<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 27, 1998
-------------------------------
IXC Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-20803 74-2644120
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
1122 Capital of Texas Highway South, Austin, Texas 78746
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (512) 328-1112
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Not applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On October 27, 1998, IXC Communications, Inc. (the "Company") entered
into a credit agreement arranged by NationsBanc Montgomery Securities LLC that
provides the Company with a $600 million credit facility. In connection with
the credit facility, a copy of the Credit Agreement is attached hereto as
Exhibit 10.1 and is incorporated by reference herein.
Also attached as Exhibit 99.1 is the press release issued by the
Company dated October 28, 1998 which is hereby incorporated by reference
herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
10.1 Credit Agreement dated October 27, 1998 among IXC
Communications Services, Inc., the Lenders (as
defined therein), NationsBank, N.A., NationsBanc
Montgomery Securities LLC, Credit Suisse First
Boston, Goldman Sachs Credit Partners L.P., TD
Securities (USA), Inc. and Export Development
Corporation
99.1 Press release dated October 28, 1998
2.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 3, 1998
IXC Communications, Inc.
By: /s/ Stuart K. Coppens
------------------------------
Stuart K. Coppens,
Vice President of Finance and
Chief Accounting Officer
3.
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
10.1 Credit Agreement dated October 27, 1998 among IXC Communications
Services, Inc., the Lenders (as defined therein), NationsBank,
N.A., NationsBanc Montgomery Securities LLC, Credit Suisse First
Boston, Goldman Sachs Credit Partners L.P., TD Securities (USA),
Inc. and Export Development Corporation
99.1 Press release dated October 28, 1998
4.
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EXHIBIT 10.1
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$600,000,000
CREDIT AGREEMENT
AMONG
IXC COMMUNICATIONS SERVICES, INC.
AND
NATIONSBANK, N.A.
AS ADMINISTRATIVE AGENT
AND
NATIONSBANC MONTGOMERY SECURITIES LLC
AS LEAD ARRANGER
CREDIT SUISSE FIRST BOSTON
GOLDMAN SACHS CREDIT PARTNERS L.P.
TD SECURITIES (USA), INC.
EXPORT DEVELOPMENT CORPORATION
AS CO-SYNDICATION AGENTS
AND
LENDERS
DATED AS OF OCTOBER 27, 1998
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$600,000,000
IXC COMMUNICATIONS SERVICES, INC.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
1.01. Definitions.................................................................1
1.02. Accounting and Other Terms.................................................26
ARTICLE II. THE LOAN FACILITY
2.01. Loans......................................................................27
2.02. Making Advances............................................................27
2.03. Evidence of Debt for Borrowed Money........................................29
2.04. Optional Prepayments.......................................................30
2.05. Mandatory Prepayments......................................................30
2.06. Repayment..................................................................31
2.07. Interest...................................................................31
2.08. Default Interest...........................................................32
2.09. Continuation and Conversion Elections......................................32
2.10. Fees.......................................................................33
2.11. Reduction of Commitments...................................................33
2.12. Funding Losses.............................................................35
2.13. Computations and Manner of Payments........................................36
2.14. Yield Protection; Changed Circumstances....................................37
2.15. Use of Proceeds............................................................40
2.16. Collateral and Collateral Call.............................................40
2.17. Conditions Precedent to the Making of the Special Purpose Loan.............41
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit..............................................44
3.02. Letters of Credit Fee......................................................45
3.03. Reimbursement Obligations..................................................45
3.04. Lenders' Obligations.......................................................46
3.05. Administrative Agent's Obligations.........................................47
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance and the Issuance of the
Initial Letter of Credit.................................................47
4.02. Conditions Precedent to All Advances and Letters of Credit.................50
</TABLE>
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<TABLE>
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PAGE
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<S> <C> <C>
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties.............................................51
5.02. Survival of Representations and Warranties.................................59
ARTICLE VI. GENERAL COVENANTS
6.01. Preservation of Existence and Similar Matters..............................59
6.02. Business; Compliance with Applicable Law. .................................59
6.03. Maintenance of Properties..................................................60
6.04. Accounting Methods and Financial Records...................................60
6.05. Insurance..................................................................60
6.06. Payment of Taxes and Claims................................................60
6.07. Visits and Inspections.....................................................60
6.08. Payment of Debt for Borrowed Money.........................................60
6.09. Use of Proceeds............................................................60
6.10. Indemnity..................................................................61
6.11. Environmental Law Compliance...............................................62
6.12. Acquisitions, Generally....................................................63
6.13. Subsidiary Designation.....................................................63
6.14. Subsidiary Creation or Acquisition.........................................63
6.15. Year 2000 Compliance.......................................................63
6.16. Post Closing UCC Searches..................................................63
6.17. Post Closing Acquisition of Assets, Properties and Contractual
Arrangements.............................................................63
6.18. Post Closing Grant of Liens................................................64
ARTICLE VII. INFORMATION COVENANTS
7.01. Quarterly Financial Statements and Information.............................64
7.02. Annual Financial Statements and Information................................64
7.03. Compliance Certificates....................................................65
7.04. Copies of Other Reports and Notices........................................65
7.05. Notice of Litigation, Default and Other Matters............................66
7.06. ERISA Reporting Requirements...............................................66
ARTICLE VIII. NEGATIVE COVENANTS
8.01. Financial Covenants........................................................67
8.02. Debt for Borrowed Money....................................................69
8.03. Liens......................................................................70
8.04. Investments................................................................70
8.05. Liquidation, Disposition or Acquisition of Assets, Merger,
New Subsidiaries.........................................................72
8.06. Guaranties; Contingent Liabilities.........................................74
8.07. Restricted Payments........................................................74
</TABLE>
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
8.08. Affiliate Transactions.....................................................76
8.09. Compliance with ERISA......................................................76
8.10. Capital Stock..............................................................77
8.11. Sale and Leaseback.........................................................77
8.12. Sale or Discount of Receivables............................................77
8.13. Limitation on Restrictive Agreements.......................................77
8.14. Amendment of Material Agreements. ........................................78
8.15. Name Changes, Changes Affecting Pledged Stock. ...........................78
8.16. Unrestricted Subsidiaries and Mutual Signal. .............................78
8.17. Limitation on IRU Agreements...............................................78
8.18. Limitation on Unrestricted Subsidiaries. .................................79
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default..........................................................79
9.02. Remedies upon Default......................................................83
9.03. Cumulative Rights..........................................................83
9.04. Waivers....................................................................84
9.05. Performance by Administrative Agent or any Lender..........................84
9.06. Expenditures...............................................................84
9.07. Control....................................................................84
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. Authorization and Action...................................................84
10.02. Administrative Agent's Reliance, Etc.......................................85
10.03. NationsBank, N.A. and Affiliates...........................................85
10.04. Lender Credit Decision.....................................................85
10.05. Indemnification by Lenders.................................................86
10.06. Successor Administrative Agent.............................................86
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers.....................................................87
11.02. Notices....................................................................87
11.03. Parties in Interest........................................................89
11.04. Assignments and Participations.............................................89
11.05. Sharing of Payments........................................................90
11.06. Right of Set-off...........................................................91
11.07. Costs, Expenses, and Taxes.................................................91
11.08. Rate Provision.............................................................92
11.09. Severability...............................................................92
11.10. Exceptions to Covenants....................................................92
11.11. Counterparts...............................................................93
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL........................................93
11.13. ENTIRE AGREEMENT...........................................................93
</TABLE>
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<TABLE>
<CAPTION>
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
<S> <C>
Schedule 1.01 - Description of PSINet Shares
Schedule 1.02 - Unrestricted Subsidiaries as of the Closing Date
Schedule 1.03 - Certain Owners of Capital Stock of the Parent
Schedule 1.04 - Restricted Subsidiaries as of the Closing Date
Schedule 5.01(a) - Jurisdictions of Qualification, Ownership and Capital Structure - the
Parent, the Borrower and their Subsidiaries
Schedule 5.01(f) - Non-Compliance with FCC or any applicable PUC
Schedule 5.01(h) - Existing Litigation of the Borrower, the Parent and their Subsidiaries
Schedule 5.01(r) - Description of Pledged Stock
Schedule 8.02 - Existing Debt and Liabilities of the Borrower, the Parent and the
Restricted Subsidiaries
Schedule 8.03 - Existing Liens of the Borrower, the Parent and the Restricted
Subsidiaries
Schedule 8.04 - Existing Investments of the Borrower, the Parent and their Restricted
Subsidiaries
Schedule 8.07 - Permitted Consulting Fee Payments
Schedule 8.08 - Permitted Affiliate Non-Market Transactions
Schedule 8.16 - Permitted Transactions among the Borrower, the Parent and the
Restricted Subsidiaries and the Unrestricted Subsidiaries
EXHIBITS
Exhibit A - Form of Revolver Note
Exhibit B - Form of Term Loan Note
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Borrowing Notice
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Unlimited Guaranty
Exhibit H - Form of Pledge Agreement
</TABLE>
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$600,000,000
IXC COMMUNICATIONS SERVICES, INC.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of October 27, 1998, among IXC
COMMUNICATIONS SERVICES, INC., a Delaware corporation (the "Borrower"), the
Lenders (as defined below), NATIONSBANK, N.A., as a Lender and Administrative
Agent, NATIONSBANC MONTGOMERY SECURITIES LLC, as Lead Arranger, and CREDIT
SUISSE FIRST BOSTON, GOLDMAN SACHS CREDIT PARTNERS L.P., TD SECURITIES(USA),
INC. and EXPORT DEVELOPMENT CORPORATION, each as a Lender and Co-Syndication
Agents.
BACKGROUND
WHEREAS, the Borrower, the Administrative Agent and the Lenders hereby
enter into a Credit Agreement which provides for 1) one revolving loan facility
in the amount of $150,000,000 (which such loan facility shall also include a
letter of credit availability of not more than $20,000,000), 2) one term loan
facility in the amount of $200,000,000, and 3) one uncommitted special purpose
loan facility that can under certain terms and conditions increase up to an
amount of $250,000,000) .
AGREEMENT
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Administrative Agent" means NationsBank, N.A., in its capacity as
Administrative Agent hereunder, or any successor Administrative Agent appointed
pursuant to Section 10.06 hereof.
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof, which shall include Revolver Advances, Special Purpose
Advances (if any), Term Loan Advances and Refinancing Advances.
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"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled By or is Under Common Control
with another Person.
"Agreement" means this Credit Agreement, as hereafter amended, modified,
increased, extended, restated or supplemented from time to time.
"Annualized Operating Cash Flow" means the product of (a) Operating Cash
Flow for the most recently completed two fiscal quarters, times (b) two.
"Applicable Law" means (a) in respect of any Person, all provisions of
Laws of Tribunals applicable to such Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in question
is a party and (b) in respect of contracts made or performed in the State of
Texas, "Applicable Law" also means the laws of the United States of America,
including, without limiting the foregoing, 12 USC Sections 85 and 86, as amended
to the date hereof and as the same may be amended at any time and from time to
time hereafter, and any other statute of the United States of America now or at
any time hereafter prescribing the maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas, including, without
limitation, Article 5069-1H, Title 79, Revised Civil Statutes of Texas, 1925,
("Art. 1H"), as amended, if applicable, and if Art. 1H is not applicable,
Article 5069-1D, Title 79, Revised Civil Statutes of Texas, 1925, ("Art. 1D"),
as amended, and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided however, that the Borrower agrees that the provisions of
Chapter 346 of the Texas Finance Code, as amended, shall not apply to Advances
hereunder.
"Applicable Margin" means, (a) with respect to LIBOR Advances, 2.500%
per annum, and (b) with respect to Base Advances, 1.250% per annum provided
that, after the date which the Administrative Agent and the Lenders receive a
Compliance Certificate required to be delivered in accordance with the terms of
Section 7.03 hereof using the 1998 fourth calendar quarter financials of the
Borrower and the Parent, the Applicable Margin will be adjusted as set forth in
the last paragraph of this definition to the following per annum percentages
applicable in the following situations:
<TABLE>
<CAPTION>
LIBOR Advance Base Advance
Applicability Percentage Percentage
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<S> <C> <C>
(i) If the Total 2.500% 1.250%
Leverage Ratio is
greater than or equal to
6.50 to 1.00
(ii) If the Total 2.250% 1.000%
Leverage Ratio is less
than 6.50 to 1.00 but
is greater than or equal to
to 5.50 to 1.00
(iii) If the Total 2.000% 0.750%
Leverage Ratio is less
than 5.50 to 1.00
but is greater than or equal
to 4.50 to 1.00
</TABLE>
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<TABLE>
<CAPTION>
LIBOR Advance Base Advance
Applicability Percentage Percentage
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<S> <C> <C>
(iv) If the Total 1.500% 0.250%
Leverage Ratio is less
than 4.50 to 1.00
but is greater than or equal
to 3.50 to 1.00
(v) If the Total 1.250% 0.000%
Leverage Ratio is less
than 3.50 to 1.00
but is greater than or equal
to 2.50 to 1.00
(vi) If the Total 1.000% 0.000%
Leverage Ratio is less
than 2.50 to 1.00
</TABLE>
After the date which the Administrative Agent and the Lenders receive a
Compliance Certificate in accordance with the terms of Section 7.01 using the
fourth calendar quarter financials of the Borrower and the Parent, the
Applicable Margin payable by the Borrower shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a quarterly
basis according to the performance of the Borrower, the Parent and the
Restricted Subsidiaries as tested by the Total Leverage Ratio. Except as set
forth in the following sentence, any such increase or reduction in the
Applicable Margin provided for herein shall be effective three Business Days
after receipt by Administrative Agent of the applicable financial statements and
corresponding Compliance Certificate. If financial statements and a Compliance
Certificate of the Borrower setting forth the Total Leverage Ratio are not
received by the Administrative Agent by the date required pursuant to Section
7.01 or 7.02 hereof, the Applicable Margin shall be determined as if the Total
Leverage Ratio exceeds 6.50 to 1.00 until such time as such financial statements
and Compliance Certificate are received. For the final quarter of any fiscal
year of the Borrower, the Borrower may provide the unaudited financial
statements of the Borrower and the Parent, subject only to year-end adjustments,
for the purpose of adjusting the Applicable Margin.
"Applicable Specified Percentage" means with respect to any Lender, in
the case of the Revolver Loan, such Lender's Revolver Specified Percentage, in
the case of the Special Purpose Loan, such Lender's Special Purpose Specified
Percentage and in the case of the Term Loan, such Lender's Term Loan Specified
Percentage.
"Application" means any stand-by letter of credit application delivered
to Administrative Agent for or in connection with any stand-by Letter of Credit
pursuant to Article III hereof, in Administrative Agent's standard form for
stand-by letters of credit.
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"Art. 1D" has the meaning specified in the definition herein of
"Applicable Law".
"Art. 1H" has the meaning specified in the definition herein of
"Applicable Law".
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee in accordance with the terms and conditions of
Section 11.04 hereof, and accepted by Administrative Agent, in the form of
Exhibit F hereto.
"Auditor" means Ernst & Young or other independent certified public
accountants selected by the Borrower and acceptable to Administrative Agent.
"Authorized Officer" means, with respect to the Parent, the Borrower and
their Subsidiaries respectively, any of the Chief Executive Officer, the
President, the Chief Financial Officer, Chief Accounting Officer, the Vice
President of Finance, the General Counsel or the Treasurer of the Borrower.
"Backbone Fiber" means a fiber connecting Los Angeles, CA and New York,
New York.
"Bank Affiliate" means the holding company of any Lender, or any wholly
owned direct or indirect subsidiary of such holding company or of such Lender.
"Base Advance" means an Advance under the Revolver Loan, the Special
Purpose Loan or the Term Loan, as applicable, bearing interest at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a)
the Highest Lawful Rate, and (b) the sum of the Applicable Margin plus the
higher of (i) a fluctuating rate per annum as shall be in effect from time to
time announced or published by NationsBank, N.A. as its prime rate, and which
may not necessarily be the lowest interest rate charged by NationsBank, N.A.,
and (ii) the Federal Funds Rate in effect at such time plus .50%.
"Board of Directors" means the Board of Directors of the Parent or any
committee thereof duly authorized to act on behalf of such Board.
"Borrower Deposit Account" means that certain deposit account of the
Borrower at the Dallas, Texas Main Street location of NationsBank, N.A. on which
the Administrative Agent, on behalf of the Lenders, has a first and prior Lien
and security interest to secure the Obligations hereunder.
"Borrowing" means all Advances borrowed on the same day of the same
Type.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Business Day" means a day on which banks are open for the transaction
of business as required by this Agreement in Dallas, Texas and Toronto, Ontario
and, with respect to any LIBOR Advance, a domestic business day in London,
England and a day on which commercial banks are open for international business
in London, England (including dealings in United States dollar deposits), and as
otherwise relevant to the determination to be made or the action to be taken.
4
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"Capital Expenditures" means capital expenditures, as defined in
accordance with GAAP.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation, each class of partnership interests
(including without limitation, general, limited and preference units) in any
Person that is a partnership, and each membership interest in any Person that is
a limited liability company.
"Closing Date" means the date hereof.
"Change of Control" means the occurrence of any one or more of the
following events: (i) any Person that is not a Present Holder acquires Control
of the Parent, (ii) any event which constitutes a Designated Change of Control,
(iii) any event which constitutes any "change of control" as defined in the any
of the Existing Financing Documentation, (iv) any event which results in the
Parent's failure to own and control, directly or indirectly, 100% of the Capital
Stock of the Borrower, or (v) any event which results in the Parent's and/or the
Borrower's failure to own and control 100% of the Capital Stock of the
Restricted Subsidiaries, except Mutual Signal which must remain at least 85%
owned, the Subsidiaries of Mutual Signal, and Capital Stock of Restricted
Subsidiaries sold pursuant to an asset sale permitted by the terms of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and any
reference to any provision of the Code shall include all successor provisions
thereto.
"Collateral" has the meaning ascribed thereto in Section 2.16(a) hereof.
"Commitment" means the Revolver Commitment and the Special Purpose
Commitment, if any.
"Commitment Fee" means the Revolver Commitment Fee and, if the Special
Purpose Loan is a revolving loan, any commitment fee agreed to in accordance
with the terms of Section 2.17 hereof.
"Communications Act" means, collectively, the Communications Act of
1934, as amended through the date hereof (including without limitation, by the
Telecommunications Act of 1996), and as further amended, and the rules and
regulations promulgated thereunder, as from time to time in effect.
"Compliance Certificate" means a certificate of an Authorized Officer in
the form of Exhibit C hereto, (a) certifying that such individual has no
knowledge that a Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action being taken or proposed to be taken with
respect thereto, (b) setting forth detailed calculations with respect to the
covenants described in Section 8.01 hereof and (c) certifying to the appropriate
Applicable Margin.
"Consequential Loss" with respect to (a) the Borrower's payment of all
or any portion of the then-outstanding principal amount of a LIBOR Advance on a
day other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the
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maturity of a Note, (b) subject to Administrative Agents' prior consent, a LIBOR
Advance made on a date other than the date on which the Advance is to be made
according to Section 2.02(a) or Section 2.09 hereof to the extent such Advance
is made on such other date at the request of the Borrower, or (c) any of the
circumstances specified in Sections 2.04, 2.05, 2.06 and 2.11 hereof on which a
LIBOR Advance or a Letter of Credit may cause a Consequential Loss to be
incurred, means any loss, cost or expense determined in accordance with the
formula set forth below incurred by any Lender as a result of the timing of the
payment or Advance or in liquidating, redepositing, redeploying or reinvesting
the principal amount so paid or affected by the timing of the Advance or the
circumstances described in Sections 2.04, 2.05, 2.06 or 2.11 hereof, which
amount shall be the sum of (i) the interest that, but for the payment or timing
of Advance, such Lender would have earned in respect of that principal amount,
reduced, if such Lender is able to redeposit, redeploy, or reinvest the
principal amount, by the interest earned by such Lender as a result of
redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim.
"Contingent Liability" means, as to any Person, any obligation or
Guaranty, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Debt or obligation of any other Person in
any manner, whether directly or indirectly, including without limitation any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Debt, (b) to purchase Property or services for the purpose of assuring
the owner of such Debt of its payment, or (c) to maintain the solvency, working
capital, equity, cash flow, fixed charge or other coverage ratio, or any other
financial condition of the primary obligor so as to enable the primary obligor
to pay any Debt or to comply with any agreement relating to any Debt or
obligation, but excluding endorsement of checks, drafts and other instruments in
the ordinary course of business, provided that this definition of "Contingent
Liability" shall not include Guaranties by the Parent, the Borrower or any
Subsidiary of the Borrower and/or the Parent of any obligations of the Borrower
or any wholly owned Subsidiary of the Borrower or the Parent that has executed
an Unlimited Guaranty.
"Continue," "Continuation" and "Continued" each refer to the
continuation pursuant to Section 2.09 hereof of a LIBOR Advance from one
Interest Period to the next Interest Period.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise).
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
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"Cumulative Convertible" means that certain $155,000,000 6 and 3/4%
Cumulative Convertible Preferred Stock issued by the Parent, including all such
Capital Stock issued in lieu of the payment of dividends.
"Cumulative Convertible Documentation" means that certain Certificate of
Designation with respect to the Cumulative Convertible, and all other agreements
and other documentation relating to the Cumulative Convertible.
"Debt" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified on the balance sheet as
liabilities, and in any event including (without duplication) (a) Capital
Leases, (b) Contingent Liabilities that are required to be recorded in
accordance with GAAP (including, without limitation, letters of credit and
reimbursement obligations with respect to letters of credit), (c) liabilities
secured by any Lien on any Property, regardless of whether such secured
liability is with or without recourse, and (d) installment payment non-compete
agreements.
"Debt for Borrowed Money" means, with respect to the Parent, the
Borrower and the Restricted Subsidiaries, at any date, without duplication, all
Debt of the Borrower, the Parent and the Restricted Subsidiaries that
constitutes (a) all obligations of the Borrower, the Parent and such Restricted
Subsidiaries for borrowed money, letters of credit (or applications for letters
of credit) or other similar instruments, (b) all obligations of the Borrower,
the Parent and the Restricted Subsidiaries evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of the Borrower, the Parent
and the Restricted Subsidiaries to pay the deferred purchase price of property
or services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations under Capital Leases of the Borrower, the Parent
and the Restricted Subsidiaries, (e) installment payment non-compete agreements
for the Borrower, the Parent and each Restricted Subsidiary, and (f) all
Contingent Liabilities relating to obligations of another Person (other than a
wholly owned Restricted Subsidiary of the Borrower or the Parent that has
executed an Unlimited Guaranty, with respect to Debt of another wholly owned
Restricted Subsidiary or the Borrower or the Parent that has executed an
Unlimited Guaranty) of the type described in (a) through (e) above.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"Default" means any event specified in Section 9.01 hereof, whether or
not any requirement in connection with such event for the giving of notice,
lapse of time, or happening of any further condition has been satisfied.
"Designated Change of Control" means the occurrence of any of the
following events (each a "Designated Change of Control"):
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (i) such
person shall be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage
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<PAGE> 13
of time and except that any person that is deemed to have beneficial
ownership of shares solely as a result of being part of a group pursuant
to Rule 13d-5(b)(i) shall not be deemed to have beneficial ownership of
any shares held by a Permitted Holder forming a part of such group),
directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of the Parent (for the purposes of this clause (i),
such other person shall be deemed to beneficially own any Voting Stock
of a specified corporation held by a parent corporation, if such other
person is the beneficial owner (as defined in this clause (i)), directly
or indirectly, of more than 35% of the voting power of the Voting Stock
of such parent corporation and the Permitted Holders beneficially own
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly
or indirectly, in the aggregate a lesser percentage of the voting power
of the Voting Stock of such parent corporation and do not have the right
or ability by voting power, contract or otherwise to elect or designate
for election a majority of the board of directors of such parent
corporation);
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Parent was approved by a vote of a majority of the directors of the
Parent then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office; provided, however, that any
directors elected by holders of Preferred Stock of the Parent pursuant
to any voting rights provisions included in the certificate of
designation relating to such Preferred Stock shall be excluded in making
any determination pursuant to this clause (ii), or
(iii) the merger or consolidation of the Parent with or into
another Person or the merger of another Person with or into the Parent,
or the sale of all or substantially all the assets of the Parent to
another Person (other than a Person that is controlled by the Permitted
Holders), and, in the case of any such merger or consolidation, the
securities of the Parent that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of
the Voting Stock of the Parent are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate
voting power of the Voting Stock of the surviving corporation.
