exposure,
the Issuing Bank) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed), (ii) except
in the case of an assignment to a Lender or an Affiliate of a Lender or a
Related Fund of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further
that any consent of the Borrower otherwise required under this paragraph
shall not be required if an Event of Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified
in each Assignment and Acceptance the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17
and 9.03). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph
(e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York
a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assign ment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Question naire (unless the assignee shall already
be a Lender here under), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or
more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instru ment pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any
provision of the Loan Docu ments; provided that such agreement or
instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, modification or waiver described
in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to para graph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Partici pant shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of
the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.17(e) as though it were
a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agree ments,
representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the other parties hereto
and shall survive the execution and delivery of the Loan Documents and the
making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder,
and shall continue in full force and effect as long as the principal of or
any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consumma tion
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed
by the Administrative Agent, the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each
of the other parties hereto and the Reorganization Consummation Date shall
have occurred, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. Delivery
of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such
Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and uncondi tionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclu
sive and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing
Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against the Borrower or
its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any
other Loan Document in any court referred to in para graph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in
this Agreement or any other Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent,
the Issuing Bank and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section (in the case of the following clauses (i) and (ii)), (i) to any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (ii) to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty
or professional advisor to such contractual counterparty agrees to be bound
by the provisions of this Section 9.12) or (iii) to the National Association
of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to the Agent, the Issuing Bank or
any Lender on a nonconfidential basis from a source other than the Borrower.
For the purposes of this Section, "Information" means all information
received from the Borrower relating to the Borrower or its business, other
than any such information that is available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
the Borrower. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwith standing anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"),
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by the Lender holding
such Loan in accordance with applicable law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repay ment, shall have been
received by such Lender.
SECTION 9.14. Special Funding Option. (a) Not withstanding
anything to the contrary contained herein, any Lender (for the purposes of
this Section 9.16, a "Granting Lender") may grant to a special purpose
funding vehicle (for the purposes of this Section 9.16, an "SPC") the option
to make, on behalf of such Granting Lender, all or a portion of the Loans
which such Granting Lender is obligated to make (a "Funding Obligation")
hereunder, such option to be exercisable in the sole discretion of the SPC,
provided, however, that
(i) such Granting Lender's obligations under this Agreement and
the Loan Documents shall remain unchanged, including without limitation
the indemnifi cation obligations of the Granting Lender pursuant to
Section 9.03 hereof;
(ii) such Granting Lender shall remain solely responsible to the
other parties hereto for the performance of all Funding Obligations;
(iii) the Borrower and the Lenders shall continue to deal solely
and directly with such Granting Lender in connection with such Granting
Lender's rights and obligations under this Agreement; the Agent shall
continue to deal directly with the Granting Lender as agent for the SPC
with respect to distribution of payment of principal; interest and fees,
notices of Conversion and Continuation and all other matters;
(iv) such Granting Lender shall retain the sole right to enforce
the obligations of the Borrower relating to its Loans and its Notes and
to approve any amendment, modification, or waiver of any provisions of
this Agreement, each of which may, if so agreed in writing between the
Granting Lender and the SPC, require the prior consent of any such SPC
which has exercised the option to undertake the Funding Obliga tion in
connection with such Granting Lender's Commitments and Obligations owing
thereto before the Granting Lender approves any such amendment,
modification or waiver;
(v) the granting of such option shall not constitute an
assignment to or participation of such SPC of or in the Granting Lender's
Commitments and Obligations owing thereto;
(vi) such SPC shall not become a Lender hereunder
as a result of the granting of such option;
(vii) such SPC shall not become obligated or
committed to make Loans as a result of the granting of
such option;
(viii) if such SPC elects not to exercise such option or
otherwise fails to make all or any part of a Loan, the Granting Lender
shall retain its Funding Obligation and be obligated to make the entire
Loan or any portion of such Loan not made by such SPC; and
(ix) any SPC may, with notice to, but without the prior written
consent of, the Borrowers and the Agent and without paying any processing
fee therefor, assign all or a portion of its interests as a participant or
subparticipant in any Loans to the Granting Bank or to any financial
institutions (consented to by the Borrowers and Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans.
(b) Loans made by an SPC hereunder shall be deemed to satisfy
the Funding Obligation and utilize the Commitment of the Granting Lender as
if, and to the same extent, such Loans were made by such Granting Lender.
(c) Each party hereto agrees that no SPC shall be liable for any
indemnity or payment under this Agreement for which a Granting Lender would
otherwise be liable so long as, and to the extent that, the Granting Lender
provides such indemnity or makes such payment. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial paper
or other senior Indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under
the laws of the United States or any State thereof arising out of or
relating to transactions under this Agreement or the other Loan Documents.
(d) Notwithstanding anything to the contrary contained in this
Agreement, an SPC may disclose on a confidential basis any nonpublic
information relating to Loans made by such SPC hereunder to any rating
agency, commercial paper dealer or provider of any surety or guarantee to
such SPC.
(e) This Section 9.14 may not be amended without the prior
written consent of the Granting Lenders on behalf of which each SPC has
made all or any part of its Loans which remain outstanding at the time of
such amendment.