"Designated Restricted Subsidiaries" means those Subsidiaries of the
Parent from time to time defined as Restricted Subsidiaries by the Junior
Exchangeable Documentation.
"Distribution" means, as to any Person, (a) any declaration or payment
of any distribution or dividend (other than a common stock dividend) on, or the
making of any pro rata distribution, loan, advance, or investment to or in any
holder of, any partnership interest or shares of Capital Stock or other equity
interest of such Person (or the establishment of a sinking fund or otherwise
setting aside of funds for any such purpose), or (b) any purchase, redemption,
or other acquisition or retirement for value of any shares of partnership
interest or Capital Stock or other equity interest of such Person (or the
establishment of a sinking fund or otherwise setting aside of funds for any such
purpose).
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<PAGE> 14
"Environmental Claim" means any written notice by any Tribunal alleging
liability for damage to the environment, or by any Person alleging liability for
personal injury (including sickness, disease or death), resulting from or based
upon (a) the presence or release (including sudden or non-sudden, accidental or
non-accidental, leaks or spills) of any Hazardous Material at, in or from
property, whether or not owned by the Parent, the Borrower or any of its
Subsidiaries, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss.9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss.1251 et seq.), the Clean Air Act (42 U.S.C.
ss.7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all analogous future federal, or present or future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Borrower or any Obligor or any
Unrestricted Subsidiary, or is under common control with Borrower or any Obligor
or any Unrestricted Subsidiary, within the meaning of Section 414(c) of the
Code, and the regulations and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the meaning of
Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto
has been waived by the PBGC, (b) the issuance by the administrator of any Plan
of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), (c) the withdrawal by the Parent, the Borrower, any
Subsidiary of the Parent, or an ERISA Affiliate from a Multiple Employer Plan
during a Plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA, (d) the failure by the Borrower, the Parent, any
Subsidiary of the Parent, or any ERISA Affiliate to make a payment to a Plan
required under Section 302 of ERISA, (e) the adoption of an amendment to a Plan
requiring the provision of security to such Plan, pursuant to Section 307 of
ERISA, or (f) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
that constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan.
"Event of Default" means any of the events specified in Section 9.01 of
this Agreement, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Excluded Stock" means (i) 15% of the Capital Stock of Mutual Signal,
(ii) all of the Capital Stock of the Subsidiaries of Mutual Signal, (iii) 34% of
the Capital Stock of IXC Communications
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<PAGE> 15
Services Europe Limited, (iv) all of the Capital Stock of the Subsidiaries of
Unrestricted Subsidiaries, and (v) 100% of the Capital Stock of Switched
Services Communications, L.L.C.
"Existing Financing" means collectively, the Junior Exchangeable, the
Junior Convertible, the Cumulative Convertible, the Subordinated Notes and the
Senior Notes.
"Existing Financing Documentation" means collectively, the Junior
Exchangeable Documentation, the Junior Convertible Documentation, the Cumulative
Convertible Documentation, the Subordinated Notes Documentation, and the Senior
Notes Documentation.
"FCC" means the Federal Communications Commission, or any governmental
agency succeeding to the functions thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Dallas, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fee Letter" means that certain Fee Letter, dated October 27, 1998,
between the Parent, the Borrower and the Administrative Agent, and all other fee
letters executed among the Borrower and any Lender from time to time, as such
letters may be amended, modified, substituted, replaced, or increased from time
to time.
"Fixed Charges" means, for the Parent, the Borrower and the Restricted
Subsidiaries on a consolidated basis for the most recently completed 12 month
period, the sum of (a) Interest Expense, plus (b) required principal payments on
Total Debt (including as a result of a scheduled mandatory reduction of
Commitment), plus (c) Capital Expenditures, plus (d) permitted Restricted
Payments that were paid under Section 8.07(b) hereof.
"Fixed Charge Coverage Ratio" means, for the Borrower, the Parent and
the Restricted Subsidiaries on a consolidated basis on any date of
determination, the ratio of (a) the sum of (i) Operating Cash Flow for the most
recently completed 12 month period, plus (ii) that portion of the Unused
Facility Amount that the Borrower is able to borrow and remain in compliance
with Sections 8.01(a) and 8.01(b) hereof, minus cash income Taxes for the most
recently completed 12 month period, plus (iii) cash on hand of the Parent, the
Borrower and the Restricted Subsidiaries in excess of $10,000,000 on the first
day of such period of determination to (b) Fixed Charges.
"GAAP" means United States of America generally accepted accounting
principles applied on a consistent basis. Application on a consistent basis
shall mean that the accounting principles observed in a current period are
comparable in all material respects to those applied in a preceding period,
except for new developments or statements promulgated by the Financial
Accounting Standards Board and other changes in accounting methods permitted by
generally accepted accounting principles.
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<PAGE> 16
"Guarantors" means the Parent, each Restricted Subsidiary of the
Borrower and the Parent existing on the Closing Date or formed or acquired by
the Borrower and the Parent after the date hereof, and any direct or indirect
Restricted Subsidiary of the Borrower and the Parent from time to time
thereafter, provided that (a) Mutual Signal and the Subsidiaries of Mutual
Signal shall not be Guarantors hereunder, and (b) this definition shall not
include any Person who was a Guarantor at one time but was subsequently released
by the Administrative Agent and the Lenders in accordance with the terms of
Section 8.05 hereof.
"Guaranty" means a guaranty executed by any Person of the obligations of
another Person, or any agreement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes liable upon, the obligation of any other Person, or agrees
to maintain the net worth or working capital or other financial condition of any
other Person, or otherwise assures any creditor or such other Person against
loss, including, without limitation, any comfort letter, or take-or-pay contract
and shall include without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Hazardous Materials" means all materials subject to regulation under
any Environmental Law, including without limitation materials listed in 49
C.F.R. ss. 172.101, Hazardous Substances, explosive or radioactive materials,
hazardous or toxic wastes or substances, petroleum or petroleum distillates,
asbestos, or material containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean
Water Act, 33 U.S.C. ss. 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. ss. 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, any Lender is then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under Applicable
Law, the applicable rate ceiling shall be (a) the weekly ceiling described in
and computed in accordance with the provisions of Art. 1H, or (b) either the
annualized ceiling or quarterly ceiling computed pursuant to Section .008 of
Art. 1D; provided, however, that at any time the weekly ceiling, the annualized
ceiling or the quarterly ceiling, as applicable, shall be less than 18% per
annum or more than 24% per annum, the provisions of Sections .009(a), .009(b) or
.009(c) of said Art. 1D shall control for purposes of such determination, as
applicable.
"Income Tax Expense" means the aggregate income Taxes accrued by the
Parent, the Borrower and the Restricted Subsidiaries for the relevant period of
determination.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of
ERISA.
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<PAGE> 17
"Interest Coverage Ratio" means, on any date of determination for the
Parent, the Borrower and the Restricted Subsidiaries, the ratio of (a) Operating
Cash Flow for the most recently completed 12 month period to (b) the aggregate
amount of cash Interest Expense actually paid during the most recently completed
12 month period, provided that, for the first fiscal quarter ending after the
Closing Date, the Interest Coverage Ratio shall be calculated on the basis of
such first quarter, for the second fiscal quarter ending after the Closing Date,
the Interest Coverage Ratio shall be calculated on the basis of the prior two
fiscal quarters and for the third fiscal quarter ending after the Closing Date,
the Interest Coverage Ratio shall be calculated on the basis of the prior three
fiscal quarters.
"Interest Expense" means, for the Parent, the Borrower and the
Restricted Subsidiaries on a consolidated basis for any period of determination,
the gross interest expense for any period on Total Debt, determined in
accordance with GAAP, minus the sum of (a) interest income for such period, plus
(b) to the extent not included in the determination of such gross interest
expense, upfront costs or fees expended during such period in connection with
the execution and delivery of documentation relating to the Loan Papers.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date the Advance is made or continued as a LIBOR Advance and
ending one, two, three, six or, to the extent available as determined by
Administrative Agent, twelve months thereafter (as the Borrower shall select),
provided, however, that:
(a) the Borrower may not select any Interest Period that ends
after any principal repayment date unless, after giving effect to such
selection, the aggregate principal amount of LIBOR Advances having
Interest Periods that end on or prior to such principal repayment date,
shall be at least equal to the principal amount of Advances due and
payable on and prior to such date;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, however, that if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding
Business Day; and
(c) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower and
any Lender.
"Investment" means any acquisition of all or substantially all of the
assets of any Person, or any direct or indirect purchase or other acquisition
of, or a beneficial interest in, any Capital Stock or other securities of any
other Person, or any direct or indirect loan, advance, or capital contribution
to or investment in any other Person, including without limitation the
incurrence or sufferance of Debt or accounts receivable of any other Person that
are not current assets or do not arise from sales to that other Person in the
ordinary course of business.
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<PAGE> 18
"IRU" means an indefeasible right to use fiber or telecommunications
capacity.
"IRU Agreement" means an agreement pursuant to which an interest in an
IRU is sold or leased or otherwise transferred.
"Junior Convertible" means that certain $100,000,000 7 and 1/4% Junior
Convertible Preferred Stock issued by the Parent, including all such Capital
Stock issued in lieu of the payment of dividends.
"Junior Convertible Documentation" means that certain Certificate of
Designation with respect to the Junior Convertible, and all other agreements and
other documentation relating to the Junior Convertible.
"Junior Exchangeable" means that certain $300,000,000 12 and 1/2% Junior
Exchangeable Preferred Stock issued by the Parent, and all such Capital Stock
issued in lieu of the payment of dividends.
"Junior Exchangeable Documentation" means that certain Certificate of
Designation with respect to the Junior Exchangeable, and all other agreements
and other documentation relating to the Junior Exchangeable.
"Law" means any constitution, statute, law, ordinance, regulation, rule,
order, writ, injunction, or decree of any Tribunal.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each transferee which hereafter becomes a party to this Agreement
pursuant to Section 11.04 hereof or pursuant to an amendment to this Agreement,
so long as each is owed any portion of the Obligation or is obligated to make
any Advance hereunder.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of each Lender, branch or affiliate
identified on each Lender's signature page hereto, and (b) subsequently, such
other office of each Lender, branch or affiliate as each Lender may designate to
the Borrower and Administrative Agent as the office from which the Advances of
each Lender will be made and maintained and for the account of which all
payments of principal and interest on the Advances and the Commitment Fee will
thereafter be made. Lenders may have more than one Lending Office for the
purpose of making Base Advances and LIBOR Advances.
"Letter of Credit Commitment" means, on any date of determination, an
amount equal to the lesser of (a) $20,000,000 and (b) the Revolver Commitment
minus all outstanding Revolver Advances under the Revolver Loan.
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<PAGE> 19
"Letters of Credit" means the irrevocable standby letters of credit
issued by Administrative Agent under and pursuant to Article III hereof, as each
may be amended, modified, substituted, increased, replaced, renewed or extended
from time to time.
"LIBOR Advance" means an Advance under the Revolver Loan, the Special
Purpose Loan or the Term Loan, bearing interest at the LIBOR Rate.
"LIBOR Lending Office" means, with respect to each Lender, the office
designated as its "LIBOR Lending Office" on each Lender's signature page hereto,
or such other office of Lender or any of its affiliates hereafter designated by
notice to the Borrower and Administrative Agent.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefore, a rate per annum equal to the lesser of (a) the Highest Lawful Rate
and (b) the sum of (i) the Applicable Margin, plus (ii) the rate per annum
(rounded upwards, if necessary, to the nearest one-one hundredth (1/100th) of
one percent (1%)) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period. If for any reason such rate is not available, the term
"LIBOR Rate" shall mean, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest one-one
hundredth (1/100th) of one percent (1%)) appearing on Reuters Screen LIBO page
as the London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"License" means, as to the Parent, the Borrower, or any Subsidiary of
the Borrower and/or the Parent, any license, permit, consent, certificate of
need, authorization, certification, accreditation, franchise, approval, or grant
of rights by, or any filing or registration with, any Tribunal or third Person
(including without limitation, the FCC or any applicable PUC) necessary for such
Person to own, build, maintain, or operate its business or Property.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
or charge of any kind, including without limitation any agreement to give or not
to give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement or other similar form of public notice under the
Laws of any jurisdiction (except for the filing of a financing statement or
notice in connection with an (a) operating lease or (b) the true consignment of
goods to the Parent, the Borrower or any Restricted Subsidiary as consignee).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted by or before any Tribunal or arbitrator, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
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<PAGE> 20
"Loans" means all three of the Revolver Loan, the Special Purpose Loan,
if any, and the Term Loan, and "Loan" means any one of the Revolver Loan, the
Special Purpose Loan or the Term Loan, as applicable in the context used.
"Loan Papers" means this Agreement, the Notes, the Pledge Agreement, the
Unlimited Guaranties, the Fee Letter[s], all agreements related to the Borrower
Deposit Account and the Parent Deposit Account, financing statements, any
Interest Rate Protection Agreement and related documents entered into by the
Borrower with any Lender or any Bank Affiliate, all Letters of Credit, all
Applications and all other agreements between the Parent, the Borrower or any
Restricted Subsidiary and the Administrative Agent related to any Letter of
Credit, other fee letters, Assignment and Acceptances, post-closing letters, all
security agreements, pledges, mortgages, deeds of trust, assignments, leasehold
mortgages, leasehold deeds of trust, collateral assignments and other agreements
and documentation relating to the Liens securing the Obligations, and all other
documents, instruments, agreements, or certificates executed or delivered from
time to time by any Person in connection with this Agreement or as security for
the Obligations hereunder, granting Collateral or otherwise, as each such
agreement may be amended, modified, substituted, replaced or extended from time
to time.
"Majority Lenders" means any combination of Lenders having at least
51.00% of the aggregate amount of the sum of (a) outstanding Commitments plus
(b) outstanding Term Loan Advances, plus (c) if the Special Purpose Loan is a
term loan, the aggregate amount of outstanding Special Purpose Advances,
provided, however, that (i) if the Revolver Commitment has been terminated, then
(a) above will be the amount of the outstanding Revolver Advances and (ii) if
the Special Purpose Loan is a revolving loan but the Special Purpose Commitment
has been terminated, then (a) above will include the amount of the outstanding
Special Purpose Advances.
"Material Adverse Change" means any circumstance or event that is or
could reasonably be expected to (a) be material and adverse to the financial
condition, business, operations, prospects, or Properties of the Parent, the
Borrower and the Restricted Subsidiaries on a consolidated basis, (b) materially
and adversely affect the validity or enforceability of any Loan Paper or (c)
cause a Default or Event of Default.
"Maturity Date" means the earlier of October 24, 2003, or such earlier
date on which the total amount of outstanding Obligations are due and payable
(including, without limitation, whether by acceleration, scheduled reduction of
the Commitment to zero, mandatory or voluntary commitment reduction of the
Commitment to zero, installment payments or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, a Lender is permitted to charge on the Obligations.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Parent, the Borrower, any Subsidiary of the
Parent or the Borrower, or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions, such plan being
maintained pursuant to one or more collective bargaining agreements.
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<PAGE> 21
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Parent, the Borrower, any Subsidiary of the Parent or the Borrower, or any ERISA
Affiliate and at least one Person other than the Borrower, the Parent, any
Subsidiary of the Borrower or the Parent, and any ERISA Affiliate, or (b) was so
maintained and in respect of which the Borrower, the Parent, any Subsidiary of
the Borrower or the Parent, or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Mutual Signal" means Mutual Signal Holding Corporation, a Subsidiary of
the Borrower the common stock of which is 85% owned by the Borrower and 15%
owned by Frontier Corporation.
"Net Proceeds" means the gross cash proceeds received by the Borrower,
the Parent or any Restricted Subsidiary in connection with or as a result of any
asset sale not in the ordinary course of business, minus (so long as each of the
following are estimated in good faith by the management of the Parent and
certified to the Lenders in reasonable detail by an Authorized Officer) (a)
actual taxes estimated in good faith by the Board of Directors incurred as a
result of such sale (after giving effect to all tax benefits available to the
Parent, the Borrower or such Restricted Subsidiary), and (b) reasonable and
customary transaction costs payable by the Parent, the Borrower or any
Restricted Subsidiary that are related to such sale and payable to a Person
other than an Affiliate of the Parent, the Borrower and its Subsidiaries.
"Notes" means each of the Revolver Notes, Special Purpose Notes (if any)
and Term Loan Notes, and "Note" means any of the Revolver Note, the Special
Purpose Note or the Term Loan Note, as applicable in the context used, and in
each case, with any extension, renewal or amendment thereof, or substitution
therefor.
"Obligations" means all present and future obligations, indebtedness and
liabilities, and all renewals and extensions of all or any part thereof, of the
Borrower and each other Obligor to Lenders and Administrative Agent arising
from, by virtue of, or pursuant to this Agreement, any of the other Loan Papers
and any and all renewals and extensions thereof or any part thereof, or future
amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Agent for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and consents, and in connection with the
enforcement or the collection of all or any part thereof, and reasonable
attorneys' fees incurred by the Lenders in connection with the enforcement or
the collection of all or any part of the Obligations during the continuance of
an Event of Default, in each case whether such obligations, indebtedness and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several. Without limiting the generality of the foregoing, "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other Person (other than Administrative Agent or Lenders) to Administrative
Agent or Lenders under any Loan Paper, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower, any other Obligor
or any other Person (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
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<PAGE> 22
"Obligor" means (a) the Borrower, (b) the Parent, (c) each Restricted
Subsidiary, (d) each other Person liable for performance of any of the
Obligations and (e) each other Person the Property of which secures the
performance of any of the Obligations.
"Operating Cash Flow" means, for the Parent, the Borrower and the
Restricted Subsidiaries, for any period, the consolidated net income (loss) for
such period taken as a single accounting period, plus the sum of the following
amounts for such period to the extent included in the determination of such
consolidated net income or loss, without duplication: (a) depreciation
(including any non cash impairment charges) expense, (b) amortization expense
and other non-cash charges, expenses or losses reducing income, (c) Interest
Expense, (d) Income Tax Expense and (e) extraordinary losses, minus the sum of
(i) extraordinary gains and (ii) non-cash income. Notwithstanding the foregoing,
the calculation of Operating Cash Flow in the second calendar quarter of 1998
shall exclude the one-time charge not in excess of $1,400,000 related to the
acquisition of Eclipse (formerly known as Network Long Distance, Inc.) on June
3, 1998.
"Parent" means IXC Communications, Inc., a Delaware corporation, and the
owner of 100% of the Capital Stock of the Borrower.
"Parent Deposit Account" means that certain deposit account of the
Parent at the Dallas, Texas Main Street location of NationsBank, N.A. on which
the Administrative Agent, on behalf of the Lenders, has a first and prior Lien
and security interest to secure the Obligations hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Acquisition" means acquisitions made by the Parent, the
Borrower or any Restricted Subsidiary of telecommunications or internet
businesses or related businesses, so long as in each case (a) there exists no
Default or Event of Default both before and after giving effect to any such
acquisition, (b) such acquired entity becomes a Restricted Subsidiary and
executes an Unlimited Guaranty of the Obligations, or such acquired assets are
acquired by a Restricted Subsidiary, and (c) the Borrower provides the
Administrative Agent and each Lender with information demonstrating pro forma
compliance with the terms of this Agreement through the Maturity Date, after
giving effect to such Permitted Acquisition, including, without limitation, each
provision of Section 8.01 hereof and Section 8.18 hereof, provided that (i) if
the Total Leverage Ratio is greater than or equal to 4.00 to 1.00, and the
aggregate purchase price for any such acquisition is in excess of $25,000,000,
then, in addition to the foregoing requirements either (A) any such acquired
entity or assets must have positive cash flow for the immediately preceding two
full fiscal quarters annualized of such acquired entity, or (B) the Borrower
must obtain the prior written consent of the Majority Lenders, and (ii)
notwithstanding any of the foregoing limitations and requirements, if there
exists no Default or Event of Default both before and after giving effect
thereto and the Borrower complies with Section 8.04(j) hereof, the Borrower may
acquire Unrestricted Subsidiaries.
"Permitted Asset Sales" means (a) assets sales in the ordinary course of
business, (b) assets sales of equipment that is worn out, obsolete, damaged or
otherwise unsuitable for use in the business, (c) so long as there exists no
Default or Event of Default both before and after giving effect to any such
asset sale, (i) sales of dark fiber or IRU's in dark fiber or capacity and (ii)
sales with respect to
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any asset used exclusively in connection with the Borrower's microwave relay
system or 100% of the Capital Stock of any Subsidiary of the Parent or the
Borrower exclusively engaged in the microwave business.
"Permitted Holders" means the officers and directors of the Parent, and
Trustees of General Electric Pension Trust, Grumman Hill Associates, Inc. and
Grumman Hill Investments, L.P., and each of their respective officers and
directors and their Related Parties.
"Permitted Investments" means, so long as there exists no Default or
Event of Default both before and after giving effect to any such Investment
(a) Investments made by the Parent, the Borrower or any
Restricted Subsidiary in Unrestricted Subsidiaries not to exceed an
amount over the term of this Agreement equal to the sum of (i)
$50,000,000 plus (ii) net equity proceeds raised subsequent to the
Closing Date that were not used to make Permitted Acquisitions or to
redeem the Junior Exchangeable in accordance with the terms of this
Agreement and
(b) so long as the Parent, the Borrower and the Restricted
Subsidiaries are in compliance with Section 2.05 hereof and Section 2.11
hereof, other Investments not to exceed in initial purchase price
$50,000,000 in the aggregate outstanding at any one time.
Notwithstanding the foregoing, (I) to the extent and at the time that any series
of investments permitted under the preceding sections (a) and/or (b) constitutes
a Permitted Acquisition (such acquired entity becoming a Restricted Subsidiary
and executing an Unlimited Guaranty), the applicable investment basket (a) or
(b) above shall be replenished by the amount of such initial investment, (II) so
long as there exists no Default or Event of Default both before and after giving
effect thereto, in addition to the foregoing permitted minority Investments, the
Borrower may (A) sell microwave and/or DSC equipment for a purchase price
constituting or including minority Investments, and (B) use the proceeds from
the issuance of Capital Stock of the Parent to invest in Unrestricted
Subsidiaries, but only in accordance with the terms of Section 8.04(j)(i) and
(ii) hereof.
"Permitted Liens" means, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations
hereunder;
(b) (i) Liens on real estate for real estate Taxes not yet delinquent,
(ii) Liens created by lease agreements, statute or common law to secure the
payments of rental amounts and other sums not yet due thereunder, (iii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of the
leased premises, and (iv) Liens for Taxes, assessments, governmental charges,
levies or claims that are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure, restraint,
sale or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and materialmen
and other similar Liens incurred in the ordinary course of business for sums not
yet due or being contested in good faith, if such reserve or appropriate
provision, if any, as shall be required by GAAP shall have been made therefor;
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<PAGE> 24
(d) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, matters of public record, restrictions and
other similar encumbrances on the use of real property which do not materially
interfere with the ordinary conduct of the business of such Person as currently
conducted;
(f) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully insured and
the insurer shall not have denied coverage, or (iii) such judgments or awards
shall have been bonded to the satisfaction of the Majority Lenders; and
(g) Any Liens existing on the Closing Date which are described on
Schedule 8.03 hereto and not otherwise described elsewhere in the definition of
Permitted Liens, and Liens resulting from the refinancing of the related Debt
for Borrowed Money, provided that the Debt for Borrowed Money secured thereby
shall not be increased and the Liens shall not cover additional assets of the
Parent, the Borrower or any such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means Debt of the applicable Obligor
to the extent all of the proceeds thereof are used to refinance Debt of such
Obligor (plus any premium thereon reasonably acceptable to the Administrative
Agent), provided that after giving effect to the incurrence of such Debt, the
Borrower is in pro forma compliance with the terms of this Agreement, and
provided further that (i) the terms of such new Debt are no more restrictive
than the Loans, (ii) the maturity of such new Debt is no shorter than the Debt
being refinanced, (iii) the only Person obligated on such refinanced Debt is the
original Person obligated on such Debt, (iv) the priority of any such new Debt
shall remain unchanged (if such Debt to be refinanced is subordinated, the
subordination provisions remain unchanged in the new refinanced Debt), and (v)
the parties obligated on such Debt remain the same.
"Person" means an individual, partnership, joint venture, corporation,
limited liability company, trust, Tribunal, unincorporated organization, and
government, or any department, agency, or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" means the Pledge Agreement of even date herewith,
executed by the Parent, the Borrower and any Subsidiary of the Borrower,
granting a Lien on Capital Stock of the Borrower and each of the Subsidiaries of
the Parent and the Borrower (except Excluded Stock) as security for the
Obligations, substantially in the form of Exhibit H hereto, as such agreement
may be amended, modified, renewed or extended from time to time, and "Pledge
Agreement" shall also include each such pledge agreement pledging the Capital
Stock of all other Subsidiaries of the Parent and the
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Borrower created or acquired from time to time (except Subsidiaries of
Unrestricted Subsidiaries), and all amendments, modifications, renewals and
extensions to any thereof.
"Pledged Stock" means all of the Capital Stock of the Borrower and of
each of the Subsidiaries of the Borrower (except Excluded Stock).
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Present Holder" means those owners of common Capital Stock of the
Parent set forth on Schedule 1.03 hereto and their Related Persons.
"Prohibited Transaction" has the meaning specified in Section 4975 of
the Code or Section 406 of Title I of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned or hereafter acquired in fee simple or leased by
the Parent, the Borrower and the Restricted Subsidiaries.
"PSINet Shares" means the Capital Stock of PSINet Inc. owned by IXC
Internet Services, Inc. on the Closing Date and described on Schedule 1.01
hereto.
"PUC" means any state regulatory agency or body that exercises
jurisdiction over the rates or services or the ownership, construction or
operation of any network facility or long distance telecommunications systems or
over Persons who own, construct or operate a network facility or long distance
telecommunications systems, in each case by reason of the nature or type of the
business subject to regulation and not pursuant to laws and regulations of
general applicability to Persons conducting business in such state.
"Quarterly Date" means the last Business Day of each March, June,
September and December during the term of this Agreement.
"Refinancing Advance" means any Advance which is used to pay the
principal amount (or any portion thereof) of an Advance at the end of its
Interest Period and which, after giving effect to such application, does not
result in an increase in the aggregate amount of outstanding Advances.
"Related Party" with respect to any Permitted Holder means (i) any
controlling stockholder, of an 80% (or more) owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Permitted Holder
or (ii) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Permitted Holder or such other
Persons referred to in the immediately preceding clause (i).
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"Related Person" means with respect to Schedule 1.03 hereto, any
individual, (i) such individual's spouse (past or current), descendants (natural
or adoptive, of the whole or half blood) of the parents of such individual, such
individual's grandparents and parents (natural or adoptive), and the
grandparents, parents and descendants of parents (natural or adoptive, of the
whole of half blood) of such individual's spouse (past or current); or (ii) a
trust, corporation, partnership or other entity, whose beneficiaries, trustees,
donors, shareholders, partners or owners, or other persons or entities holding a
controlling interest in such entity, consist of such individual and/or such
other persons or entities referred to in the immediately preceding clause (i).
"Release Date" means the date on which the Notes have been paid, all
other Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"Restricted Payments" means, for the Borrower, the Parent and the
Restricted Subsidiaries of the Borrower, (a) any direct or indirect
Distribution, dividend or other payment on account of any equity interest in, or
shares of, Capital Stock or other securities of the Parent, the Borrower and its
Restricted Subsidiaries (or the establishment of any sinking fund or otherwise
the setting aside of any funds with respect thereto), except such dividends that
are paid with common equity securities of the Parent; (b) any management,
consulting or other similar fees, or any interest thereon, payable by the
Borrower, the Parent or any of the Restricted Subsidiaries to Unrestricted
Subsidiary and/or any other Affiliate of the Parent and/or the Borrower (or the
establishment of any sinking fund or otherwise the setting aside of any funds
with respect thereto), but specifically excluding any consulting fees payable by
the Parent, the Borrower or any Restricted Subsidiary to a Person that is not an
Affiliate of the Parent and/or the Borrower, (c) loans or advances to employees
and/or shareholders of the Borrower, the Parent and the Subsidiaries of the
Borrower and the Parent, except advances to employees of the Borrower and its
Restricted Subsidiaries for moving and travel expenses in the ordinary course of
business; (d) payments of principal and/or interest, or the setting aside of
funds with respect thereto, of any Total Debt except the Obligations; (e)
dividends, distributions, redemptions, repurchases or defeasance of any
preferred stock issuance (or the setting aside of any funds to do so); (f)
payments of any amounts, fees, advances, loans, investments or otherwise to any
Unrestricted Subsidiary; and (g) any payment out of the Borrower Deposit Account
or the Parent Deposit Account.
"Restricted Subsidiary" means all those Subsidiaries of the Parent
and/or the Borrower that are not Unrestricted Subsidiaries, provided that,
notwithstanding the foregoing (a) all Subsidiaries designated by the Borrower as
Restricted Subsidiaries on the Closing Date shall remain Restricted Subsidiaries
until the Obligations have been repaid in full and the Commitments terminated,
(b) all Designated Restricted Subsidiaries shall be at all times Restricted
Subsidiaries hereunder, and (c) no Person may be included as a Restricted
Subsidiary hereunder that has not executed an Unlimited Guaranty that is at the
time of determination in full force and effect, except Mutual Signal and the
Subsidiaries of Mutual Signal. All Restricted Subsidiaries as of the Closing
Date are listed on Schedule 1.04 hereto.
"Revolver Commitment" means, with respect to the Revolver Loan,
$150,000,000 as reduced from time to time pursuant to Section 2.11 hereof.
"Revolver Advance" means any advance made under the Revolver Loan.
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"Revolver Commitment Fee" means the fee described in Section 2.10(a)
hereof.
"Revolver Loan" means the loan made by a Lender pursuant to Section
2.01(a) of this Agreement.
"Revolver Note" means each Note of the Borrower evidencing Revolver
Advances under the Revolver Loan hereunder, substantially in the form of Exhibit
A hereto, together in each case, with any extension, renewal or amendment
thereof, or substitution therefor.
"Revolver Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof designated as its
Revolver Specified Percentage, or as adjusted or specified (i) in any Assignment
and Acceptance or (ii) in any amendment to this Agreement.
"Rights" means rights, remedies, powers, and privileges.
"Senior Debt" means, on any date of determination, Total Debt on such
date minus the sum of (a) the aggregate outstanding principal amount of the
Subordinated Notes, plus (b) to the extent included in Total Debt, accrued and
unpaid interest on the Subordinated Notes.
"Senior Leverage Ratio" means, on any date of determination, the ratio
of (a) Senior Debt on such date to (b) Annualized Operating Cash Flow, provided
that (i) the calculation of Senior Debt for purposes of the Senior Leverage
Ratio will be net of the sum of any cash balances in excess of $10,000,000 and
(ii) for purposes of this calculation, Operating Cash Flow shall be calculated
as if all assets (including Capital Stock of Restricted Subsidiaries of the
Borrower and the Parent) acquired on any date during the period of determination
were acquired on the first day in such period of determination, and all assets
sold (including Capital Stock of Restricted Subsidiaries of the Borrower and the
Parent) on any date during the period of determination were sold on the first
day in such period of determination.
"Senior Notes" means those certain 12 and 1/2% Senior Notes Due 2005
issued by the Parent.
"Senior Notes Documentation" means that certain Indenture with respect
to the Senior Notes, and all other agreements and other documentation relating
to the Senior Notes, including, without limitation, that certain First
Supplemental Indenture, dated as of October 23, 1997, that certain Second
Supplemental Indenture, dated as of December 22, 1997, that certain Third
Supplemental Indenture, dated as of January 6, 1998 and that certain Fourth
Supplemental Indenture, dated as of April 3, 1998.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, other than a Multiple Employer Plan of the Parent
or the Borrower.
"Solvent" means, with respect to any Person, that on such date (a) the
fair value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts
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and liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute an unreasonably small capital.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll,
P.C., Dallas, Texas, or such other individual or firm acting as special counsel
to Administrative Agent, as designated by Administrative Agent from time to
time.
"Special Purpose Advance" means any advance made under the Special
Purpose Loan.
"Special Purpose Commitment" means on any date of determination, the
aggregate commitment for the Special Purpose Loan, if the Special Purpose Loan
is a revolving loan, as determined in accordance with the terms of Section 2.17
hereof.
"Special Purpose Loan" means the loan, if any, made by a Lender pursuant
to Section 2.01(c) of this Agreement.
"Special Purpose Note" means each Note of the Borrower evidencing
Special Purpose Advances hereunder, if any, substantially in the form agreed to
in accordance with the terms and conditions of Section 2.17 hereof, and
evidencing Special Purpose Advances made under the Special Purpose Loan,
together in each case, with any extension, renewal or amendment thereof, or
substitution therefor.
"Special Purpose Specified Percentage" means, as to any Lender, the
percentage indicated or specified in (i) any amendment to this Agreement or in
any amendment and restatement of this Agreement, either in accordance with the
terms and conditions of Section 2.17 hereof or otherwise and (ii) in any
Assignment and Acceptance.
"Subordinated Indebtedness" means Debt of the Parent that is unsecured
and subordinated to the Obligations, such Debt in each case (a) to be pursuant
to documentation containing terms and conditions no more onerous than this
Agreement and the Loan Papers, (b) to have a maturity not less than one year
after the Maturity Date, and (c) to be subordinated on terms and conditions no
less favorable to the Administrative Agent and the Lenders than the
subordination terms contained in the Subordinated Notes Documentation.
"Subordinated Notes" means those certain $450,000,000 9% Senior
Subordinated Notes Due 2008 issued by the Parent.
"Subordinated Notes Documentation" means that certain Indenture with
respect to the Subordinated Notes, and all other agreements and other
documentation relating to the Subordinated Notes.
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"Subsidiary" of any Person means any corporation, limited liability
company, partnership, joint venture, trust or estate of which (or in which) 50%
or more of:
(a) the outstanding Capital Stock having voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether at the time Capital Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency),
(b) the interest in the capital or profits of such partnership or
joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Taxes" means all taxes, assessments, imposts, fees, or other charges at
any time imposed by any Laws or Tribunal.
"Term Loan Advance" means the initial advance and any of the Refinancing
Advances made under the Term Loan.
"Term Loan" means the term loan made by the Lenders pursuant to Section
2.01(b) of this Agreement.
"Term Loan Note" means each Note of the Borrower evidencing Term Loan
Advances hereunder, substantially in the form of Exhibit B hereto with respect
to Term Loan Advances made under the Term Loan, together with any extension,
renewal or amendment thereof, or substitution therefor.
"Term Loan Specified Percentage" means, as to any Lender, (a) prior to
the initial Term Loan Advance, the percentage indicated beside its name on the
signature pages hereof designated as its Term Loan Specified Percentage, or as
adjusted or specified (i) in any Assignment and Acceptance or (ii) in any
amendment to this Agreement, and (b) after the initial Term Loan Advance, the
percentage of the outstanding portion of the Term Loan held by such Lender on
any date of determination (after giving effect to assignments in accordance with
the terms of Section 11.04 hereof).
"Total Debt" means all Debt for Borrowed Money which would be shown on a
consolidated balance sheet in accordance with GAAP, including, without
limitation for the Parent, the Borrower and the Restricted Subsidiaries, (a)
Capital Lease obligations, (b) Debt of any other Person secured by a Lien on the
property of the Parent, the Borrower or any Restricted Subsidiary of the
Borrower in an amount equal to the lesser of (i) such Debt of such Person and
(ii) the value of such pledged property, (c) Contingent Liabilities, (d)
Withdrawal Liability and (e) overdue interest on any Debt for Borrowed Money
(but not accrued interest that is not overdue).
"Total Leverage Ratio" means, on any date of determination, the ratio of
(a) Total Debt on such date to (b) Annualized Operating Cash Flow, provided that
(i) the calculation of Total Debt for purposes of the Total Leverage Ratio will
be net of the sum of any cash balances in excess of $10,000,000 and (ii) for
purposes of this calculation, Operating Cash Flow shall be calculated as if all
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assets (including Capital Stock of Restricted Subsidiaries of the Borrower and
the Parent) acquired on any date during the period of determination were
acquired on the first day in such period of determination, and all assets
(including Capital Stock of Restricted Subsidiaries of the Borrower and the
Parent) sold on any date during the period of determination were sold on the
first day in such period of determination.
"Total Specified Percentage" means, as to any Lender on any date of
determination, the percentage that such Lender's outstanding Advances (all
Revolver Advances, Special Purpose Advances (if any) and Term Loan Advances)
bears to the aggregate outstanding amount of Advances (all Revolver Advances,
Special Purpose Advances (if any), and Term Loan Advances) made by all Lenders
hereunder, provided that, if there are no outstanding Advances hereunder, "Total
Specified Percentage" shall mean for such Lender the percentage that the sum of
its (a) Revolver Specified Percentage of the Revolver Commitment plus (b) if the
Special Purpose Loan is a revolving loan as determined in accordance with
Section 2.17 hereof, Special Purpose Specified Percentage of the Special Purpose
Commitment, bears to the aggregate Commitments of all Lenders on such date.
"Tribunal" means any state, commonwealth, federal, foreign, territorial,
or other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of Texas
on the Closing Date.
"Unlimited Guaranty" means the Guaranty, executed in substantially
similar form by the Parent and each Restricted Subsidiary of the Parent and the
Borrower, guarantying payment and performance of the Obligations, substantially
in the form of Exhibit G attached hereto, as such agreement may be amended,
modified, renewed or extended from time to time, and each subsequent unlimited
Guaranty in the form of Exhibit G hereto executed by any newly acquired or
created Restricted Subsidiary of the Borrower and the Parent, as each such
agreement may be amended, modified, renewed or extended from time to time.
"Unrestricted Subsidiary" means those Subsidiaries of the Parent and the
Borrower that are not less than 50% owned and are designated in writing to the
Administrative Agent and each Lender by the Borrower as Unrestricted
Subsidiaries, including, without limitation, Eclipse (formerly Network Long
Distance, Inc.), IXC Internet and IXC International, Inc., provided that (a) no
Restricted Subsidiary existing on the Closing Date may be designated as an
Unrestricted Subsidiary and no Designated Restricted Subsidiary may be an
Unrestricted Subsidiary and (b) no Restricted Subsidiary may be owned by an
Unrestricted Subsidiary. Unrestricted Subsidiaries as of the Closing Date are
listed on Schedule 1.02 hereto. The Borrower may designate any Unrestricted
Subsidiary as a Restricted Subsidiary from time to time at its election, so long
as prior to the effectiveness of such designation, such new Restricted
Subsidiary has executed an Unlimited Guaranty of the Obligations, and executed
security agreements, pledge agreements, mortgages, deeds of trust and other
collateral documents (including corporate opinions, local counsel opinions,
surveys, and otherwise) satisfactory
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<PAGE> 31
to the Administrative Agent to effectively grant a Lien and security interest to
the Administrative Agent on behalf of the Lenders on all of such new Restricted
Subsidiary's assets and Properties to secure the Obligations, each such document
and agreement to be in form, and on terms and conditions acceptable to the
Administrative Agent. Each newly formed or acquired Unrestricted Subsidiary
shall be effective as of the date of formation or acquisition, respectively.
Each (i) Restricted Subsidiary hereafter designated by the Borrower as an
Unrestricted Subsidiary from time to time after the Closing Date in accordance
with the terms hereof and (ii) Unrestricted Subsidiary hereafter designated by
the Borrower as a Restricted Subsidiary from time to time after the Closing Date
in accordance with the terms hereof, will be effective as an Unrestricted
Subsidiary or Restricted Subsidiary, respectively, commencing the beginning of
the next succeeding calendar quarter after notice is delivered to the Lenders in
accordance with the terms of Section 11.02 hereof, provided that, if the next
succeeding calendar quarter commences sooner than 10 days following such notice,
the effectiveness of the designation as an Unrestricted Subsidiary or Restricted
Subsidiary, respectively, will commence on the beginning of the second
succeeding calendar quarter following such notice.
"Unused Facility Amount" means the Commitment minus the sum of (a) all
outstanding Revolver Advances, plus (b) all outstanding Special Purpose
Advances, if any, but only if the Special Purpose Loan is a revolving loan as
determined in accordance with the terms of Section 2.17 hereof, plus (c) all
issued and outstanding Letters of Credit, plus (d) all reimbursement obligations
with respect to any draws under any Letters of Credit.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
"Year 2000 Compliant" means, with respect to a Person, that all computer
hardware and software that are material to the business and operations of such
Person will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000, including functions
with respect to any leap year.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Parent, the Borrower and
its Restricted Subsidiaries, unless otherwise expressly stated herein.
References herein to one gender shall be deemed to include all other genders.
Except where the context otherwise requires, (a) definitions imparting the
singular shall include the plural and vice versa and (b) all references to time
are deemed to refer to Dallas time. In any calculation made hereunder,
including, without limitation, calculations made under Section 8.01 hereof,
Section 8.18 hereof and the definition of Applicable Margin hereof, to the
extent that any such calculations are made in reliance upon financial
information supplied to the Administrative Agent and the Lenders in accordance
with the terms hereof and such information is later corrected or changed in any
manner (pursuant to an audited statement or otherwise), all such calculations
made in accordance with the terms hereof shall be changed and effective
retroactively as if the correct information had been delivered originally.
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ARTICLE II. THE LOAN FACILITY
2.01. Loans.
(a) Revolver Loans. Each Lender severally agrees, on the terms
and subject to the conditions hereinafter set forth, to make Revolver
Advances to the Borrower on a Business Day during the period from the
Closing Date to the Maturity Date, in an aggregate principal amount
outstanding not to exceed at any time such Lender's Revolver Specified
Percentage of the difference between the Revolver Commitment and the sum
of the undrawn face amount of all outstanding Letters of Credit, plus
reimbursement obligations under Article III hereof. Subject to the terms
and conditions of this Agreement, the Borrower may borrow, repay and
reborrow the Revolver Advances; provided, however, that at no time shall
the sum of (i) all outstanding Revolver Advances, plus (ii) the undrawn
face amount of all outstanding Letters of Credit, plus (iii)
reimbursement obligations under Article III hereof exceed the Revolver
Commitment.
(b) Term Loan. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make a Term Loan
available to the Borrower on the Closing Date, in an aggregate principal
amount equal to such Lender's Term Loan Specified Percentage of
$200,000,000. If not borrowed on the Closing Date, the Term Loan shall
be unavailable. Once repaid, no Term Loan Advance may be reborrowed.
(c) Uncommitted Special Purpose Loans. Each Lender agrees, on the
terms and subject to the conditions hereinafter set forth, that until
December 31, 2000, this Agreement may be amended from time to time in
accordance with the terms of Section 2.17 hereof to permit the Lenders,
if any, or such new creditors in accordance with the terms of Section
2.17 hereof, to make Special Purpose Advances under the Special Purpose
Loan, whether such loan is a term loan or revolving loan, to the
Borrower in an aggregate principal amount outstanding not to exceed at
any time $250,000,000, all in accordance with, and subject to the terms
of, Section 2.17 hereof.
(d) Maximum Aggregate Borrowings. Notwithstanding the foregoing
provisions and all other provisions of this Agreement and the Loan
Papers, until the Administrative Agent and the Lenders are in receipt of
an executed Compliance Certificate evidencing compliance with all terms
and conditions of this Agreement using the Borrower prepared financial
statements for the 1998 year end and fiscal quarter ending December 31,
1998, the sum of (i) the maximum aggregate Advances outstanding under
the Loans (the Revolver Loan, the Special Purpose Loan, if any, and the
Term Loan) and (ii) the face amount of all outstanding Letters of
Credit, shall not exceed $275,000,000 at any one time.
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written
notice of the Borrower, received by Administrative Agent not later than
(i) 10:00 a.m. three Business Days prior to the date of the proposed
Borrowing, in the case of Advances which are LIBOR Advances and (ii)
3:00 p.m. one Business Day prior to the date of the proposed Borrowing,
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in the case of Advances which are Base Advances. Each such notice of a
Borrowing (a "Borrowing Notice") shall be by telecopy or telephone,
promptly confirmed by letter, in substantially the form of Exhibit D
hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be a
Business Day, and whether such Borrowing will be under the Revolver Loan
or the Special Purpose Loan;
(ii) the Type of Advances of which the Borrowing is to be
comprised;
(iii) the amount of such proposed Borrowing which, (A) with
respect to Advances drawn under (I) the Revolver Loan, shall not exceed
the unused portion of the Revolver Commitment less outstanding Letters
of Credit and reimbursement obligations and (II) the Special Purpose
Loan, shall not exceed the unused portion of the Special Purpose
Commitment, if any, and (B) shall (I) in the case of a Borrowing of Base
Advances, be in an amount of not less than $2,000,000 or an integral
multiple of $1,000,000 in excess thereof (or any lesser amount if such
amount is the remaining undrawn portion under the Revolver Commitment or
Special Purpose Commitment, respectively), and (II) in the case of a
Borrowing of LIBOR Advances, be in an amount of not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof; and
(iv) if the Borrowing is to be comprised of LIBOR Advances,
the duration of the initial Interest Period applicable to such Advances.
If the Borrowing Notice fails to specify (a) whether such Borrowing is
under the Revolver Loan or the Special Purpose Loan, then such Borrowing shall
be deemed to be made under the Revolver Loan, (b) the duration of the initial
Interest Period for any Borrowing or Refinancing Advance, as applicable,
comprised of LIBOR Advances, such Interest Period shall be three months.
Administrative Agent shall promptly notify Lenders of each such notice. Each
Lender shall, before 1:00 p.m. on the date of each Advance under the Revolver
Loan and the Special Purpose Loan hereunder (other than a Refinancing Advance),
or on the Closing Date with respect to the initial Term Loan Advance, make
available to Administrative Agent, at its office at NationsBank Plaza, 901 Main
Street, Dallas, Texas 75202, such Lender's Revolver Specified Percentage or
Special Purpose Specified Percentage, as applicable, of the aggregate Advances
under the Revolver Loan or Special Purpose Loan, as applicable, to be made on
that day in immediately available funds, or such Lender's Term Loan Specified
Percentage of the initial Term Loan Advance to be made on the Closing Date in
immediately available funds.
(b) Unless any applicable condition specified in Article IV has not been
satisfied, Administrative Agent will make the funds promptly available to the
Borrower (other than with respect to a Refinancing Advance) by either (i) wiring
such amounts pursuant to any wiring instructions, or (ii) depositing such amount
in the account of the Borrower at the Administrative Agent, in each case as
specified by the Borrower to the Administrative Agent in writing.
(c) After giving effect to any Borrowing, (i) there shall not be more
than seven different Interest Periods in effect and (ii) the aggregate principal
amount of outstanding Advances under (A) the Revolver Loan, plus the sum of the
outstanding face amount of the Letters of Credit, and reimbursement obligations
under Article III shall not exceed the Revolver Commitment and (B) the Special
Purpose Loan shall not exceed the Special Purpose Commitment.