SECTION 9.15. Release of Subsidiaries. (a) If (i) the Agent
receives a certificate from the chief executive officer, the chief
financial officer or treasurer of the Borrower certifying as of the date of
that certificate that, after the consummation of the transaction or series
of transactions described in reasonable detail satisfactory to the
Administrative Agent in such certificate on such date, the Subsidiary Loan
Party identified in such certificate will no longer be a Subsidiary of the
Company and (ii) such transactions are consummated on such date in
accordance with and without violating the provisions of this Agreement or
any other Loan Document then such Subsidiary's Guarantee shall
automatically terminate and such Subsidiary shall cease to be a party to
any Loan Document.
(b) If any of the Collateral shall be sold or disposed of by any
Loan Party to a Person other than the Borrower or a Subsidiary of the
Borrower in a transaction permitted under the Credit Agreement or consented
to by the Required Lenders (or such greater number of Lenders the consent of
which is required hereunder), such Collateral shall be automatically released
from the Lien created under the Loan Documents.
(c) If all of the capital stock of any Subsidiary Loan Party shall
be sold or disposed of to a Person other than the Borrower or a Subsidiary of
the Borrower in a transaction permitted under the Credit Agreement or
consented to by the Required Lenders (or such greater number of Lenders the
consent of which is required hereunder), such Subsidiary Loan Party shall be
automatically released from its obligations under the Loan Documents to which
it is a party.
(d) No such termination or cessation shall release, reduce, or
otherwise adversely affect the obligations of any other Loan Party under this
Agreement, any other Guarantee, or any other Loan Document, all of which
obligations continue to remain in full force and effect.
(e) The Agent shall, at the Borrower's expense, execute such
documents as the Company may reasonably request to evidence such termination
or cessation, as the case may be.
SECTION 9.16. Effingham Sale/Leaseback. Notwithstanding anything
contained in Sections 6.01, 6.02, 6.03 and 6.04 hereof to the contrary, the
Borrower and its Restricted Subsidiaries may enter into a sale and
leaseback transaction with respect to the Loan Parties' Effingham, Illinois
building; provided that Attributable Debt in respect of any lease of the
Borrower and its Restricted Subsidiaries entered into as part of such sale
and leaseback shall not exceed $2,700,000 in the aggregate.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
MCLEODUSA INCORPORATED,
by ------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
individually and as Agent,
by ------------------------------------
Name:
Title:
SIGNATURE PAGE TO THE MCLEODUSA
INCORPORATED CREDIT AGREEMENT
DATED AS OF APRIL 16, 2002
Name of Institution: _____________________________
by
_______________________________
Name:
Title:
SCHEDULE 2.01
COMMITMENTS
- ------------------------------------------------------------------------------
Lender Commitments
- ------------------------------------------------------------------------------
JPMorgan Chase Bank $35,000,000
One Chase Manhattan Plaza,
8th Floor
New York, NY 10005
Attention: Ms. Gloria Javier
Facsimile: 212-552-5658
- ------------------------------------------------------------------------------
Bank of America, N.A. $20,000,000
335 Madison Avenue
New York, NY 10017
Attention: Mr. George Kinne
Facsimile: 212-503-7080
- ------------------------------------------------------------------------------
Credit Suisse First Boston $20,000,000
Eleven Madison Avenue
New York, NY 10010
Attention: David Sawyer
Facsimile: 212-325-8314
- ------------------------------------------------------------------------------
Citicorp USA, Inc. $15,000,000
250 West Street (8th Floor)
New York, NY 10013
Attention: Michael C. Becker
Facsimile: 212-723-3899
Attention: Marni McManus
Facsimile: 212-723-3964
Firstar Bank, N.A. $8,000,000
- ------------------------------------------------------------------------------
Special Assets Group, MK-JS-5N
777 E. Wisconsin Avenue
Milwaukee, WI 53202
Attention: Dale L. Welke
Facsimile: 414-765-4332
- ------------------------------------------------------------------------------
The Bank of Nova Scotia $8,000,000
One Liberty Plaza (26th Floor)
New York, NY 10006
Attention: Robert Cole
Facsimile: 212-225-5090
- ------------------------------------------------------------------------------
Goldman Sachs Credit Partners, L.P. $4,000,000
8 Broad Street (6th Floor)
New York, NY 10004
Attention: Sandra Stulberger
Facsimile: 212-357-4597
Attention: Barbara Aaron
Facsimile: 212-428-1243
- ------------------------------------------------------------------------------
SCHEDULE 2.11(c)
NON-CORE ASSETS
---------------
Asset Description
- ----- -----------
DTG/ATS South Dakota ILEC, CLEC and
cable assets
Splitrock National data network
CapRock Services Off-shore oil service
Greene County Local cable operator
Iowa/ATS Cedar Rapids cable and telco
overbuild
IBS Telecom equipment
Operator Services 411 services
Public Services Pay phone services
Ruffalo CODY Telemarketing
CMR Telemarketing
Inventory Excess telecommunications
equipment
Gulfstream V and other aircraft Aircraft
Effingham, Illinois building Building
Facilities Idle and excess facilities
identified for sale or
consolidation and having an
estimated value of $15,280,000
in the aggregate as of
September 30, 2001