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(d) No Interest Period applicable to any Advance shall extend beyond the
Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior to
the date of any Advance that it will not make available its Applicable Specified
Percentage of any Advance, Administrative Agent may assume that such Lender has
made the appropriate amount available in accordance with Section 2.02(a) hereof,
and Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If and to the extent any Lender shall
not have made such amount available to Administrative Agent, such Lender and the
Borrower severally agree to repay to Administrative Agent immediately on demand
such corresponding amount together with interest thereon, from the date such
amount is made available to the Borrower until the date such amount is repaid to
Administrative Agent, at (i) in the case of the Borrower, the Base Rate, and
(ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Applicable Specified
Percentage of any Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Applicable Specified Percentage of any
Advance. In no event, however, shall any Lender be responsible for the failure
of any other Lender to make available any portion of any Advance.
(g) The Borrower and the Parent shall indemnify each Lender against any
Consequential Loss incurred by each Lender as a result of (i) any failure to
fulfill, on or before the date specified for an Advance, the conditions to the
Advance set forth herein (including a Refinancing Advance) or (ii) the
Borrower's requesting that an Advance (including a Refinancing Advance) not be
made on the date specified in the Borrowing Notice.
2.03. Evidence of Debt for Borrowed Money.
(a) The Advances made by each Lender under the Revolver Loan shall be
evidenced by a Revolver Note in the amount of such Lender's Revolver Specified
Percentage of the Revolver Commitment in effect on the Closing Date.
(b) The Advances made by each Lender under the Special Purpose Loan
shall be evidenced by a Special Purpose Note as determined in accordance with
the terms of Section 2.17 hereof.
(c) The Advances made by each Lender under the Term Loan shall be
evidenced by a Term Loan Note in the amount of such Lender's Term Loan Specified
Percentage of $200,000,000.
(d) Administrative Agent's and each Lender's records shall be
presumptive evidence as to amounts owed Administrative Agent and such Lender
under the Notes and this Agreement.
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2.04. Optional Prepayments.
(a) The Borrower may, upon at least two Business Days prior written
notice to Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of any
Advances in whole or in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid without premium or penalty other than
any Consequential Loss; provided, however, that in the case of a prepayment of a
Base Advance, the notice of prepayment may be given by telephone by 3:00 p.m.
upon at least one Business Day prior written notice. Each partial prepayment
shall, in the case of Base Advances under the Loans, be in an aggregate
principal amount of not less than $100,000 or a larger integral multiple of
$50,000 in excess thereof and, in the case of LIBOR Advances under the Loans, be
in an aggregate principal amount of not less than $500,000 or a larger integral
multiple of $100,000 in excess thereof. If any notice of prepayment is given,
the principal amount stated therein, together with accrued interest on the
amount prepaid and the amount, if any, due under Section 2.12 and Section 2.14
hereof, shall be due and payable on the date specified in such notice unless the
Borrower revokes its notice, provided that, if the Borrower revokes its notice
of prepayment prior to such date specified, the Borrower shall reimburse the
Administrative Agent for the account of all Lenders for all Consequential Losses
suffered by each Lender as a result of the Borrower's failure to prepay. A
certificate of each Lender claiming compensation under this Section 2.04(a),
setting forth in reasonable detail the calculation of the additional amount or
amounts to be paid to it hereunder shall be presumptive evidence of the validity
of such claim.
(b) The application of prepayments made under this Section 2.04 as
between the Revolver Loan, the Special Purpose Loan and the Term Loan shall be
determined in accordance with the provisions of Section 2.13(f) hereof. All
prepayments made pursuant to this Section 2.04 shall be first applied to Base
Advances then to LIBOR Advances, all without premium or penalty, except the
Borrower must pay together with any such prepayments, any Consequential Losses.
2.05. Mandatory Prepayments.
(a) Asset Sales, PSINet Shares and Investments. To the extent that (i)
the Parent, the Borrower or any of the Restricted Subsidiaries consummates any
sale, transfer, conveyance or other divestiture of any asset or any of its
Properties other than Permitted Asset Sales (this provision in and of itself not
constituting permission to effectuate any such transactions), and/or (ii) the
Parent, the Borrower or any Restricted Subsidiary receives proceeds from the
sale of all or any portion of the PSINet Shares, and/or (iii) the Parent, the
Borrower or any of the Restricted Subsidiaries consummates any sale of all or
any portion of any Investment made under subsection (b) of the definition of
"Permitted Investments", then the Borrower shall immediately use 100% of the Net
Proceeds of any such transaction to repay the Obligations under the Loans.
(b) Public or Private Issuance of Equity. To the extent that the Parent,
the Borrower or any of the Restricted Subsidiaries consummates any public or
private issuance of equity (this provision in and of itself not constituting
permission to do so), then the Borrower shall immediately use the net proceeds
to repay the Obligations under the Loans.
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(c) Mandatory Prepayments, Generally. The application of prepayments
made under this Section 2.05 as between the Revolver Loan, the Special Purpose
Loan and the Term Loan shall be determined in accordance with the provisions of
Section 2.13(f) hereof. All prepayments made pursuant to this Section 2.05 shall
be first applied to Base Advances then to LIBOR Advances, all without premium or
penalty, except the Borrower must pay together with any such prepayments, any
Consequential Losses.
2.06. Repayment.
(a) LIBOR Advances. The principal amount of each LIBOR Advance is due
and payable on the last day of the applicable Interest Period, which principal
payment may be made by means of a Refinancing Advance in accordance with the
terms of Section 2.09 hereof (and subject to the other provisions of this
Agreement).
(b) Commitment Reduction. On the date of a reduction of the Commitment
pursuant to Section 2.11 hereof, the aggregate amount of outstanding (i)
Revolver Advances in excess of the Revolver Commitment as reduced, and (ii) if
the Special Purpose Loan is a revolving loan as determined in accordance with
Section 2.17 hereof, the Special Purpose Advances in excess of the Special
Purpose Commitment as reduced, shall be immediately due and payable (which such
principal repayments may not be made by means of Refinancing Advances).
(c) Term Loan Repayment. The Term Loan shall be due and payable in full
on the Maturity Date, and all Term Loan Advances and other Obligations shall be
due and payable in full on the Maturity Date.
(d) Maturity Date. All outstanding Advances under the Loans and all
other Obligations shall be due and payable in full on the Maturity Date.
(e) Repayments, Generally. All outstanding Advances and other
Obligations shall be due and payable in full on the Maturity Date. Any
repayments made pursuant to this Section shall be without premium or penalty,
except the Borrower must pay together with any such prepayments, any
Consequential Losses. Repayment of Advances shall be applied to Base Advances
first, and then to LIBOR Advances.
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof, the
Borrower shall pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal shall be paid in full, at either
the Base Rate or the LIBOR Rate, as set forth in subsection (i) or (ii) below,
as selected by the Borrower in accordance with Section 2.02 hereof and as
follows:
(i) Base Advances. Base Advances shall bear interest at a rate
per annum equal to the Base Rate as in effect from time to time. If the
amount of interest payable in respect of any interest computation period
is reduced to the Highest Lawful Rate and the amount of interest payable
in respect of any subsequent interest computation period would be less
than the Maximum Amount, then the amount of interest payable in respect
of such subsequent interest computation period shall be automatically
increased to the Maximum Amount; provided that at no time shall the
aggregate amount by which interest paid has been increased pursuant to
this sentence exceed the aggregate amount by which interest has been
reduced pursuant to this sentence.
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(ii) LIBOR Advances. LIBOR Advances shall bear interest at the
rate per annum equal to the LIBOR Rate applicable to such Advance.
(iii) Payment Dates. Accrued and unpaid interest on Base Advances
shall be paid quarterly in arrears on each Quarterly Date and on the
Maturity Date. Accrued and unpaid interest in respect of each LIBOR
Advance shall be paid on the last day of the appropriate Interest
Period, on the Maturity Date and on the date of any prepayment or
repayment of such Advance; provided, however, that if any Interest
Period for a LIBOR Advance exceeds three months, interest shall also be
paid on the date which falls three, six, and nine months after the
beginning of such Interest Period.
2.08. Default Interest. During the continuation of (a) any Default under
Section 9.01(a) hereof (the three day grace period for interest, fees and other
amounts payable) and (b) any Event of Default, the Borrower shall pay, on
demand, interest (after as well as before judgment to the extent permitted by
Law) on the principal amount of all Advances outstanding and on all other
Obligations due and unpaid hereunder at a per annum rate equal to the lesser of
the (a) the Highest Lawful Rate and (b) the Base Rate plus 2%. LIBOR Advances
shall not be available for selection by the Borrower during the continuance of
an Event of Default.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative
Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any
portion of outstanding Advances which are Base Advances (in an aggregate
amount not less than $500,000 or an integral multiple of $100,000 in
excess thereof) into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period
therefor, all or any portion of outstanding Advances which are LIBOR
Advances comprised in the same Borrowing (in an aggregate amount not
less than $100,000 or an integral multiple of $50,000 in excess thereof)
into Base Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any Advances which are LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$500,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Advances at the end of each respective Interest Period.
(b) The Borrower shall deliver a notice of conversion or continuation (a
"Conversion or Continuation Notice"), in substantially the form of Exhibit E
hereto, to Administrative Agent not later
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than (i) 10:00 a.m. three Business Days prior to the proposed date of conversion
or continuation, if the Advances (or any portion of either thereof) are to be
converted into or continued as LIBOR Advances; and (ii) 3:00 p.m. one Business
Day prior to the proposed date of conversion or continuation, if the Advances
(or any portion thereof) are to be converted into Base Advances.
Each such Conversion or Continuation Notice shall be by telecopy or
telephone, promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or
continued, and whether the Advances are Revolver Advances, Special
Purpose Advances or Term Loan Advances;
(iii) the nature of the proposed conversion or continuation;
and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, the Borrower shall have failed to select a new Interest Period to be
applicable to such LIBOR Advances or if an Event of Default shall then have
occurred and be continuing, the Borrower shall be deemed to have elected to
convert such LIBOR Advances into Base Advances effective as of the expiration
date of such current Interest Period.
(d) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Advances, there
shall not be outstanding Advances with more than seven different Interest
Periods.
2.10. Fees.
(a) Revolver Commitment Fee. Subject to Section 11.08 hereof, the
Borrower shall pay to Administrative Agent for the account of Lenders pro rata
in accordance with each Lender's Revolver Specified Percentage, a commitment fee
(the "Revolver Commitment Fee") equal to 0.500% per annum on the average daily
amount of the difference between (i) the Revolver Commitment and (ii) the sum of
(A) all outstanding Revolver Advances and (B) the face amount of all outstanding
Letters of Credit, payable in arrears on each Quarterly Date commencing with the
first Quarterly Date after the Closing Date, and continuing until the Maturity
Date.
(b) Other Fees. Borrower shall pay to Administrative Agent and the
Lenders such other fees as set forth in any Fee Letter addressed to the
Administrative Agent or any Lender.
2.11. Reduction of Commitments.
(a) Mandatory Termination of the Revolver Commitment and the Special
Purpose Commitment. The Revolver Commitment and, if the Special Purpose Loan is
a revolving loan in
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accordance with the terms of Section 2.17 hereof, the Special Purpose
Commitment, shall both automatically be reduced to zero and terminate on the
Maturity Date.
(b) Mandatory Reduction of Commitment Due to Asset Sales. The Commitment
shall be reduced immediately and automatically in an amount equal to any amount
required by Section 2.05(a) hereof to prepay the Loans as a result of (i) any
sales, transfers, conveyances or other divestitures of assets and Properties of
the Borrower, the Parent or any of the Restricted Subsidiaries (this provision
in and of itself not constituting permission to effectuate any such
transactions) and (ii) the receipt by the Parent, the Borrower or any Restricted
Subsidiary of proceeds from the sale of all or any portion of the PSINet Shares,
provided that, so long as there exists no Default or Event of Default both
before and after giving effect to such asset sales or Property sales and both
before and after any permitted reinvestment and so long as the aggregate amount
of Permitted Investments outstanding at any one time does not exceed in initial
purchase price $50,000,000, the Commitment shall not be automatically and
immediately reduced if the Borrower in good faith intends to reinvest, and such
proceeds are ultimately reinvested within a 12 month period after any such asset
sale, in telecommunications assets, internet assets, Permitted Acquisitions or
Permitted Investments.
(c) Mandatory Reduction of Commitment Due to Issuances of Public or
Private Equity. If at the time of any issuance of public or private equity by
the Borrower, the Parent or any of the Restricted Subsidiaries (this provision
in and of itself not constituting permission to effectuate any such
transaction), the Total Leverage Ratio is in excess of (i) 5.00 to 1.00, from
the period from the Closing Date through December 31, 1999, and (ii) 4.00 to
1.00, from the period from January 1, 2000 and thereafter, the Commitment shall
be reduced immediately and automatically in an amount equal to 50% of any amount
required by Section 2.05(b) hereof to prepay outstanding Advances under the
Loans (regardless of whether there are actually any outstanding Advances) as a
result of any issuances of public or private equity (this provision in and of
itself not constituting permission to effectuate any issuances of public or
private equity), provided that, notwithstanding the foregoing, (A) if there
exists any Event of Default at such time 100% of the net proceeds shall be used
to reduce the Commitment, (B) if (I) there exists no Default or Event of Default
both before and after giving effect to any such issuance and (II) the proceeds
of any such issuance are invested within a 12 month period in (x) Permitted
Acquisitions and/or (y) Permitted Investments and/or (z) telecommunications or
internet assets, the Commitment shall not be automatically and immediately
reduced by any such amount, (C) if (I) there exists no Default or Event of
Default both before and after giving effect to any such issuance, (II) the
Parent has issued common stock and (III) the proceeds of any such issuance of
common stock are used within a 12 month period to repurchase not more than 35%
of the outstanding Junior Exchangeable in accordance with the terms of the
Junior Exchangeable Documentation, the Commitment shall not be automatically and
immediately reduced by any such amount, and (D) if there exists no Default or
Event of Default both before and after giving effect to any such issuance, the
Commitment shall not be automatically and immediately reduced by the net
proceeds of any Preferred Stock issued by the Parent in accordance with the
terms of Section 8.02(f)(i) hereof.
(d) Change of Control. If any Change of Control shall have occurred,
each of the Revolver Commitment and the Special Purpose Commitment (if the
Special Purpose Loan is a revolving loan as determined in accordance with
Section 2.17 hereof) shall immediately and automatically be reduced to zero,
provided that, except with respect to the Subordinated Notes as provided in
subsection (e) below, if the Loans are rated at least BBB or above, or any
equivalent
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thereto, by Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc. or
Moody's Investors Service, Inc. on the 30th day following the event that
otherwise would constitute a Change of Control (the "Change of Control
Determination Date"), neither the Revolver Commitment or the Special Purpose
Commitment shall be reduced to zero as a result of this Section, provided,
however, that to the extent there is a "rating watch" with respect to the Loans
or other rating agency review on such 30th day, then the Change of Control
Determination Date shall be the first Business Day thereafter on which the Loans
are not subject to a "rating watch" or other rating agency review rating by
either Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc. or
Moody's Investors Service, Inc.
(e) Redemption, Repurchase of the Subordinated Notes. Upon any binding
request or demand for redemption (whether mandatory or otherwise, or defeasance
with respect to either thereof) of the Subordinated Notes (whether pursuant to a
Change of Control or otherwise), the Revolver Commitment and the Special Purpose
Commitment (if the Special Purpose Loan is a revolving loan as determined in
accordance with Section 2.17 hereof) shall immediately and automatically be
reduced to zero.
(f) Voluntary Commitment Reductions. The Borrower may from time to time,
upon notice to Administrative Agent not later than 1:00 p.m., three Business
Days in advance, terminate in whole or reduce in part the Commitment, as
designated by the Borrower; provided, however, that the Borrower shall pay the
accrued interest and the applicable accrued Commitment Fee on the amount of such
reduction and all amounts due, and any partial reduction shall be in an
aggregate amount which is an integral multiple of $5,000,000.
(g) Commitment Reduction and Repayments, Generally. Application of both
voluntary and mandatory reductions of the Commitments as between the Revolver
Commitment and the Special Purpose Commitment (if the Special Purpose Loan is a
revolving loan, as determined in accordance with the terms of Section 2.17
hereof) shall be determined in accordance with the terms of Section 2.13(f)
hereof. To the extent outstanding Revolver Advances exceed the Revolver
Commitment after any reduction thereof, the Borrower shall repay, on the date of
such reduction, any such excess amount and all accrued interest thereon, the
applicable Revolver Commitment Fee on the amount of such reduction and all
amounts due. If the Special Purpose Loan is a revolving loan as determined in
accordance with the terms of Section 2.17 hereof, to the extent outstanding
Special Purpose Advances exceed the Special Purpose Commitment after any
reduction thereof, the Borrower shall repay, on the date of such reduction, any
such excess amount and all accrued interest thereon, the applicable Special
Purpose Commitment Fee on the amount of such reduction and all amounts due. Once
reduced or terminated, none of the Revolver Commitment or the Special Purpose
Commitment may be increased or reinstated (except the Special Purpose
Commitment, in accordance with the terms of Section 2.17 hereof). No reduction
of the Commitment, either voluntary or mandatory shall relieve or alter the
mandatory reduction and termination of the Revolver Commitment and the Special
Purpose Commitment (if the Special Purpose Loan is a revolving loan as
determined n accordance with the terms of Section 2.17 hereof) pursuant to
Section 2.11 hereof.
2.12. Funding Losses. The Borrower may prepay the outstanding principal
balance of any Advance, in full at any time or in part from time to time in
accordance with the terms of Section 2.04 hereof, provided, that as a condition
precedent to the Borrower's right to make, and any Lender's obligation to
accept, any such prepayment, each such prepayment shall be in the amount of 100%
of
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the principal amount to be prepaid, plus accrued unpaid interest thereon to the
date of prepayment, plus any other sums which have become due to Administrative
Agent and Lenders under the Loan Papers on or before the prepayment date but
have not been paid, plus (subject to Section 11.08 hereof) any Consequential
Loss.
The Borrower agrees that each Lender is not obligated to actually
reinvest the amount prepaid in any specific obligation as a condition to
receiving any Consequential Loss, or otherwise.
2.13. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other
Loan Papers not later than 1:00 p.m. on the day when due in same day funds (by
wire transfer or otherwise) to Administrative Agent, for the account of Lenders
unless otherwise specifically provided herein, at Administrative Agent's office
at NationsBank Plaza, 901 Main Street, Dallas, Texas 75202, referencing IXC
Communications Services, Inc. in payment of its Obligations. No later than the
end of each day when each payment hereunder is made, the Borrower shall notify
Loan Operations at (214) 508-9192 or such other Person as Administrative Agent
may from time to time specify.
(b) Unless Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due hereunder that the
Borrower will not make payment in full, Administrative Agent may assume that
such payment is so made on such date and may, in reliance upon such assumption,
make distributions to Lenders. If and to the extent the Borrower shall not have
made such payment in full, each Lender shall repay to Administrative Agent
forthwith on demand the applicable amount distributed, together with interest
thereon at the Federal Funds Rate, from the date of distribution until the date
of repayment. The Borrower hereby authorizes each Lender, if and to the extent
payment is not made when due hereunder, to charge the amount so due against any
account of the Borrower with such Lender.
(c) Subject to Section 11.08 hereof, interest on LIBOR Advances under
the Loan Papers shall be calculated on the basis of actual days elapsed but
computed as if each year consisted of 360 days. Subject to Section 11.08 hereof,
interest on Base Advances, the Commitment Fee and other amounts due under the
Loan Papers shall be calculated on the basis of actual days elapsed but computed
as if each year consisted of 365 or 366 days, as applicable. Such computations
shall be made including the first day but excluding the last day occurring in
the period for which such interest, payment or Commitment Fee is payable. Each
determination by Administrative Agent or a Lender of an interest rate, fee or
commission hereunder shall be presumptive evidence of the validity of such
claim. All payments under the Loan Papers shall be made in United States
dollars, and without setoff, counterclaim, or other defense.
(d) Whenever any payment to be made hereunder or under any other Loan
Papers shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in the computation of interest or fees, if applicable;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
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(e) Reference to any particular index or reference rate for determining
any applicable interest rate under this Agreement is for purposes of calculating
the interest due and is not intended as and shall not be construed as requiring
any Lender to actually obtain funds for any Advance at any particular index or
reference rate.
(f) Notwithstanding anything to the contrary herein or in any Loan
Paper, to the extent the Borrower makes any voluntary prepayment, or voluntary
reduction of the Commitment under Sections 2.04 or 2.11 hereof, or any mandatory
prepayment, or mandatory reduction of the Commitment under Sections 2.05 and
2.11 hereof, then such reduction of Commitment or such prepayment shall be
applied as follows:
(i) so long as there exists no Default or Event of Default, all
voluntary Commitment reductions and all voluntary repayments and
prepayments shall be applied as directed by the Borrower, and in the
absence of direction by the Borrower, shall be deemed to prepay and
reduce, respectively, (1) the Revolver Loan and the Revolver Commitment
until the Revolver Commitment has been reduced to zero and the
outstandings under the Revolver Loan have been repaid in full, then (2)
if the Special Purpose Loan is a revolving loan as determined in
accordance with Section 2.17 hereof, the Special Purpose Advances and
the Special Purpose Commitment until the Special Purpose Commitment has
been reduced to zero and the outstandings under the Special Purpose Loan
have been repaid in full, then (3) if the Special Purpose Loan is a term
loan as determined in accordance with Section 2.17 hereof, the Special
Purpose Loan until the Special Purpose Advances have been repaid in
full, then (4) the Term Loan until the Term Loan Advances have been
repaid in full and then (5) to all remaining outstanding and unpaid
Obligations; and
(ii) if there exists a Default or Event of Default, all mandatory
and voluntary Commitment reductions shall be applied (A) to the Revolver
Commitment and to the Special Purpose Commitment, pro rata, if the
Special Purpose Loan is a revolving loan as determined in accordance
with the terms of Section 2.17 hereof or (B) to the Revolver Commitment,
if the Special Purpose Loan is a term loan as determined in accordance
with the terms of Section 2.17 hereof; and
(iii) if there exists a Default or Event of Default, all
mandatory and voluntary prepayments shall be applied to Advances
outstanding under the Special Purpose Loan (if any), the Revolver Loan
and the Term Loan, pro rata, until the Advances outstanding under each
of the Special Purpose Loan, the Revolver Loan and the Term Loan have
been repaid in full, and then to all remaining outstanding Obligations.
2.14. Yield Protection; Changed Circumstances.
(a) If any Lender determines that either (i) the adoption of any
Applicable Law, rule, regulation or guideline regarding capital adequacy and
applicable to commercial banks or financial institutions generally or any change
therein, or any change, after the date hereof, in the interpretation or
administration thereof by any Tribunal, central bank or comparable agency
charged with the interpretation or administration thereof, or (ii) compliance by
any Lender (or Lending Office of any Lender) with any request or directive
applicable to commercial banks or financial institutions generally
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regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency has the effect of reducing the rate
of return on such Lender's capital as a consequence of its obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy) by an amount reasonably deemed by such Lender
to be material, then from time to time, within fifteen days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount or amounts
as will adequately compensate such Lender for such reduction. Each Lender will
notify the Borrower of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section 2.14(a)
as promptly as practicable after such Lender obtains actual knowledge of such
event; provided, no Lender shall be liable for its failure or the failure of any
other Lender to provide such notification. A certificate of such Lender claiming
compensation under this Section 2.14(a), setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder shall
be presumptive evidence of the validity of such claim. If such Lender demands
compensation under this Section 2.14(a), the Borrower may at any time, on at
least five Business Days' prior notice to such Lender (i) repay in full the then
outstanding principal amount of LIBOR Advances, of such Lender, together with
accrued interest thereon, or (ii) convert the LIBOR Advances to Base Advances in
accordance with the provisions of this Agreement; provided, however, that the
Borrower shall be liable for the Consequential Loss arising pursuant to those
actions.
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes, or its obligation to make a LIBOR Advance, or imposes on any Lender
any other condition affecting a Letter of Credit; and the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining its
Letter of Credit, LIBOR Advances, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under the Notes, the Letters
of Credit or reimbursement obligations by an amount deemed by such Lender, to be
material, then, within five days after demand by such Lender, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction. Each Lender will (i) notify the
Borrower of any event occurring after the date of this Agreement that entitles
such Lender to compensation pursuant to this Section 2.14(b), as promptly as
practicable after such Lender obtains actual knowledge of the event; provided,
no Lender shall be liable for its failure or the failure of any other Lender to
provide such notification and (ii) use good faith and reasonable efforts to
designate a different Lending Office for LIBOR Advances, of such Lender if the
designation will avoid the need for, or reduce the amount of, the compensation
and will not, in the sole opinion of such Lender, be disadvantageous to such
Lender. A certificate of such Lender claiming compensation under this Section
2.14(b), setting forth in reasonable detail the computation of the additional
amount or amounts to be paid to it hereunder shall be presumptive evidence of
the validity of such claim. If such Lender demands compensation under this
Section 2.14(b), the Borrower may at any time, on at least five Business Days'
prior notice to such Lender (i) repay in full the then outstanding principal
amount of LIBOR Advances, of such Lender, together with accrued interest
thereon, or (ii) convert the LIBOR Advances to Base Advances in accordance with
the provisions of this Agreement; provided, however, that the Borrower shall be
liable for the Consequential Loss arising pursuant to those actions.
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(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
issue or maintain Letters of Credit, make LIBOR Advances, to continue to fund or
maintain LIBOR Advances hereunder, make Base Rase Advances or otherwise perform
any of such Lender's obligations hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower, such Lender may take any of the
following actions: (i) each LIBOR Advance will automatically, upon such demand,
convert into a Base Advance, (ii) the obligation of such Lender to make, or to
convert Advances into, LIBOR Advances or Base Rate Advances, or both, shall be
suspended until such Lender notifies Administrative Agent and the Borrower that
such Lender has determined that the circumstances causing such suspension no
longer exist, and (iii) the obligation of such Lender to make or maintain
Letters of Credit shall be suspended until such Lender notifies Administrative
Agent and the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or
Event of Default, (i) each LIBOR Advance will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Advance and (ii)
the obligation of each Lender to make, or to convert Advances into, LIBOR
Advances shall be suspended.
(e) If any Lender notifies Administrative Agent that the LIBOR Rate for
any Interest Period for any LIBOR Advances will not adequately reflect the cost
to such Lender of making, funding or maintaining LIBOR Advances for such
Interest Period, Administrative Agent shall promptly so notify the Borrower,
whereupon (i) each such LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Agent that such
Lender has determined that the circumstances causing such suspension no longer
exist and Administrative Agent notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.14 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.14.
(g) The obligations of the Borrower under this Section 2.14 shall
survive any termination of this Agreement, provided that, in no event shall the
Borrower be required to make a payment under this Section 2.14 with respect to
any event of which the Lender making such claim had knowledge more than 12
months prior to demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.14 shall be
presumptively correct. Any certificate delivered to the Borrower by a Lender
pursuant to this Section 2.14 shall include in reasonable detail the basis for
such Lender's demand for additional compensation and a certification that the
claim for compensation is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender.
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(i) Notwithstanding any other provision of this Agreement, no Lender not
organized under the Laws of the United States or any State (or which has a Bank
Affiliate not organized under the Laws of the United States or any State) shall
be entitled to compensation pursuant to this Section 2.14 with respect to any
amount which would otherwise be due under this Section 2.14 but which is the
result of an act of a Tribunal of the country in which such Lender or Bank
Affiliate is organized, provided that, Lenders organized under the Laws of
Canada will be entitled to the benefits of this Section as a result of an act of
a Tribunal of Canada.
2.15. Use of Proceeds.
(a) REVOLVER ADVANCES. The proceeds of the Revolver Advances
shall be available (and the Borrower shall use such proceeds) solely (a)
on the Closing Date, to refinance existing indebtedness of the Parent,
the Borrower and the Designated Restricted Subsidiaries, (b) for
Permitted Acquisitions consummated by the Parent, the Borrower and the
Designated Restricted Subsidiaries, (c) for Capital Expenditures made by
the Parent, the Borrower and the Designated Restricted Subsidiaries and
permitted under the terms of this Agreement, (d) for working capital of
the Parent, the Borrower and the Designated Restricted Subsidiaries and
(e) for other lawful corporate purposes of the Parent, the Borrower and
the Designated Restricted Subsidiaries.
(b) SPECIAL PURPOSE ADVANCES AND THE INITIAL TERM LOAN ADVANCE.
The proceeds of the Special Purpose Advances and the initial Term Loan
Advance shall be available (and the Borrower shall use such proceeds)
solely to finance capital lease obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction
or improvement of property used in the business of the Parent, the
Borrower or any Designated Restricted Subsidiary.
2.16. Collateral and Collateral Call.
(a) COLLATERAL. Payment of the Obligations will be secured by (i) a
first perfected security interest in 100% of the Capital Stock of the Borrower
and each of the Subsidiaries of the Parent and the Borrower, except Excluded
Stock, (ii) Unlimited Guaranties of the Obligations by each Guarantor, (iii) a
first perfected security interest (except for Permitted Liens) in accounts,
inventory, non-fixture equipment of the Borrower, the Parent and each of the
Restricted Subsidiaries, inter-company loans among the Parent, the Borrower, and
the Subsidiaries (except loans between Unrestricted Subsidiaries), the Borrower
Deposit Account and the Parent Deposit Account, but excluding (A) all tangible
and intangible assets of Mutual Signal and the Subsidiaries of Mutual Signal,
(B) fiber and other related assets subject to an IRU, (C) microwave assets of
the Parent, the Borrower and the Restricted Subsidiaries, (D) intellectual
property of the Parent, the Borrower and the Restricted Subsidiaries, (E) motor
vehicles, and (F) assets subject to Liens permitted under Section 8.03(b)
hereof, and (iv) certain real estate sites and contract rights of the Parent,
the Borrower and the Restricted Subsidiaries (except Mutual Signal and its
Subsidiaries) (collectively, together with all other Properties or assets of the
Parent, the Borrower, Subsidiaries and other Persons securing the Obligations
from time to time, the "Collateral"). The Borrower agrees that it will, and will
cause the Parent and the Restricted Subsidiaries to execute and deliver, or
cause to be executed and delivered, such documents as the Administrative Agent
may from time to time reasonably request to create and perfect a first Lien
(subject to Permitted Liens) for the benefit of the Administrative Agent and the
Lenders in the Collateral, subject to the terms of Section 6.18 hereof.
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(b) COLLATERAL CALL. The Borrower agrees upon the creation, formation or
acquisition of any direct or indirect Restricted Subsidiary of the Borrower
and/or the Parent, to immediately pledge 100% of the Capital Stock of any such
Restricted Subsidiary to secure the Obligations, pursuant to a pledge agreement
substantially in the form of Exhibit H hereto, and to promptly deliver to the
Administrative Agent all certificates or other documentation evidencing 100% of
such Capital Stock and, if such Capital Stock is stock of a corporation,
together with stock powers executed in blank. The Borrower agrees,
notwithstanding (a) above, promptly upon request by the Administrative Agent, to
use its best efforts to take all actions necessary or advisable to promptly
grant the Administrative Agent on behalf of the Lenders a Lien and/or security
interest in all or any portion of the tangible and intangible assets and
Properties of the Parent, the Borrower and the Restricted Subsidiaries (whether
through Capital Stock or otherwise), including to immediately pledge/mortgage or
grant a first priority security interest in real property to secure the
Obligations, provided that under no circumstances shall the Borrower be required
to grant a Lien and/or security interest in the microwave assets, motor
vehicles, and other Properties and assets of the Parent, the Borrower and the
Restricted Subsidiaries subject to a Permitted Lien or a Lien permitted by
Section 8.03(b) hereof, or other assets which are prohibited by law or
prohibited contractually on the date hereof from being subject to Liens. The
Borrower agrees to use its best efforts to (and cause the Parent and the
Restricted Subsidiaries to use their best efforts to), upon the request of the
Majority Lenders, grant the Administrative Agent on behalf of Lenders a first
priority Lien or security interest (subject to Permitted Liens) in any asset of
the Borrower, the Parent or any of their Restricted Subsidiaries.
2.17. Conditions Precedent to the Making of the Special Purpose Loan.
Upon written request by the Borrower to Lenders of its choice
(including, as set forth below, other lenders not initially party to this
Agreement or the other Loan Papers), and only so long as each Lender determines
in its sole discretion in writing to make such Special Purpose Loan available to
the Borrower, or increase the amount of the Special Purpose Loan, the Special
Purpose Loan shall be made to the Borrower under the terms hereof, or increased
under the terms hereof, in an aggregate outstanding amount not to exceed
$250,000,000, in accordance with, and subject to, each of the terms and
conditions set forth below:
(a) The Special Purpose Loan, or any increase to the Special
Purpose Loan must be effective prior to December 31, 2000. The Borrower
and the Administrative Agent may request any or all of the Lenders and
any new creditors to participate in the making of the Special Purpose
Loan. No Lender shall be required to participate. The Borrower, the
Administrative Agent and the participating Lenders, and any new
creditors participating in the making of the Special Purpose Loan, shall
agree as to whether the Special Purpose Loan is a revolving loan or a
term loan, and shall further agree on all terms and conditions in
connection with such loan, including facility fees, commitment fees,
administrative fees, underwriting fees and other fees and amounts,
interest, amortization and other terms and conditions, provided that,
notwithstanding the foregoing, the Maturity Date shall be the same for
the Special Purpose Loan. Each such Lender electing to participate in
such Special Purpose Loan shall commit to an amount not less than
$10,000,000, but shall accept any allocation amount
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designated by the Borrower and the Administrative Agent that is equal to
or less than its proposed portion of the Special Purpose Loan. The
amount of the Special Purpose Loan (or the Special Purpose Commitment,
if the Special Purpose Loan is a revolving loan) shall be in excess of
$50,000,000, but not in an amount in excess of $250,000,000.
(b) Notwithstanding any other provision of this Agreement and the
Loan Papers, it is expressly agreed by each Lender that any provision of
Article II and Section 4.02(g) of this Agreement, and each of the
definitions used therein, may be amended, or amended and restated, to
effectuate the intent of this Section 2.17 by an agreement of the new
lenders for the Special Purpose Loan representing 51% or more of the
aggregate amount of the Special Purpose Loan, provided that,
notwithstanding the foregoing (i) no such amendment will (A) increase
the Revolver Commitment, (B) reduce any principal, interest, fees, or
other amounts payable hereunder, or waive or result in the waiver of any
Event of Default under Section 9.01(a) hereof, (C) postpone any date
fixed for any payment of principal, interest, fees, or other amounts
payable hereunder, (D) release or impair any Collateral or guaranties
securing any Obligor's obligations hereunder, other as contemplated
hereby and by the other Loan Papers or (E) change the meaning of "Total
Specified Percentage", "Revolver Specified Percentage", "Term Loan
Specified Percentage", except to adjust them to effectuate the intent of
Section 2.17 hereof, or the number of Lenders required to take any
action hereunder, (F) change the definitions of "Commitment", "Revolver
Commitment", "Maturity Date", "Majority Lenders", or "Letter of Credit
Commitment", without the consent of all Lenders, and (ii) this Agreement
and the Loan Papers will only be amended in order to effectuate the
intent of this Section 2.17.
(c) Upon satisfaction of each of the conditions precedent in this
Section 2.17, after the making of the Special Purpose Loan, and if the
Special Purpose Loan is a revolving loan, the Borrower shall be entitled
to increase the amount of the Special Purpose Commitment from time to
time in an aggregate amount for all such increases not to exceed
$200,000,000, and in each case by not less than $10,000,000 (or
$5,000,000 multiples thereof), provided that the Special Purpose
Commitment may not exceed $250,000,000 in the aggregate at any time.
Each Lender specified by the Borrower shall have received not less than
ten days' prior written notice from the Borrower (or such lesser notice
as acceptable to each specified Lender) requesting such Special Purpose
Commitment increase. Each such Lender electing to participate in such
Special Purpose Commitment increase shall commit to an amount not less
than $10,000,000, but shall accept any allocation amount designated by
the Borrower and the Administrative Agent that is equal to or less than
its proposed portion of the Special Purpose Commitment increase. If the
Special Purpose Loan is a term loan, the Borrower shall not be entitled
to increase the Special Purpose Loan.
(d) On any date of proposed making of a Special Purpose Loan or
increase to the Special Purpose Commitment, the representations and
warranties contained in Article V hereof must be true and correct on
such date, as though made on and as of such date, except to the extent
expressly made only as of a prior date.
(e) On any date of proposed making of a Special Purpose Loan or
increase to the Special Purpose Commitment, no Default or Event of
Default shall exist, and no Default or
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Event of Default would result from the making of such Special Purpose
Loan or such increase to the Special Purpose Commitment, and, with
respect to any increase to such Special Purpose Commitment, the sum of
all Special Purpose Advances outstanding shall not exceed the Special
Purpose Commitment.
(f) The Borrower shall have paid all such Lenders (including new
lenders) agreeing to provide any portion of the Special Purpose Loan all
facility fees and other upfront fees prior to the making of the Special
Purpose Loan. For any increase from time to time to the Special Purpose
Commitment, the Borrower and such Lenders (including the new lenders)
shall have agreed to an upfront facility fee for each such increase,
such fees to be negotiated at the time of access of each such increase,
which such fees in each case shall be paid prior to or on the date of
such increase.
(g) Notwithstanding anything herein or in any other Loan Paper to
the contrary, the Borrower and the Administrative Agent may agree to add
other creditors in connection with the making of the Special Purpose
Loan or any proposed increase to the Special Purpose Commitment.
(h) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, the Administrative Agent
shall have received a pro-forma Compliance Certificate in form and
substance acceptable to the Lenders and demonstrating compliance with
the terms of this Agreement and the Loan Papers for one full year after
the date of the making of any Special Purpose Loan and each increase to
the Special Purpose Commitment.
(i) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, the Administrative Agent
shall have received financial projections in form and substance
acceptable to the Lenders and demonstrating compliance with the
financial covenants set forth in Section 8.01 hereof throughout the term
of this Agreement.
(j) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, the Administrative Agent
shall have received a certificate from the Borrower to the effect that
(i) such making of the Special Purpose Loan or such increase has
received all required regulatory approvals, if necessary, and is in
compliance with all applicable Laws, and (ii) no other approvals or
consents from any Person are required by any such Person except to the
extent they have been received.
(k) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, the Administrative Agent and
each Lender (including any new Lenders party hereto) shall have received
new Special Purpose Notes evidencing the Special Purpose Loan, and any
increase in the Special Purpose Commitment, and the Borrower, each
Lender and each new Lender agrees to execute any and all such documents
deemed necessary by the Administrative Agent in order to effectuate this
Section 2.17 (and for no other purpose), whether UCC-1s, new
documentation relating to any Collateral, Unlimited Guaranty or
otherwise.
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(l) Promptly after making the Special Purpose Loan and promptly
after any increase of the Special Purpose Commitment, the Administrative
Agent shall deliver to each Lender evidence of new Special Purpose
Specified Percentages and Total Specified Percentages adjusted to give
effect to the Special Purpose Loan or any increase in the Special
Purpose Commitment.
(m) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, on or prior to the date of
making of such loan or increase, each new lender being added to the
credit facility shall deliver to the Borrower and the Administrative
Agent documentation acceptable to the Administrative Agent evidencing
such new Lender's acceptance of this Agreement and all the other Loan
Papers in form and substance reasonably acceptable to the Administrative
Agent (and making such lender a party to this Agreement and the other
Loan Papers).
(n) With respect to the making of the Special Purpose Loan and each
increase to the Special Purpose Commitment, on the date of making of
such loan or any such increase, the Administrative Agent shall deliver
to the Borrower notice of the cost of any LIBOR breakage or other
Consequential Loss incurred by any Lender as a result of such increase
and reallocation to the Lenders, and the Borrower shall pay such costs
on the date of increase in immediately available funds to the
Administrative Agent on behalf of such Lenders.
In connection with the making of any Special Purpose Loan and any
increase to the Special Purpose Commitment in accordance with the terms of this
Section 2.17, each existing Lender (regardless of whether such Lender is
participating in such increase) agrees to execute any and all agreements
requested by the Administrative Agent to effectuate the intent of this Section
2.17.
ARTICLE III. LETTERS OF CREDIT
3.01. ISSUANCE OF LETTERS OF CREDIT. The Borrower shall give the
Administrative Agent not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Agent
shall promptly notify each Lender of such request. Upon receipt of the
Borrower's properly completed and duly executed Applications, and subject to the
terms of such Applications and to the terms of this Agreement, the
Administrative Agent agrees to issue Letters of Credit on behalf of the Borrower
in an aggregate face amount not in excess of the lesser of (a) Letter of Credit
Commitment and (b) the remainder of the Revolver Commitment minus the sum of all
outstanding Revolver Advances plus the aggregate face amount of all outstanding
Letters of Credit. No Letter of Credit shall have a maturity extending beyond
the earliest of (i) the Maturity Date, or (ii) one year from the date of its
issuance, or (iii) such earlier date as may be required to enable the Borrower
to satisfy its repayment obligations under Section 2.06 hereof. Subject to such
maturity limitations and so long as no Default or Event of Default has occurred
and is continuing or would result from the renewal of a Letter of Credit, the
Letters of Credit may be renewed by the Administrative Agent in its discretion.
The Lenders shall participate ratably in any liability under the Letters of
Credit and in any unpaid reimbursement obligations of the Borrower with respect
to any Letter of Credit in their Revolver Specified Percentages. The amount of
the Letters of Credit issued and outstanding and the unpaid reimbursement
obligations of the Borrower for such Letters of Credit
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shall reduce the amount of Revolver Commitment available, so that at no time
shall the sum of (i) all outstanding Revolver Advances in the aggregate, plus
(ii) the aggregate face amount of all outstanding Letters of Credit, plus (iii)
(without duplication) all outstanding reimbursement obligations related to
Letters of Credit, exceed the Revolver Commitment, and at no time shall the sum
of all Revolver Advances by any Lender made plus its ratable share of amounts
available to be drawn under the Letters of Credit and the unpaid reimbursement
obligations of the Borrower in respect of such Letters of Credit exceed its
Revolver Specified Percentage of the Revolver Commitment.
3.02. LETTERS OF CREDIT FEE. In consideration for the issuance of each
Letter of Credit, the Borrower shall pay to (a) the Administrative Agent for its
sole account, an application and processing fee in the amount of the higher of
(i) $350.00 and (ii) the product of 1/8th of 1% multiplied by the face amount of
such Letter of Credit on each Letter of Credit, due and payable on the date of
issuance of each Letter of Credit, and (b) the Administrative Agent for the
account of the Lenders in accordance with their Revolver Specified Percentages,
a per annum fee for each Letter of Credit equal to the higher of (i) $350.00 and
(ii) the product of the Applicable Margin for a LIBOR Advance in effect on the
date of calculation multiplied by the face amount of each such Letter of Credit.
Each fee for each Letter of Credit under subsection (b) above shall be due and
payable to the Administrative Agent quarterly as it accrues, on each Quarterly
Date during the term of the Letter of Credit and on the expiration or renewal of
each such Letter of Credit, beginning with the first such Quarterly Date after
the issuance of each Letter of Credit and ending on the expiration date of each
such Letter of Credit.
3.03. REIMBURSEMENT OBLIGATIONS.
(a) The Borrower hereby agrees to reimburse Administrative Agent
immediately upon demand by Administrative Agent, and in immediately available
funds, for any payment or disbursement made by Administrative Agent under any
Letter of Credit. Payment shall be made by the Borrower with interest on the
amount so paid or disbursed by Administrative Agent from and including the date
payment is made under any Letter of Credit to and including the date of payment,
at the lesser of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate
in effect from time to time plus 2% per annum; provided, however, that if the
Borrower would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.02 to borrow Revolver Advances in amounts at least equal to their
reimbursement obligation for a drawing under any Letter of Credit, a Base
Advance by each Lender, in an amount equal to such Lender's Revolver Specified
Percentage, shall automatically be deemed made on the date of any such payment
or disbursement made by Administrative Agent in the amount of such obligation
and subject to the terms of this Agreement.
(b) The Borrower hereby also agrees to pay to Administrative Agent
immediately upon demand by Administrative Agent and in immediately available
funds, as security for their reimbursement obligations in respect of the Letters
of Credit under Section 3.03(a) hereof and any other amounts payable hereunder
and under the Notes, an amount equal to the aggregate amount available to be
drawn under Letters of Credit then outstanding, irrespective of whether the
Letters of Credit have been drawn upon, upon an Event of Default. Any such
payments shall be deposited in a separate account designated "IXC Communications
Services Special Account" or such other designation as Administrative Agent
shall elect. All such amounts deposited with Administrative Agent shall be and
shall remain funds of the Borrower on deposit with Administrative Agent and may
be invested by Administrative Agent as Administrative Agent shall determine.
Such amounts may not
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be used by Administrative Agent to pay the drawings under the Letters of Credit;
however, such amounts may be used by Administrative Agent as reimbursement for
Letter of Credit drawings which Administrative Agent has paid. During the
existence of an Event of Default but after the expiration of any Letter of
Credit that was not drawn upon, the Borrower may direct the Administrative Agent
to use any cash collateral for any such expired Letter of Credit, if any, to
reduce the amount of the Obligations. Any amounts remaining in the IXC
Communications Services Special Account, after the date of the expiration of all
Letters of Credit and after all Obligations have been paid in full, shall be
repaid to the Borrower promptly after such expiration and such payment in full.
(c) The obligations of the Borrower under this Section 3.03 will
continue until all Letters of Credit have expired and all reimbursement
obligations with respect thereto have been paid in full by the Borrower and
until all other Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative Agent
upon demand for all amounts paid under the Letters of Credit as set forth in
Section 3.03(a) hereof; provided, however, if the Borrower for any reason fails
to reimburse Administrative Agent in full upon demand, whether by failing to or
not being permitted to borrow Revolver Advances to pay such reimbursement
obligations or otherwise, the Lenders shall reimburse Administrative Agent in
accordance with each Lender's Revolver Specified Percentage for amounts due and
unpaid from the Borrower as set forth in Section 3.04 hereof; provided, however,
that no such reimbursement made by the Lenders shall discharge the Borrower's
obligations to reimburse Administrative Agent.
(e) The Borrower and the Parent shall indemnify and hold Administrative
Agent or any Lender, its officers, directors, representatives and employees
harmless from loss for any claim, demand or liability which may be asserted
against Administrative Agent or such indemnified party in connection with
actions taken under the Letters of Credit or in connection therewith (INCLUDING
LOSSES RESULTING FROM THE NEGLIGENCE OF ADMINISTRATIVE AGENT OR SUCH INDEMNIFIED
PARTY), and shall pay Administrative Agent for reasonable fees of attorneys (who
may be employees of Administrative Agent) and legal costs paid or incurred by
Administrative Agent in connection with any matter related to the Letters of
Credit, except for losses and liabilities incurred as a direct result of the
gross negligence or wilful misconduct of Administrative Agent or such
indemnified party. If the Borrower for any reason fails to indemnify or pay
Administrative Agent or such indemnified party of Administrative Agent as set
forth herein in full, the Lenders shall indemnify and pay Administrative Agent
upon demand, in accordance with each Lender's Revolver Specified Percentage of
such amounts due and unpaid from the Borrower. The provisions of this Section
3.03(e) shall survive the termination of this Agreement.
3.04. LENDERS' OBLIGATIONS. Each Lender agrees, unconditionally and
irrevocably to reimburse Administrative Agent on demand for such Lender's
Revolver Specified Percentage of each draw paid by Administrative Agent under
any Letter of Credit. All amounts payable by any Lender under this subsection
shall include interest thereon at the Federal Funds Rate, from the date of the
applicable draw to the date of reimbursement by such Lender. No Lender shall be
liable for the performance or nonperformance of the obligations of any other
Lender under this Section. The obligations of the Lenders under this Section
shall continue after the Maturity Date and shall survive termination of any Loan
Papers.
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3.05. ADMINISTRATIVE AGENT'S OBLIGATIONS.
(a) Administrative Agent makes no representation or warranty, and
assumes no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Administrative Agent assumes no responsibility for
the financial condition of the Borrower and its Subsidiaries or for the
performance of any obligation of the Borrower. Administrative Agent may use its
discretion with respect to exercising or refraining from exercising any rights,
or taking or refraining from taking any action which may be vested in it or
which it may be entitled to take or assert with respect to any Letter of Credit
or any Application.
(b) Administrative Agent shall be under no liability to any Lender, with
respect to anything the Administrative Agent may do or refrain from doing in the
exercise of its judgment, the sole liability and responsibility of
Administrative Agent being to handle each Lender's share on as favorable a basis
as Administrative Agent handles its own share and to promptly remit to each
Lender its share of any sums received by Administrative Agent under Article III
or any Application. Administrative Agent shall have no duties or
responsibilities except those expressly set forth herein and those duties and
liabilities shall be subject to the limitations and qualifications set forth
herein.
(c) Neither Administrative Agent nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender waives its right to
institute legal action against Administrative Agent for wrongful payment of any
Letter of Credit due to Administrative Agent's gross negligence or willful
misconduct. Administrative Agent shall incur no liability to any Lender, the
Borrower or any Affiliate of the Borrower or Lender in acting upon any notice,
document, order, consent, certificate, warrant or other instrument reasonably
believed by Administrative Agent to be genuine or authentic and to be signed by
the proper party.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND THE ISSUANCE OF
THE INITIAL LETTER OF CREDIT. The obligation of each Lender to make the initial
Advance under the Loans, or issue the initial Letter of Credit, is subject to
receipt by the Administrative Agent of each of the following, in form and
substance satisfactory to the Administrative Agent, with a copy (except for the
Notes) for each Lender:
(a) a loan certificate of the Borrower certifying as to the accuracy of
its representations and warranties in the Loan Papers, certifying that no
Default or Event of Default has occurred under the terms of this Agreement, and
including a certificate of incumbency with respect to each Authorized Officer,
and containing a representation that the following items are attached thereto,
and that each of such items remains unchanged and valid, except as shown on the
attachments: (i) copies of the Articles of Incorporation or other charter
documents of the Borrower, the Parent and each of the Restricted Subsidiaries,
certified to be true, complete and correct by the secretary of state of each
such Person's respective state of incorporation, (ii) copies of the By-Laws of
the Borrower, the Parent and
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each of the Restricted Subsidiaries and (iii) copies of a certificate of good
standing and a certificate of existence for the Parent in Delaware and Texas,
the Borrower in Delaware, Texas and California, each of the Restricted
Subsidiaries' state of incorporation, and each state where each Restricted
Subsidiary is qualified;
(b) duly executed Notes by the Borrower, payable to the order of each
Lender, one Revolver Note in an amount for each Lender equal to its Revolver
Specified Percentage of the Revolver Commitment on the Closing Date and one Term
Loan Note in an amount for each Lender equal to its Term Loan Specified
Percentage of $200,000,000 on the Closing Date;
(c) a loan certificate of the Borrower certifying that a copy of the
resolutions of the Borrower, the Parent and each of the Restricted Subsidiaries
authorizing them to execute, deliver and perform this Agreement, the Notes and
the other Loan Papers to which each of them is a party is attached and is a true
and accurate copy;
(d) in form and substance acceptable to the Administrative Agent, duly
executed and completed (i) pledge agreement by the Borrower and the Parent, and,
to the extent applicable, each Restricted Subsidiary, pledging the Capital Stock
of the Borrower and all Subsidiaries of the Borrower (except Excluded Stock),
(ii) Unlimited Guaranty of the Obligations by the Parent and each of the
Restricted Subsidiaries except Mutual Signal and Subsidiaries of Mutual Signal
and (iii) all security agreements, mortgages, deeds of trust, assignment
agreements, and other collateral agreements by the Borrower, the Parent and any
Restricted Subsidiary, as appropriate;
(e) original stock or membership certificates, as applicable,
constituting 100% of the issued Capital Stock of the Borrower and each direct
and indirect Subsidiary of the Borrower and the Parent (except Excluded Stock),
in each case together with stock powers executed in blank, and all other
Property owned by the Borrower, the Parent and the Restricted Subsidiaries which
requires possession by the Administrative Agent in order to perfect a Lien on
such Property;
(f) all other Loan Papers to be delivered on the Closing Date duly
executed and completed, dated the Closing Date;
(g) opinions addressed to Administrative Agent on behalf of the Lenders
of (i) corporate counsel to the Borrower, the Parent and each Restricted
Subsidiary with respect to organizational matters, authorization, execution,
etc., (ii) special FCC counsel and/or PUC counsel to the Borrower, the Parent
and the Restricted Subsidiaries, as applicable, with respect to the Licenses of
the Parent, the Borrower and the Restricted Subsidiaries and the transactions
contemplated hereby, (iii) opinions of local counsel of the Parent, the Borrower
and the Restricted Subsidiaries relating to the real estate Collateral, in each
case dated as of the Closing Date and in form and substance satisfactory to the
Administrative Agent and (iv) corporate counsel to the Borrower, the Parent and
each Restricted Subsidiary that the Loans are senior in priority to all
Indebtedness evidenced by the Existing Financing Documentation;
(h) reimbursement for Administrative Agent of its reasonable fees and
expenses and for Special Counsel's reasonable fees and expenses rendered through
the Closing Date;
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(i) executed copies of all Existing Financing Documentation and other
material agreements of the Parent, the Borrower and the Restricted Subsidiaries;
(j) a designation from the Borrower and the Parent that the Loans (and
the Unlimited Guaranties of the Loans by the Parent) constitute "Senior
Indebtedness" and "Designated Senior Indebtedness" as defined in, and in
accordance with the terms of, the Subordinated Notes Documentation and the
Junior Exchangeable Documentation, and a certificate of the Borrower and the
Parent that this Agreement is a "Credit Agreement" as defined in the
Subordinated Notes Documentation;
(k) evidence that all corporate proceedings of the Parent, the Borrower
and each Restricted Subsidiary taken in connection with the transactions
contemplated by this Agreement and the other Loan Papers, shall be reasonably
satisfactory in form and substance to the Lenders and Special Counsel; and the
Lenders shall have received copies of all documents or other evidence which the
Administrative Agent, Special Counsel or any Lender may reasonably request in
connection with such transactions;
(l) evidence that the product of (i) Operating Cash Flow of the Parent,
the Borrower and the Restricted Subsidiaries for the two fiscal quarters ended
March 31, 1998 and June 30 1998 times (ii) two, is not less than $60,000,000;
(m) copies of all UCC searches of all Properties of the Parent, the
Borrower and the Restricted Subsidiaries showing no Liens except Permitted Liens
and Liens permitted under Section 8.03(b) hereof;
(n) a duly completed Compliance Certificate evidencing no Default or
Event of Default dated as of the Closing Date;
(o) a certificate from the Borrower stating that there has been no
material adverse change in the financial condition, business, operations, or
prospects of the Parent, the Borrower and its Subsidiaries since June 30, 1998;
(p) evidence satisfactory that the Borrower, the Parent and each of
their Subsidiaries has (i) undertaken a detailed review and assessment of all
areas within its business and operations that could be adversely affected by the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Borrower, the Parent and their Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), ii) developed a detailed plan and timeline
for addressing the Year 2000 Problem on a timely basis, iii) to date,
implemented that plan in accordance with that timetable, iv) reasonably
anticipated that all computer applications that are material to their business
and operations will on a timely basis be able to perform properly date-sensitive
functions and v) will make (in accordance with its plan) an inquiry of each of
their key suppliers, vendors and customers as to whether such Persons will on a
timely basis be Year 2000 compliant in all material respects and, on the basis
of that inquiry, believe that all such Persons will be so compliant;
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(q) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Agent or any Lender may reasonably require in connection with the
transactions contemplated hereby, including without limitation the status,
organization or authority of the Parent, the Borrower or any Restricted
Subsidiary, and the enforceability of and security for the Obligations;
(r) the Borrower and the Parent shall have established the Borrower
Deposit Account and the Parent Deposit Account, respectively, both at the 901
Main Street, Dallas, Texas office of NationsBank, N.A., and the Administrative
Agent shall have a first and prior Lien and security interest in each such
account securing the Obligations, pursuant to documentation in form and
substance, and on terms and conditions, acceptable to the Administrative Agent;
and
(s) the Parent shall have delivered to the Borrower (with an executed
original copy for the Administrative Agent and each Lender) an irrevocable
direction to the Borrower to make any and all Distribution and dividend
payments, and loans and advances, from time to time for the benefit of the
Parent directly into the Parent Deposit Account, such direction to be in form
and substance satisfactory to the Administrative Agent, agreed and accepted by
the Borrower and shall state that (i) such direction is irrevocable by the
Parent and the Borrower until the Obligations hereunder have been paid in full
and the Commitment reduced to zero and terminated and (ii) the Administrative
Agent and the Lenders may rely on such direction in making the Loans hereunder.
4.02. CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT. The
obligation of each Lender to make each Advance hereunder (excluding each
Refinancing Advance), and the obligation of the Administrative Agent to issue
any Letter of Credit shall be subject to the further conditions precedent that
on the date of such Advance or such issuance of such Letter of Credit:
(a) All of the representations and warranties of the Borrower under this
Agreement shall be true and correct at such time in all material respects, both
before and after giving effect to the application of the proceeds of the Advance
or the issuance of the Letter of Credit, except those representations and
warranties that specifically speak as of a particular date;
(b) The incumbency of the Authorized Officers shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 4.01(a) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Agent. The Lenders may, without
waiving this condition, consider it fulfilled and a representation by the
Borrower made to such effect if no written notice to the contrary, dated on or
before the date of such Advance or the issuance of such Letter of Credit, is
received by the Administrative Agent from the Borrower prior to the making of
such Advance or such Letter of Credit;
(c) There shall not exist a Default or an Event of Default hereunder and
none shall exist as a result of making any such Advance or such Letter of
Credit, and the Administrative Agent shall have received written or telephonic
certification thereof by an Authorized Officer (which certification, if
telephonic, shall be followed promptly by written certification);
(d) No event shall have occurred that could reasonably be expected to
cause a Material Adverse Change since June 30, 1998;
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(e) In the case of each Letter of Credit, Borrower shall have delivered
to the Administrative Agent a duly executed and complete Application acceptable
to Administrative Agent;
(f) In the case of any Revolver Advance, the aggregate outstanding
Revolver Advances after giving effect to such proposed Revolver Advance, plus
the sum of the face amount of all outstanding Letters of Credit plus all
reimbursement obligations under Article III hereof, shall not exceed the
Revolver Commitment;
(g) In the case of any Special Purpose Advance, (i) if the Special
Purpose Loan is a revolving loan as determined in accordance with Section 2.17
hereof, the aggregate outstanding Special Purpose Advances after giving effect
to such proposed Special Purpose Advance shall not exceed the Special Purpose
Commitment, (ii) the Borrower shall represent and warrant that the use of the
proceeds of the Special Purpose Advance complies with Section 2.15(b) hereof
(and the delivery of a Borrowing Notice shall constitute such representation)
and (c) such Special Purpose Advance is permitted Debt under the Existing
Financing Documentation, including, without limitation, Section 4.03(b)(5) of
the Indenture with respect to the Subordinated Notes and Section (l)(ii)(B)(7)
of the Certificate of Designation with respect to the Junior Exchangeable; and
(h) In the case of the initial Term Loan Advance on the Closing Date,
(i) such initial Term Loan Advance shall not exceed $200,000,000 in the
aggregate, (ii) the Borrower shall represent and warrant that the use of the
proceeds of the initial Term Loan Advance complies with Section 2.15(b) hereof
(and the delivery of a Borrowing Notice shall constitute such representation)
and (c) such initial Term Loan Advance is permitted Debt under the Existing
Financing Documentation, including, without limitation, Section 4.03(b)(5) of
the Indenture with respect to the Subordinated Notes and Section (l)(ii)(B)(7)
of the Certificate of Designation with respect to the Junior Exchangeable; and
(i) Until the Administrative Agent and the Lenders are in receipt of an
executed Compliance Certificate evidencing compliance with all terms and
conditions of this Agreement using the Borrower prepared financial statements
for the 1998 year end and fiscal quarter ending December 31, 1998, the Borrower
shall have delivered evidence satisfactory to the Administrative Agent that the
sum of (i) the maximum aggregate Advances outstanding under the Loans and (ii)
the face amount of all outstanding Letters of Credit, shall not exceed
$275,000,000 at any one time.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to each Lender as follows:
(a) The respective jurisdictions of incorporation and percentage
ownership of the Subsidiaries of the Borrower and the Parent on the Closing Date
and listed on Schedule 5.01(a) hereto are true and correct. Each of the Borrower
and the Restricted Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state of organization. Each
of the Borrower, the Parent and the Restricted Subsidiaries has the corporate
power and corporate authority to own its properties and to carry on its business
as now being conducted. Each of the Borrower, the Parent and the Restricted
Subsidiaries is duly qualified, in good standing and authorized
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to do business in each jurisdiction in which the character of its Properties or
the nature of its business requires such qualification or authorization, except
where the failure to so qualify could not reasonably be expected to cause a
Material Adverse Change.
(b) The Borrower has corporate power and has taken all necessary
corporate action to authorize it to borrow hereunder. Each of the Parent, the
Borrower and the Restricted Subsidiaries has corporate power and has taken all
necessary corporate action to execute, deliver and perform the Loan Papers to
which it is party in accordance with the terms thereof, and to consummate the
transactions contemplated thereby. Each Loan Paper has been duly executed and
delivered by the Borrower, the Parent or such Restricted Subsidiary executing
it. Each of the Loan Papers to which the Borrower, the Parent and the Restricted
Subsidiaries are party is a legal, valid and binding obligation of the Borrower,
the Parent or such Restricted Subsidiary, as applicable, enforceable in
accordance with its terms, subject, to enforcement of remedies, to the following
qualifications: (i) equitable principles generally, and (ii) bankruptcy,
insolvency, liquidation, reorganization, reconstruction and other similar laws
affecting enforcement of creditors' rights generally (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower, the
Parent or any Subsidiary of the Borrower or the Parent).
(c) The execution, delivery and performance by the Borrower, the Parent
and the Restricted Subsidiaries of the other Loan Papers to which they are
respectively a party, and the consummation of the transactions contemplated
thereby, do not and will not (i) require any consent or approval not already
obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a
breach of, or constitute a default under the articles of incorporation or
by-laws of the Borrower, the Parent or any Restricted Subsidiary, or under any
material License, indenture, agreement or other instrument, to which the
Borrower, the Parent or any Restricted Subsidiary is a party or beneficiary of,
or by which they or their respective Properties may be bound, or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower, the Parent or any
Restricted Subsidiary, except Permitted Liens.
(d) The Borrower, the Parent and the Restricted Subsidiaries are
primarily engaged in the operation of telecommunications, internet and pursuing
activities related thereto.
(e) On the Closing Date, all material Licenses of the Parent, the
Borrower and the Restricted Subsidiaries have been duly authorized and obtained,
and are in full force and effect. The Parent, the Borrower and the Restricted
Subsidiaries are in compliance in all material respects with all provisions
thereof. On the Closing Date, no material License is the subject of any pending
or, to the best of the Borrower's knowledge, threatened challenge or revocation.
On each date after the Closing Date on which this representation is deemed to be
made, no material License is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge or revocation, which such event could
reasonably be expected to cause a Material Adverse Change. The Borrower, the
Parent and the Restricted Subsidiaries are not required to obtain any material
License that has not already been obtained from, or effect any material filing
or registration that has not already been effected with, the FCC, any applicable
PUC or any other federal, state or local regulatory authority in connection with
the execution and delivery of this Agreement or any other Loan Paper, or the
performance thereof (other than any enforcement of remedies by the
Administrative Agent on behalf of the Lenders), in accordance with their
respective terms, including any borrowings hereunder.
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(f) The Parent, the Borrower and the Restricted Subsidiaries are in
compliance in all material respects with all material Applicable Laws. The
Parent, the Borrower and the Restricted Subsidiaries have duly and timely filed
all reports, statements and filings that are required to be filed by any of them
under the Communications Act, and are in all material respects in compliance
therewith, including without limitation the rules and regulations of the FCC and
each applicable PUC. Except as set forth on SCHEDULE 5.01(f) hereto, as of the
Closing Date, the Borrower is not aware of any event or circumstance
constituting noncompliance (or any Person alleging noncompliance) with any rule
or regulation of the FCC or any applicable PUC. On each date after the Closing
Date on which this representation is deemed to be made, the Borrower is not
aware of any event or circumstance constituting noncompliance (or any Person
alleging noncompliance) with any rule or regulation of the FCC or any applicable
PUC, which such event or circumstance could reasonably be expected to cause a
Material Adverse Change.
(g) On the Closing Date, the Parent, the Borrower and the Restricted
Subsidiaries have good and indefeasible title to, or a valid leasehold interest
in, all of their material assets and Properties. On each date after the Closing
Date on which this representation is deemed to be made, the Parent, the Borrower
and the Restricted Subsidiaries have good and indefeasible title to, or a valid
leasehold interest in, all of their material assets and Properties, in which any
such failure could reasonably be expected to cause a Material Adverse Change.
None of the assets of the Parent, the Borrower and the Restricted Subsidiaries
is subject to any Liens, except Permitted Liens and Liens permitted under
Section 8.03(b) hereof. No financing statement or other Lien filing authorized
by the Parent, the Borrower or any Restricted Subsidiary (except relating to
Permitted Liens and Liens permitted by Section 8.03(b) hereof) is on file in any
state or jurisdiction that names the Borrower, the Parent or any of the
Restricted Subsidiaries as debtor or covers (or purports to cover) any assets of
the Parent, the Borrower or any of the Restricted Subsidiaries. The Parent, the
Borrower and the Restricted Subsidiaries have not signed any such financing
statement or filing, nor any security agreement authorizing any Person to file
any such financing statement or filing.
(h) On the Closing Date, except as reflected on SCHEDULE 5.01(h) hereto,
there is no action, suit, proceeding or any other Litigation pending against,
or, to the best of the Borrower's knowledge, threatened against the Parent, the
Borrower or any of their Subsidiaries, or in any other manner relating directly
and materially adversely to the Parent, the Borrower, any of their Subsidiaries,
or any of their material Properties, in any court or before any arbitrator of
any kind or before or by any governmental body. On each date after the Closing
Date on which this representation is deemed to be made, there is no action,
suit, proceeding or any other Litigation pending against, or, to the best of the
Borrower's knowledge, threatened against the Parent, the Borrower or any of
their Subsidiaries, or in any other manner relating to the Borrower, the Parent
or any of their Subsidiaries, or any of their Properties, in any court or before
any arbitrator of any kind or before or by any governmental body, which could
reasonably be expected to cause a Material Adverse Change.
(i) All federal, state and other Tax returns of the Borrower, the Parent
and their Subsidiaries required by law to be filed have been duly filed and all
federal, state and other Taxes, assessments and other governmental charges or
levies upon the Borrower, the Parent, their Subsidiaries or any of their
Properties, income, profits and assets, which are due and payable, have been
paid, except those that are diligently contested in good faith by the Borrower
and for which a
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reserve has been established in accordance with GAAP, and no Lien (other than a
Permitted Lien) has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced.
(j) The Borrower has furnished or caused to be furnished to the Lenders
copies of its financial statements at June 30, 1998 which are prepared in good
faith and complete in all material respects. Each such statement presents fairly
in all material respects and in accordance with GAAP, the financial position of
the Parent, the Borrower and the Restricted Subsidiaries as at such dates, and
the results of operations for the periods then ended (except that such financial
statements may be subject to year-end audit adjustments). The Borrower, the
Parent and the Restricted Subsidiaries have no material liabilities, contingent
or otherwise, nor material losses, except as disclosed in writing to the Lenders
prior to the Closing Date or as disclosed on any subsequent financial
statements. On the Closing Date after giving effect to the Advances made on such
date, the Borrower, the Parent and each of the Restricted Subsidiaries is
Solvent.
(k) On the Closing Date, since the date of the most recent financial
statements delivered to the Lenders, no event or circumstances have occurred or
arisen that could reasonably be expected to cause a Material Adverse Change.
(l) None of the Borrower, the Parent or their Controlled Group maintains
or contributes to any Plan other than those disclosed to the Administrative
Agent in writing. Each such Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code, and any other applicable Federal
or state law, rule or regulation. With respect to each Plan of the Borrower and
the Parent, and each member of its Controlled Group (other than a Multiemployer
Plan), all reports required under ERISA or any other Applicable Law to be filed
with any governmental authority, the failure of which to file could reasonably
result in liability of the Borrower, the Parent or any member of its Controlled
Group in excess of $100,000, have been duly filed. All such reports are true and
correct in all material respects as of the date given. No such Plan of the
Borrower, the Parent or any member of its Controlled Group has any accumulated
funding deficiency (as defined in Section 412(a) of the Code) (without regard to
any waiver granted under Section 412 of the Code), nor has any funding waiver
from the Internal Revenue Service been received or requested. None of the
Borrower, the Parent, or any member of its Controlled Group has failed to make
any contribution or pay any amount due or owing as required by Section 412 of
the Code or Section 302 of ERISA or the terms of any such Plan prior to the due
date under Section 412 of the Code and Section 302 of ERISA. There has been no
ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C),
4068(f), 4063(a) or 4043(b) of ERISA with respect to any Plan or trust of the
Borrower, the Parent or any member of its Controlled Group since the effective
date of ERISA. The value of the assets of each Plan (other than a Multiemployer
Plan) of the Borrower, the Parent and each member of its Controlled Group
equaled or exceeded the present value of the benefit liabilities, as defined in
Title IV of ERISA, of each such Plan as of the most recent valuation date using
Plan actuarial assumptions at such date. There are no pending or, to the best of
the Borrower's knowledge, threatened claims, lawsuits or actions (other than
routine claims for benefits in the ordinary course) asserted or instituted
against, and neither the Borrower, the Parent, nor any member of its Controlled
Group has knowledge of any threatened Litigation or claims against, (i) the
assets of any Plan or trust or against any fiduciary of a Plan with respect to
the operation of such Plan, or (ii) the assets of any employee welfare benefit
plan within the meaning of Section 3(1) or ERISA, or against any fiduciary
thereof with respect to the operation of any such plan. None of the Borrower,
the Parent or any member of its Controlled Group
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has engaged in any non-exempt prohibited transactions, within the meaning of
Section 406 or Section 4.08 of ERISA or Section 4975 of the Code, in connection
with any Plan. None of the Borrower, the Parent or any member of its Controlled
Group has incurred or reasonably expects to incur (A) any liability under Title
IV of ERISA (other than premiums due under Section 4007 of ERISA to the PBGC),
(B) any withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under Section
4201 of ERISA as a result of a complete or partial withdrawal (within the
meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C) any
liability under Section 4062 of ERISA to the PBGC or to a trustee appointed
under Section 4042 of ERISA. None of the Borrower, the Parent, any member of its
Controlled Group, or any organization to which the Borrower, the Parent, or any
member of its Controlled Group is a successor or parent corporation within the
meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069. None of the Borrower, the Parent or any member of
its Controlled Group maintains or has established any welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides for continuing
benefits or coverage for any participant or any beneficiary of any participant
after such participant's termination of employment except as may be required by
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA")
and the regulations thereunder, and at the expense of the participant or the
beneficiary of the participant, or retiree medical liabilities. Each of the
Borrower, the Parent and its Controlled Group which maintains a welfare benefit
plan within the meaning of Section 3(1) of ERISA has complied in all material
respects with any applicable notice and continuation requirements of COBRA and
the regulations thereunder.
(m) The Borrower is not, nor is the Parent or any of the Restricted
Subsidiaries, engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying any
margin stock within the meaning of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, and no part of the proceeds of the
Advances will be used to purchase or carry any margin stock (as defined by
Regulation U) or to extend credit to others for the purpose of purchasing or
carrying any margin stock. Not more than 25% of the assets of any of the Parent,
the Borrower or any of their Subsidiaries are margin stock (as defined by
Regulation U), and none of the Pledged Stock or other Capital Stock of the
Borrower, the Parent and their Subsidiaries is margin stock. None of the Parent,
the Borrower and their Subsidiaries, nor any agent acting on their behalf, have
taken or will knowingly take any action which might cause this Agreement or any
Loan Papers to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
(n) The Parent, the Borrower and the Restricted Subsidiaries are in
compliance with all of the provisions of their articles of incorporation. The
Parent, the Borrower and the Restricted Subsidiaries are in material compliance
with all of the provisions of their by-laws. As of the Closing Date, no event
has occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage of
time or giving of notice or both would constitute, (i) an Event of Default or
(ii) a default by the Parent, the Borrower or any of the Restricted Subsidiaries
under any material contract, or other material indenture, agreement or other
instrument, or any judgment, decree or order to which the Parent, the Borrower
or any of the Restricted Subsidiaries is a party or by which they or any of
their material Properties is bound. On each date after the Closing Date on which
this representation is deemed to be made, no event has
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occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage of
time or giving of notice or both would constitute, (i) an Event of Default or
(ii) a default by the Parent, the Borrower or any of the Restricted Subsidiaries
under any material contract or other material indenture, agreement or other
instrument, or any judgment, decree or order to which the Parent, the Borrower
or any of Restricted Subsidiaries is a party or by which they or any of their
material Properties is bound, that could reasonably be expected to cause a
Material Adverse Change.
(o) The Borrower is not, nor is the Parent or any of their Subsidiaries,
required to register under the provisions of the Investment Company Act of 1940,
as amended. Neither the entering into or performance by the Borrower of this
Agreement nor the issuance of the Notes, nor the execution, delivery and
performance of the obligations under the Loan Papers by the Parent and their
Subsidiaries, violates any provision of such act or requires any consent,
approval, or authorization of, or registration with, the Securities and Exchange
Commission or any other governmental or public body of authority pursuant to any
provisions of such act.
(p) On the Closing Date, none of the Parent, the Borrower nor any or
their Subsidiaries has any actual knowledge or reason to believe that any
substance deemed hazardous by any applicable Environmental Law, has been
installed on any real property now owned by the Parent, the Borrower or any of
their Subsidiaries, except (i) for hazardous substances the presence of which is
not in violation of law and (ii) as disclosed in writing to the Lenders. On each
date after the Closing Date on which this representation is deemed to be made,
none of the Parent, the Borrower nor any Restricted Subsidiary has any actual
knowledge or reason to believe that any substance deemed hazardous by any
applicable Environmental Law, has been installed in violation of law on any real
property now owned by the Parent, the Borrower or any of the Restricted
Subsidiaries except as disclosed to the Lenders in writing, and which could not,
in the reasonable judgment of the Borrower, cause a Material Adverse Change. As
of the Closing Date, the Parent, the Borrower and the Restricted Subsidiaries
are not in violation of or subject to any existing, pending or, to the best of
the Borrower's knowledge, threatened investigation or inquiry by any
governmental authority or to any material remedial obligations under any
applicable Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances, if
any, pertaining to any real property of the Parent, the Borrower and the
Restricted Subsidiaries. On each date after the Closing Date on which this
representation is deemed to be made, the Borrower, the Parent and the Restricted
Subsidiaries are not in violation of or subject to any existing, pending or, to
the best of the Borrower's knowledge, threatened investigation or inquiry by any
governmental authority or to any material remedial obligations under any
applicable Environmental Laws which could cause a Material Adverse Change, and
this representation and warranty would continue to be true and correct following
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances, if any, pertaining to any real property of the
Parent, the Borrower and the Restricted Subsidiaries. The Borrower, the Parent
and the Restricted Subsidiaries are not required to obtain any permits, Licenses
or similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures, and equipment forming a part of any real property of the
Borrower, the Parent or any Restricted Subsidiary by reason of any applicable
Environmental Laws, except those that have been obtained. As of the Closing
Date, the Parent, the Borrower and the Restricted Subsidiaries have no actual
knowledge or reason to believe, after reasonable investigation, that any
hazardous substances
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or solid wastes have been disposed of or otherwise released on or to the real
property of the Borrower or any of its Restricted Subsidiaries in violation of
any applicable Environmental Law. On each date after the Closing Date on which
this representation is deemed to be made, the Borrower, the Parent and the
Restricted Subsidiaries have no actual knowledge or reason to believe, that any
hazardous substances or solid wastes have been disposed of or otherwise released
on or to the real property of the Borrower, the Parent or any of the Restricted
Subsidiaries, within the meaning of the applicable Environmental Laws, except as
disclosed to the Lenders and which such disposal or release could not cause a
Material Adverse Change.
(q) On the Closing Date, there is no Litigation, or, to the best of the
Borrower's knowledge, threatened Litigation or pending or threatened claim of
breach or default, with respect to any material contract, or any loan agreement
or document evidencing any Debt for Borrowed Money of the Borrower, the Parent
or any of their Subsidiaries that has not been disclosed in writing to the
Lenders.
(r) All Pledged Stock has been duly authorized and validly issued, and
is fully paid and nonassessable. The Capital Stock described on Schedule 5.01(r)
hereto constitutes all the issued and outstanding Capital Stock of the Borrower
and the Subsidiaries of the Parent and the Borrower, or the Subsidiaries of
another Subsidiary of the Borrower, except such shares that have been issued
after the Closing Date, and 100% of the Capital Stock of the Borrower and the
Subsidiaries of the Borrower and the Parent (except Excluded Stock) is pledged
to the Administrative Agent to secure the Obligations (and was delivered to the
Administrative Agent together with stock powers executed in blank). No Person
has conversion rights with respect to, or any subscription rights, calls,
commitments or claims of any character for, or any repurchase or redemption
options relating to, the Pledged Stock, other than those that have been waived
and those in the Existing Financing Documentation. The Pledged Stock when issued
or sold, was either (i) registered or qualified under applicable federal or
state securities laws, or (ii) exempt therefrom.
(s) No broker's, finder's or other fee or commission will be payable by
the Borrower (other than to the Lenders hereunder) with respect to the making of
the Commitment or the Advances hereunder. The Borrower agrees to indemnify and
hold harmless the Administrative Agent and each Lender from and against any
claims, demand, liability, proceedings, costs or expenses asserted with respect
to or arising in connection with any such fees or commissions.
(t) No event has occurred which permits (or with the passage of time
would permit) the revocation or termination of any material License, which could
reasonably be expected to cause a Material Adverse Change.
(u) To the best knowledge of the Borrower, as of the Closing Date, the
Borrower, the Parent and their Subsidiaries have obtained all material patents,
trademarks, service-marks, trade names, copyrights, Licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
business as presently conducted and as proposed to be conducted. On each date
afer the Closing Date on which this representation is deemed to be made, the
Borrower, the Parent and the Restricted Subsidiaries have obtained all patents,
trademarks, service-marks, trade names, copyrights, Licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
business as presently conducted and as proposed to be conducted, except
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those, the failure of which to obtain could not be reasonably expected to cause
a Material Adverse Change. Nothing has come to the attention of the Borrower,
the Parent or any of the Restricted Subsidiaries to the effect that (i) any
process, method, part or other material presently contemplated to be employed by
the Parent, the Borrower or any Restricted Subsidiary may infringe any patent,
trademark, service-mark, trade name, copyright, License or other right owned by
any other Person, or (ii) there is pending or overtly threatened any claim or
Litigation against or affecting the Borrower, the Parent or any Restricted
Subsidiary contesting its right to sell or use any such process, method, part or
other material, which could reasonably be expected to cause a Material Adverse
Change.
(v) Neither this Agreement nor any other document, certificate or
statement which has been furnished to any Lender by or on behalf of the Parent,
the Borrower or any of their Subsidiaries in connection herewith contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statement contained herein and therein not
misleading at the time it was furnished. On the Closing Date, there is no fact
known to the Borrower and not known to the public generally that could
reasonably be expected to be both material and adverse to the interests of the
Lenders, which has not been set forth in this Agreement or in the documents,
certificates and statements furnished to the Lenders by or on behalf of the
Borrower prior to the date hereof in connection with the transaction
contemplated hereby. On each date after the Closing Date on which this
representation is deemed to be made, there is no fact known to the Borrower, the
Parent or any of their Subsidiaries, and not known to the public generally, that
could reasonably be expected to cause a Material Adverse Change, which has not
been disclosed to the Lenders in writing.
(w) The Borrower is not, nor is the Parent or any Restricted Subsidiary,
a party to any contractual relationship which is breached or in default solely
as a result of any change in the ownership or management of the Parent or the
Borrower, or the Board of Directors, unless the Borrower has agreed to a
substantially similar provision in this Agreement.
(x) YEAR 2000 COMPLIANCE.
(i) The Borrower has (A) undertaken a detailed review and
assessment of all areas within its business and operations that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that
computer hardware and software used by the Borrower, the Parent and
their Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999 (including recognizing and performing properly
date-sensitive functions in leap years)), (B) developed a detailed plan,
timeline and budget for addressing the Year 2000 Problem on a timely
basis, and (C) to date implemented that plan in accordance with that
timetable and budget. The aggregate costs to and charges by the Borrower
related to the Year 2000 Problem and being Year 2000 Compliant shall not
exceed an amount which could result in a Material Adverse Change.
(ii) Each of the Borrower, the Parent and their Subsidiaries is
in the process of making inquiry of each of its key suppliers, vendors
and customers as to whether such Person will on a timely basis be Year
2000 Compliant in all material respects. "Key suppliers, vendors and
customers" refers to those suppliers, vendors and customers of the
Borrower, the Parent and their Subsidiaries, the business failure of
which could result in a Material Adverse Change.
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(y) The Loans and the Unlimited Guaranties of the Loans and all
Obligations are senior in priority to all Existing Financing, except the Senior
Notes which will rank pari passu with the Obligations. The Loans and the
Unlimited Guaranties of the Loans and all Obligations constitute "Senior
Indebtedness" and "Designated Senior Indebtedness" under each of the
Subordinated Notes, the Subordinated Notes Documentation, the Junior
Exchangeable and the Junior Exchangeable Documentation. This Agreement is a
"Credit Agreement" as defined in the Subordinated Notes Documentation. Nothing
in this Agreement and the other Loan Papers violates any provision of the
Existing Financing Documentation, and no consent is required in connection with
any of the Existing Financing Documentation in order to execute, deliver and
perform under this Agreement and the other Loan Papers. There exists no breach,
default or event of default under any of the Existing Financing Documentation.
All notices required by any Existing Financing Documentation regarding the
execution, delivery or performance by the Borrower, the Parent or any Restricted
Subsidiary, or any action or agreement in connection with any of the Loan
Papers, has been given in accordance with the terms of the Existing Financing
Documentation.
5.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made under this Agreement and the other Loan Papers shall be
deemed to be made at and as of the Closing Date and at and as of the date of
each Advance, and each shall be true and correct in all material respects when
made. All such representations and warranties shall survive, and not be waived
by, the execution hereof by any Lender, any investigation or inquiry by any
Lender, or by the making of any Advance under this Agreement.
ARTICLE VI. GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
6.01. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.
(a) The Borrower and the Parent shall, and shall cause each Restricted
Subsidiary to, preserve and maintain, or timely obtain and thereafter preserve
and maintain (i) material rights, franchises, authorizations, consents,
privileges and all other material Licenses from federal, state and local
governmental bodies and any Tribunal (regulatory or otherwise) which the
Borrower, the Parent or such Restricted Subsidiary deems reasonably necessary or
advisable to conduct its business in the ordinary course, and (ii) its existence
(except as permitted by Section 8.05 hereof); and
(b) The Borrower and the Parent shall, and shall cause each Restricted
Subsidiary to, qualify and remain qualified and authorized to do business in
each jurisdiction in which the character of its Properties or the nature of its
business requires such qualification or authorization, except where the failure
to do so could not cause a Material Adverse Change.
6.02. Business; Compliance with Applicable Law. The Borrower and the
Parent shall, and shall cause each Restricted Subsidiary to (a) engage primarily
in the business of telecommunications and internet, and activities related
thereto, and (b) comply in all material respects with the requirements of all
Applicable Law.
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6.03. MAINTENANCE OF PROPERTIES. The Borrower and the Parent shall, and
shall cause each Restricted Subsidiary to, maintain or cause to be maintained
all their material Properties necessary to the conduct of their business
(whether owned or held under lease) in reasonably good repair, working order and
condition, taken as a whole, and from time to time make or cause to be made all
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
6.04. ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower and the
Parent shall, and shall cause each Restricted Subsidiary to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made and
all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. The Borrower and the Parent shall,
and shall cause each Restricted Subsidiary to, maintain a fiscal year ending on
December 31.
6.05. INSURANCE. The Borrower and the Parent shall, and shall cause each
Restricted Subsidiary to, maintain insurance from responsible companies in such
amounts and against such risks as shall be customary and usual in the industry
for companies of similar size and capability, but in no event less than the
amount and types insured as of the Closing Date. Each insurance policy shall
name the Administrative Agent as additional insured, or loss payee, as
appropriate, and provide for at least 30 days' prior notice to the
Administrative Agent of any proposed termination or cancellation of such policy,
whether on account of default or otherwise.
6.06. PAYMENT OF TAXES AND CLAIMS. The Borrower and the Parent shall,
and shall cause each Restricted Subsidiary to, pay and discharge all Taxes,
assessments and governmental charges or levies imposed upon it or its income or
Properties prior to the date on which penalties attach thereto, and all lawful
material claims for labor, materials and supplies which, if unpaid, might become
a Lien upon any of their Properties or assets except those Taxes, assessments
and charges contested by the Borrower diligently in good faith, and for which
adequate reserves have been established in accordance with GAAP. The Borrower
and the Parent shall, and shall cause each of their Subsidiaries to, timely file
all information returns required by federal, state or local Tax authorities.
6.07. VISITS AND INSPECTIONS. The Borrower and the Parent shall, and
shall cause each Restricted Subsidiary to, promptly, permit representatives of
the Administrative Agent or any Lender from time to time, upon prior notice
reasonable under the circumstances, to (a) visit and inspect the Properties of
the Borrower, the Parent and each Restricted Subsidiary as often as the
Administrative Agent or any Lender shall deem advisable, (b) inspect and make
extracts from and copies of the Borrower's, the Parent's and each Restricted
Subsidiary's books and records, and (c) discuss with the Borrower's, the
Parent's and each Restricted Subsidiary's directors, officers, employees and the
auditors of the Borrower, the Parent and each Restricted Subsidiary, its
business, assets, liabilities, financial positions, results of operations and
business prospects.
6.08. PAYMENT OF DEBT FOR BORROWED MONEY. The Borrower and the Parent
shall, and shall cause each Restricted Subsidiary to, pay its Debt for Borrowed
Money when and as the same becomes due.
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6.09. USE OF PROCEEDS.
(a) REVOLVER ADVANCES. The Borrower shall use the proceeds of the
Revolver Advances exclusively (a) on the Closing Date, to refinance
existing indebtedness of the Parent, the Borrower and the Designated
Restricted Subsidiaries, (b) for Permitted Acquisitions consummated by
the Parent, the Borrower and the Designated Restricted Subsidiaries, (c)
for Capital Expenditures made by the Parent, the Borrower and the
Designated Restricted Subsidiaries and permitted under the terms of this
Agreement, (d) for working capital of the Parent, the Borrower and the
Designated Restricted Subsidiaries and (e) for other lawful corporate
purposes of the Parent, the Borrower and the Designated Restricted
Subsidiaries.
(b) SPECIAL PURPOSE ADVANCES AND THE INITIAL TERM LOAN ADVANCE.
The Borrower shall use the proceeds of the Special Purpose Advances and
the initial Term Loan Advance exclusively to finance capital lease
obligations, mortgage financings or purchase money obligations, in each
case incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property used
in the business of the Parent, the Borrower or any Designated Restricted
Subsidiary.
6.10. INDEMNITY.
(a) Each of the Parent and the Borrower agrees, and shall cause each
Restricted Subsidiary to agree, to defend, protect, indemnify and hold harmless
the Administrative Agent, each Lender, each of their respective Affiliates, and
each of their respective (including such Affiliates') officers, directors,
employees, agents, attorneys, shareholders and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively, "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect or consequential and whether based on any federal, state, or
local laws and regulations), under common law or at equitable cause, or on
contract, tort or otherwise, arising from or connected with the past, present or
future operations of the Borrower, the Parent or any of their Subsidiaries, or
any of their predecessors in interest, in any manner relating to or arising out
of this Agreement, the Loan Papers, or any act, event or transaction or alleged
act, event or transaction relating or attendant thereto, the making of any
participations in the Advances and the management of the Advances, INCLUDING IN
CONNECTION WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF
ADMINISTRATIVE AGENT OR ANY LENDER (other than those matters raised exclusively
by a participant against the Administrative Agent or any Lender and not the
Borrower), or the use or intended use of the proceeds of the Advances hereunder,
or in connection with any investigation of any potential matter covered hereby,
but excluding any claim or liability that arises as the result of the gross
negligence or willful misconduct of any Indemnitee, as finally judicially
determined by a court of competent jurisdiction (collectively, the "Indemnified
Matters").
(b) In addition, the Borrower and the Parent shall, and shall cause each
Restricted Subsidiary to, periodically, upon request, reimburse each Indemnitee
for its reasonable legal and other actual expenses (including the cost of any
investigation and preparation) incurred in connection with
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any Indemnified Matter. If for any reason the foregoing indemnification is
unavailable to any Indemnitee or insufficient to hold any Indemnitee harmless
with respect to Indemnified Matters, then the Borrower and the Parent and the
Restricted Subsidiaries shall contribute to the amount paid or payable by such
Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by the Borrower and the Parent and the Restricted Subsidiaries, and the
Borrower's stockholders, the Parent's stockholders and the Restricted
Subsidiaries' stockholders, on the one hand and such Indemnitee on the other
hand but also the relative fault of the Borrower, the Parent, the Restricted
Subsidiaries and such Indemnitee, as well as any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations under
this Section shall be in addition to any liability which the Borrower may
otherwise have, shall extend upon the same terms and conditions to each
Indemnitee, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Borrower, the
Parent, the Restricted Subsidiaries, the Administrative Agent, the Lenders and
all other Indemnitees. This Section shall survive any termination of this
Agreement and payment of the Obligations.
6.11. ENVIRONMENTAL LAW COMPLIANCE. The Borrower and the Parent agree,
and shall cause each Restricted Subsidiary to agree, that the use which the
Borrower, the Parent or any of their Subsidiaries intends to make of any real
Property owned by it will not result in the disposal or other release of any
hazardous substance or solid waste on or to such real Property in violation of
any Environmental Law. As used herein, the terms "hazardous substance" and
"release" as used in this Section shall have the meanings specified in CERCLA
(as defined in the definition of applicable Environmental Laws), and the terms
"solid waste" and "disposal" shall have the meanings specified in RCRA (as
defined in the definition of applicable Environmental Laws); provided, however,
that if CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment; and provided further, to the extent that any other law
applicable to the Borrower, the Parent, any of their Subsidiaries or any of
their properties and assets establishes a meaning for "hazardous substance,"
"release," "solid waste," or "disposal" which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply. Each of the Parent, the
Borrower and each Restricted Subsidiary agrees to indemnify and hold the
Administrative Agent and each Lender harmless from and against, and to reimburse
them with respect to, any and all claims, demands, causes of action, loss,
damage, liabilities, costs and expenses (including reasonable attorneys' fees
and courts costs) of any kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any of them at any time and from
time to time by reason of or arising out of (a) the failure of the Parent, the
Borrower or any of their Subsidiaries to perform any obligation hereunder
regarding asbestos or applicable Environmental Laws, (b) any violation on or
before the Release Date of any applicable Environmental Law in effect on or
before the Release Date, and (c) any act, omission, event or circumstance
existing or occurring on or prior to the Release Date (including without
limitation the presence on such real Property or release from such real Property
of hazardous substances or solid wastes disposed of or otherwise released on or
prior to the Release Date), resulting from or in connection with the ownership
of the real Property, regardless of whether the act, omission, event or
circumstance constituted a violation of any applicable Environmental Law at the
time of its existence or occurrence, or whether the act, omission, event or
circumstance is caused by or relates to the negligence of any indemnified
Person; provided, that the Borrower shall not be under any obligation to
indemnify the Administrative Agent or any Lender to the extent that any such
liability arises as the result of the gross negligence or willful misconduct of
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such Person, as finally judicially determined by a court of competent
jurisdiction. The provisions of this paragraph shall survive the Release Date
and shall continue thereafter in full force and effect.
6.12. ACQUISITIONS, GENERALLY. In connection with any Permitted
Acquisition made by the Parent, the Borrower or any Restricted Subsidiary during
the term of this Agreement, the Borrower and the Parent shall and shall cause
each Restricted Subsidiary to, (a) not less than ten Business Days prior to the
proposed acquisition date, deliver to Administrative Agent a detailed written
description of the proposed Permitted Acquisition in form reasonably acceptable
to the Administrative Agent, and (b) prior to the consummation of the
acquisition a statement certified by an Authorized Officer that (i) the proposed
transaction complies with the definition of Permitted Acquisition set forth in
Article I hereof and with the terms and conditions set forth in Section 8.05(b)
hereof and/or, to the extent applicable, Section 8.05(d) hereof, and (ii) no
Default or Event of Default exists prior to or after giving effect to any
requested Advance or the consummation of such acquisition, or will exist upon
consummation of the proposed acquisition and related borrowings and
transactions, together with a Compliance Certificate computed after giving
effect to such acquisition and borrowings.
6.13. SUBSIDIARY DESIGNATION. The Borrower agrees that each Restricted
Subsidiary on the Closing Date will remain a Restricted Subsidiary until the
Obligations have been repaid in full and the Commitment has been terminated.
6.14. SUBSIDIARY CREATION OR ACQUISITION. The Borrower and the Parent
shall, and shall cause each Restricted Subsidiary to, give written notice to the
Administrative Agent in accordance with the terms of Section 11.02 hereof 20
days prior to the creation or acquisition of any Subsidiary.
6.15. YEAR 2000 COMPLIANCE. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of the Parent's, or any of the Borrower's and/or the
Parent's Subsidiaries' business and operations will not be Year 2000 Compliant
on a timely basis, except to the extent that such failure could not be
reasonably expected to cause a Material Adverse Change.
6.16. POST CLOSING UCC SEARCHES. The Borrower will provide the
Administrative Agent with UCC-11 searches in all States in which the Parent, the
Borrower or any Restricted Subsidiary has any operations, such searches to be
conducted not earlier than 60 days after the Closing Date and not later than 90
days after the Closing Date.
6.17. POST CLOSING ACQUISITION OF ASSETS, PROPERTIES AND CONTRACTUAL
ARRANGEMENTS. The Borrower and the Parent shall, and shall cause the Parent and
each Restricted Subsidiary to, use their best efforts to insure that all assets
and Properties acquired by any such Person after the Closing Date be in a form
and substance permitting the Administrative Agent on behalf of Lenders to have
the benefit of a first and prior Lien (subject to Permitted Liens and Liens
under Section 8.03(b) hereof) securing the Obligations. The Borrower will
promptly notify the Administrative Agent and Lenders in writing of any material
asset or Property acquired by the Borrower, the Parent or any Restricted
Subsidiary after the Closing Date, or any material contractual arrangement
entered into by the Parent, the Borrower or any Restricted Subsidiary after the
Closing Date, that will not permit Administrative Agent on behalf of Lenders to
be granted a Lien securing the Obligations.
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6.18. POST CLOSING GRANT OF LIENS. The Borrower and the Parent shall,
and shall cause each Restricted Subsidiary to (a) use its best efforts to grant
a Lien to the Administrative Agent on behalf of the Lenders in all fee owned
real Property of the Borrower, the Parent and the Restricted Subsidiaries by
December 31, 1998, and (b) use its reasonable efforts after the Closing Date to
grant a leasehold mortgage or deed of trust, as applicable, to the
Administrative Agent on behalf of the Lenders in all 20 leasehold properties
held by the Borrower, the Parent and the Restricted Subsidiaries upon which the
Administrative Agent, prior to the Closing Date, requested a Lien.
ARTICLE VII. INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled), the Borrower shall furnish or cause
to be furnished to each Lender:
7.01. QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within 45 days
after the end of each fiscal quarter, (a) consolidated and consolidating balance
sheets of the Parent, the Borrower and the Restricted Subsidiaries, (b)
consolidated balance sheets of the Parent, the Borrower and their Subsidiaries,
each as at the end of such quarter, and the related consolidated and
consolidating statements of income and consolidated statements of changes in
cash for such quarter and for the elapsed portion of the year ended with the
last day of such quarter, all of which shall be certified by an Authorized
Officer, to, in his or her opinion, present fairly in all material respects, in
accordance with GAAP, the financial position and results of operations of (i)
the Parent, the Borrower and the Restricted Subsidiaries, and (ii) the Parent,
the Borrower and their Subsidiaries, respectively, as at the end of and for such
period, and for the elapsed portion of the year ended with the last day of such
period, and (c) a schedule in form and substance, and in acceptable detail,
itemizing the transactions between the Restricted Subsidiaries and Unrestricted
Subsidiaries during such fiscal quarter.
7.02. ANNUAL FINANCIAL STATEMENTS AND INFORMATION.
(a) Within 90 days after the end of each fiscal year, a copy of (i) the
consolidated and consolidating balance sheets of the Parent, the Borrower and
the Restricted Subsidiaries, and (ii) the consolidated balance sheets of the
Parent, the Borrower and their Subsidiaries, each as of the end of the current
and prior fiscal years, (iii) consolidated and consolidating statements of
earnings, statements of changes in shareholders' equity, and statements of
changes in cash as of and through the end of such fiscal year for the Parent the
Borrower and the Restricted Subsidiaries and the Parent, the Borrower and their
Subsidiaries, respectively, all of which are prepared in accordance with GAAP,
and certified by independent certified public accountants acceptable to the
Lenders, whose opinion shall be in scope and substance in accordance with
generally accepted auditing standards and shall be unqualified, and (iv) a
schedule in form and substance, and in acceptable detail, itemizing the
transactions between the Restricted Subsidiaries and Unrestricted Subsidiaries
during such period.
(b) As soon as available, but in any event within 45 days following the
end of each fiscal year, a copy of the annual consolidated operating budget of
the Parent, the Borrower and the Restricted Subsidiaries for the succeeding
fiscal year.
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7.03. COMPLIANCE CERTIFICATES. At the time financial statements are
furnished pursuant to Section 7.01 and Section 7.02 hereof, a duly completed
Compliance Certificate evidencing no Default or Event of Default.
7.04. COPIES OF OTHER REPORTS AND NOTICES.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Parent, the Borrower or any Restricted
Subsidiary by accountants in connection with any annual, interim or special
audit, including without limitation any report prepared in connection with the
annual audit referred to in Section 7.02 hereof, and any other comment letter
submitted to management in connection with any such audit, (ii) each financial
statement, report, notice or proxy statement sent by the Parent, the Borrower or
any Restricted Subsidiary to stockholders generally, (iii) each regular or
periodic report and any registration statement or prospectus (or material
written communication in respect of any thereof) filed by the Parent, the
Borrower or any Restricted Subsidiary with any securities exchange, with the
Securities and Exchange Commission or any successor agency, and (iv) all press
releases concerning material financial aspects of the Parent, the Borrower or
any Restricted Subsidiary.
(b) Promptly upon becoming aware (i) that the holder(s) of any note(s)
or other evidence of indebtedness or other security of the Borrower, the Parent
or any Restricted Subsidiary in excess of $250,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, (ii) of any occurrence or non-occurrence
of any event which constitutes or which with the passage of time or giving of
notice or both could constitute a material breach by the Parent, the Borrower or
any Restricted Subsidiary under any material agreement or instrument other than
this Agreement to which the Parent, the Borrower or any Restricted Subsidiary is
a party or by which any of their Properties may be bound, or (iii) of the
occurrence of any event, circumstance or condition which could reasonably be
expected to cause a Material Adverse Change, a written notice specifying the
details thereof (or the nature of any claimed default or event of default) and
what action is being taken or is proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and
copies of any notices received from the FCC, any applicable PUC or any other
federal, state or local regulatory agencies or any tribunal relating to any
order, ruling, law, information or policy that relates to a breach of or
noncompliance with the Communications Act or any law, rule or regulation of any
applicable PUC, or might result in the payment of money by the Borrower, the
Parent or any Restricted Subsidiary in an amount of $250,000 or more in the
aggregate, or otherwise cause a Material Adverse Change, or result in the loss
or suspension of any material License or any material contract;
(d) Promptly upon the knowledge of an Authorized Officer of receipt by
the Parent, the Borrower or any Restricted Subsidiary from any governmental
agency, or any government, political subdivision or other entity, of any
material notice, correspondence, hearing, proceeding or order regarding or
affecting the Parent, the Borrower, any Restricted Subsidiary, or any of their
Properties or businesses not in the ordinary course of business, a copy of such
notice, correspondence, hearing, proceeding or order; and
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(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Parent, the Borrower and the Restricted
Subsidiaries, as the Administrative Agent or any Lender may reasonably request.
7.05. NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS. Prompt notice of
the following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all proceedings and investigations by or before
the FCC, any applicable PUC, or any other governmental body, and all other
actions and proceedings in any court or before any arbitrator involving claims
for damages (including punitive damages) in excess of either $1,000,000 for any
one proceeding or investigation, or $5,000,000 in the aggregate for all such
proceedings and investigations (after deducting the amount with respect to the
Borrower, the Parent or any of their Subsidiaries is insured), against or in any
other way relating directly to the Borrower, the Parent, any of their
Subsidiaries, or any of their properties, assets or businesses;
(b) Promptly upon the happening of any condition or event which
constitutes a Default or Event of Default, a written notice specifying the
nature and period of existence thereof and what action is being taken or is
proposed to be taken with respect thereto; and
(c) Any event which could cause a Material Adverse Change with respect
to the business, assets, liabilities, financial position, results of operations
or prospective business of the Parent, the Borrower or any of their
Subsidiaries.
7.06. ERISA REPORTING REQUIREMENTS.
(a) Promptly and in any event (i) within 30 days after the Borrower, the
Parent or any member of their Controlled Group knows or has reason to know that
any ERISA Event described in clause (a) of the definition of ERISA Event or any
event described in Section 4063(a) of ERISA with respect to any Plan of the
Parent or the Borrower or any member of their Controlled Group has occurred, and
(ii) within 10 days after the Borrower, the Parent or any member of their
Controlled Group knows or has reason to know that any other ERISA Event with
respect to any Plan of the Parent, the Borrower or any member of their
Controlled Group has occurred or a request for a minimum funding waiver under
Section 412 of the Code with respect to any Plan of the Borrower, the Parent or
any member of their Controlled Group, a written notice describing such event and
describing what action is being taken or is proposed to be taken with respect
thereto, together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by the Parent, the Borrower or any member of their Controlled Group from
the PBGC, copies of each notice received by the Parent or the Borrower or any
member of their Controlled Group of the PBGC's intention to terminate any Plan
or to have a trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by
the Borrower, the Parent or any member of its Controlled Group with the United
States Department of Labor, the Internal Revenue Service or the PBGC, copies of
each annual and other report (including Schedule B thereto) with respect to each
Plan;
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(d) Promptly and in any event within 30 days after receipt thereof, a
copy of any notice, determination letter, ruling or opinion the Borrower or any
member of its Controlled Group receives from the PBGC, the United States
Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of their
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Parent, the Borrower or such member of its Controlled
Group setting forth details as to the events giving rise to such potential
withdrawal liability and the action which the parent, the Borrower or such
member of their Controlled Group is taking or proposes to take with respect
thereto;
(f) Notification within 30 days of any material increases in the
benefits of any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any Plan
to which the Borrower, the Parent or any member of their Controlled Group was
not previously contributing;
(g) Notification within three Business Days after the Borrower, the
Parent or any member of their Controlled Group knows or has reason to know that
the Borrower, the Parent or any such member of their Controlled Group has or
intends to file a notice of intent to terminate any Plan under a distress
termination within the meaning of Section 4041(c) of ERISA and a copy of such
notice; and
(h) Promptly after receipt of written notice of commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower, the Parent or any member of their Controlled
Group with respect to any Plan.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
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8.01. FINANCIAL COVENANTS.
(a) TOTAL LEVERAGE RATIO.Commencing December 31, 1998 and continuing at
all times until the Obligations have been repaid in full, the Borrower shall not
permit the Total Leverage Ratio to be more than the following ratios during the
following time periods:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
From December 31, 1998 through March 30, 1999 7.50 to 1.00
From March 31, 1999 through March 30, 2000 6.50 to 1.00
From March 31, 2000 through March 30, 2001 5.50 to 1.00
From March 31, 2001 through March 30, 2002 4.50 to 1.00
From March 31, 2002 and thereafter 3.50 to 1.00
</TABLE>
(b) SENIOR LEVERAGE RATIOCommencing December 31, 1998 and continuing at
all times until the Obligations have been repaid in full, the Borrower shall not
permit the Senior Leverage Ratio to be more than the following ratios during the
following time periods:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
From December 31, 1998 through March 30, 2000 3.00 to 1.00
From March 31, 2000 through March 30, 2001 2.75 to 1.00
From March 31, 2001 through March 30, 2002 2.50 to 1.00
From March 31, 2002 and thereafter 2.00 to 1.00
</TABLE>
(c) INTEREST COVERAGE RATIO. Commencing December 31, 1998 and continuing
at all times until the Obligations have been repaid in full, the Borrower shall
not permit the Interest Coverage Ratio to be less than the following ratios
during the following time periods:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
From December 31, 1998 through December 31, 1999 2.00 to 1.00
From January 1, 2000 through December 31, 2000 2.50 to 1.00
From January 1, 2001 and thereafter 3.00 to 1.00
</TABLE>
(d) CAPITAL EXPENDITURES.The Borrower shall not permit Capital
Expenditures made by the Parent, the Borrower and the Restricted Subsidiaries
for each fiscal year of the Borrower to exceed the amounts set forth below for
each fiscal year; provided that, to the extent that less than such amount set
forth below was used by the Parent, the Borrower and the Restricted Subsidiaries
for Capital Expenditures for any fiscal year, the Borrower, the Parent or the
Restricted Subsidiaries may increase the limitation on Capital Expenditures for
the succeeding fiscal year (and such succeeding fiscal year only), provided that
such increases in the aggregate do not exceed the amount of such unused amount.
<TABLE>
<CAPTION>
PERIOD AMOUNT
------ ------
<S> <C>
From July 1, 1998 through December 31, 1998 $425,000,000
For the Fiscal Year 1999 $475,000,000
For the Fiscal Year 2000 $175,000,000
</TABLE>
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(e) FIXED CHARGE COVERAGE RATIO. Commencing September 30, 2001 and
continuing at all times until the Obligations have been repaid in full, the
Borrower shall not permit the Fixed Charge Coverage Ratio to be less than the
following ratios during the following time periods:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
From September 30, 2001 and thereafter 1.00 to 1.00
</TABLE>
(f) MINIMUM OPERATING CASH FLOW. Operating Cash Flow for the Parent, the
Borrower and the Restricted Subsidiaries may not be less than the amounts set
forth below for the fiscal quarters set forth below:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
Fiscal Quarter Ending September 30, 1998 $16,000,000
Two Fiscal Quarters Ending December 31, 1998 $48,000,000
</TABLE>
8.02. DEBT FOR BORROWED MONEY. The Borrower and the Parent shall not,
and shall not permit any Restricted Subsidiary to, create, assume, incur or
otherwise become or remain obligated in respect of, or permit to be outstanding,
or suffer to exist any Debt for Borrowed Money or issue any Preferred Stock,
except:
(a) with respect to the Borrower, the Parent and the Restricted
Subsidiaries, Debt for Borrowed Money under the Loan Papers;
(b) with respect to the Parent, the Borrower and its Restricted
Subsidiaries, Debt for Borrowed Money in existence on the Closing Date described
on Schedule 8.02 hereto and not otherwise permitted pursuant to the terms of
this Section 8.02, including without limitation, the Existing Financing, in each
case only in the principal amounts and as such Debt for Borrowed Money exists as
of the Closing Date, provided that, existing Debt of the Parent not in excess of
the amount of $49,000,000 shall be included in Section 8.02(g) below;
(c) provided that no Default or Event of Default exists or would result
from the incurrence thereof, with respect to the Parent, the Borrower and the
wholly owned Restricted Subsidiaries, Debt owed to each other;
(d) so long as there exists no Default or Event of Default both before
and after giving effect thereto, Debt of the Borrower in respect to Interest
Rate Protection Agreements;
(e) so long as there exists no Default or Event of Default both before
and after giving effect thereto, Debt of the Borrower and the Parent in respect
of Permitted Refinancing Indebtedness;
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(f) commencing no earlier than March 31, 1999, so long as there exists
no Default or Event of Default both before and after giving effect thereto,
(i) either (A) unsecured Debt of the Parent which (I) is pursuant
to terms and conditions no more onerous than the terms and provisions of
the Loans and (II) has a maturity of at least one year beyond the
Maturity Date OR (B) Preferred Stock issued by the Parent which (I) is
pursuant to terms and conditions no more onerous than the terms and
provisions of the Loans and (II) has a maturity of at least one year
beyond the Maturity Date, in either case of (A) or (B) above (or any
combination of either), in an aggregate amount that, when added to the
Debt of the Borrower permitted by (ii) below, does not exceed in an
aggregate amount outstanding at any one time $300,000,000; or
(ii) Subordinated Indebtedness of the Borrower, so long as such
Subordinated Indebtedness of the Borrower when aggregated with Debt or
Preferred Stock of the Parent (or both) permitted in (i) above does not
exceed in an aggregate amount outstanding at any one time $300,000,000;
and
(g) so long as there exists no Default or Event of Default both before
and after giving effect to the incurrence thereof, Debt of the Borrower and the
Parent (including obligations with respect to Capital Leases and acquired Debt
of the Borrower) in an aggregate amount outstanding at any one time of
$78,000,000 (which such $78,000,000 includes Debt existing on the Closing Date
in an amount not in excess of $49,000,000), provided that, notwithstanding the
foregoing, $10,000,000 in the aggregate of the $78,000,000 basket may be
acquired Debt of one or more Restricted Subsidiaries.
8.03. LIENS. The Borrower and the Parent shall not, and shall not permit
any Restricted Subsidiary to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets or Properties, whether now
owned or hereafter acquired, except (a) Permitted Liens, and (b) so long as no
Default or Event of Default exists or would result from the incurrence of such
Lien, Liens securing Debt permitted to be incurred by Section 8.02(g) hereof
(and any Permitted Refinancing Indebtedness of such Debt), but only so long as
such Debt secured thereby shall not be increased and the Liens shall cover
Properties of the Borrower and the Parent purchased with the proceeds of such
Debt and shall not cover additional assets of the Borrower, the Parent or any
such Restricted Subsidiary. Except to the extent that any such provision is
contained in the Existing Financing Documentation, the Borrower and the Parent
shall not, and shall not permit any Restricted Subsidiary to, agree with any
other Person that it shall not create, assume, incur, permit or suffer to exist
or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its assets or Properties.
8.04. INVESTMENTS. The Borrower and the Parent shall not, and shall not
permit any Restricted Subsidiary to, make any Investment, except that the
Borrower and the Parent may purchase or otherwise acquire and own:
(a) Marketable, direct obligations of, or guaranteed by, the United
States of America and maturing within 365 days of the date of purchase;
(b) Commercial paper maturing not more than 90 days after the date of
acquisition, issued by U.S. corporations (other than Affiliates of the Borrower
and the Parent) that have a rating of A-1/P-1 or better by Standard & Poor's
Ratings Group, a Division of McGraw-Hill, Inc. or Moody's Investors Service,
Inc.;
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(c) time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has a capital surplus and
undivided profits aggregating in excess of $50,000,000 (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Exchange Act);
(d) securities with maturities of six months or less from the date of
acquisition, issued or fully guaranteed by any state, commonwealth or territory
of the United States of America, or by an political subdivision or taxing
authority thereof, and rated at least "A" by Standard & Poor's Ratings Group, a
Division of McGraw-Hill, Inc. or "A" by Moody's Investors Service, Inc.;
(e) Investments in acquisitions permitted by Section 8.05(b) hereof, so
long as (i) the Capital Stock of each new Subsidiary is pledged to the Lenders
to secure the Obligations pursuant to a pledge agreement substantially identical
in form and substance to the Pledge Agreement, and (ii) each new Restricted
Subsidiary of the Borrower or the Parent (A) is subject to the provisions
hereof, (B) immediately becomes a party to an Unlimited Guaranty and (C) grants
a Lien and security interest in all such assets and Properties of such new
Subsidiary of the type already constituting Collateral hereunder and as
requested by the Majority Lenders, except assets subject to Permitted Liens and
Liens permitted by Section 8.03(b) hereof, pursuant to security documents
required by the Administrative Agent substantially in the form of those already
constituting Loan Papers;
(f) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms;
(g) Investments in existence on the Closing Date described on SCHEDULE
8.04 hereto and Investments disclosed on SCHEDULE 8.16 hereto;
(h) Investments in the PSINet Shares, in accordance with the transaction
described on SCHEDULE 8.16 hereto (and any debt or equity securities received by
the Borrower, the Parent or any Restricted Subsidiary in exchange for all or any
portion of the PSINet Shares);
(i) Permitted Investments;
(j) Investments in 100% of the Capital Stock of Unrestricted
Subsidiaries so long as:
(i) there exists no Default or Event of Default both before and
after giving effect to such Investment,
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(ii) the aggregate revenues of the Unrestricted Subsidiaries does
not exceed 30% of the consolidated revenues of the Parent, the Borrower
and all of the Subsidiaries of the Parent and the Borrower, and
(iii) the purchase price of any such interest in Unrestricted
Subsidiaries is paid in (i) Capital Stock of the Parent, (ii) cash from
Unrestricted Subsidiaries, (iii)debt securities or Preferred Stock of
Unrestricted Subsidiaries or (iv) equity securities of Subsidiaries of
Unrestricted Subsidiaries, or any combination of the foregoing;
(k) receivables owing to the Parent, the Borrower or any Restricted
Subsidiary if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the Parent,
the Borrower or any such Restricted Subsidiary deems reasonable under the
circumstances;
(l) payroll, travel, commission and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business;
(m) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Parent, the Borrower or such
Restricted Subsidiary;
(n) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Parent, the Borrower
or any Restricted Subsidiary or in satisfaction of judgments;
(o) any Person primarily engaged in a business similar to the Parent to
the extent the Investment represents a minority equity interest in such Person
which is received as the consideration for the disposition by the Parent, the
Borrower or any Restricted Subsidiary of a fiber IRU (which does not require
significant additional capital expenditures for optronics or electronic
equipment) which the Board of Directors has determined in good faith is excess
out the reasonable requirements of the Parent, the Borrower or such Restricted
Subsidiary;
(p) any Person to the extent such Investment is dividended or otherwise
distributed to the Parent, the Borrower or a Restricted Subsidiary by an
Unrestricted Subsidiary (and in connection therewith there exists no payment of
any kind to such Unrestricted Subsidiary); and
(q) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in subparagraph (a) above entered
into with a bank meeting the qualifications described in subparagraph (c) above.
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8.05. LIQUIDATION, DISPOSITION OR ACQUISITION OF ASSETS, MERGER, NEW
SUBSIDIARIES. The Borrower and the Parent shall not, and shall not permit any
Restricted Subsidiary of the Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, Properties or business other
than (i) so long as the Borrower complies with Section 2.05 and Section 2.11
hereof, Permitted Asset Sales, (ii) so long as there exists no Default or Event
of Default both before and after giving effect to any such sale and the Borrower
complies with Section 2.05 and Section 2.11 hereof, (A) sales of assets with a
sales price of less than $5,000,000 for any one sale and less than $10,000,000
in the aggregate for all such sales from the Closing Date through the Maturity
Date, (B) sales of accounts receivable in accordance with the terms of Section
8.12 hereof, (C) and after delivery of prior written notice to the
Administrative Agent, any Restricted Subsidiary of the Borrower can be dissolved
so long as a wholly owned Restricted Subsidiary of the Borrower that has
executed an Unlimited Guaranty or the Borrower acquires all such Restricted
Subsidiary's assets (and such Restricted Subsidiary may be released from its
Unlimited Guaranty), (D) after delivery of prior written notice to the
Administrative Agent, any wholly owned direct or indirect Restricted Subsidiary
of the Borrower that has executed an Unlimited Guaranty of the Obligations
hereunder may sell or transfer assets, Property or business to the Borrower or
any other wholly owned indirect or indirect Restricted Subsidiary of the
Borrower that has executed an Unlimited Guaranty of the Obligations hereunder,
and (E) the Borrower may sell all or any portion of the PSINet Shares.
(b) acquire any assets, Property or business of any other Person, or
participate in any joint venture, except (i) assets and Property acquired in the
ordinary course of business, (ii) provided that the Borrower complies fully with
Sections 6.12, 8.04(e) and 8.05(d) hereof, Permitted Acquisitions may be
consummated, (iii) after delivery of prior written notice to the Administrative
Agent, the Borrower or any wholly owned direct or indirect Restricted Subsidiary
of the Borrower that has executed an Unlimited Guaranty of the Obligations
hereunder may acquire assets, Property or business from any other wholly owned
direct or indirect Restricted Subsidiary of the Borrower that has executed an
Unlimited Guaranty of the Obligations hereunder, (iv) assets acquired
constituting wholly owned Unrestricted Subsidiaries in accordance with the terms
of Section 8.04(j) hereof, (v) assets acquired in connection with transactions
described on Schedule 8.16 hereto and (vi) Investments permitted by Section 8.04
hereof;
(c) enter into any merger or consolidation, except that, so long as
there exists no Default or Event of Default and none is caused thereby (i) after
delivery of prior written notice to the Administrative Agent, any wholly owned
Restricted Subsidiary of the Borrower can merge or consolidate into any other
wholly owned Restricted Subsidiary of the Borrower, or so long as such
transaction is in connection with a Permitted Acquisition, into another Person,
so long as a wholly owned Restricted Subsidiary of the Borrower which has
executed an Unlimited Guaranty is a survivor, or into the Borrower so long as
the Borrower is the surviving corporation or (ii) after delivery of prior
written notice to the Administrative Agent, another Person may be merged into
the Borrower or any wholly owned Restricted Subsidiary of the Borrower that has
executed an Unlimited Guaranty in connection with a Permitted Acquisition, so
long as the Borrower or such wholly owned Restricted Subsidiary is the surviving
corporation; and
(d) create or acquire any Subsidiary, except (a) as permitted by Section
8.04(e) hereof and Section 8.05(b) above, (b) Unrestricted Subsidiaries in
accordance with the terms and conditions of Section 8.04(i) or (j) hereof, and
(c) so long as (i) there exists no Default or Event of Default both before and
after giving effect to the creation of any new wholly owned Restricted
Subsidiary and the
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transfer of any assets to such wholly owned Restricted Subsidiary, (ii)
immediately upon the creation of any new wholly owned Restricted Subsidiary,
such Restricted Subsidiary shall become a signatory to an Unlimited Guaranty of
the Obligations delivered to the Administrative Agent, (iii) the Borrower
immediately delivers all shares of Capital Stock of the new wholly owned
Restricted Subsidiary to the Administrative Agent together with stock powers
executed in blank, and (iv) the Borrower or any Restricted Subsidiary of the
Borrower owning any portion of the Capital Stock of any such new wholly owned
Restricted Subsidiary executes and delivers to the Administrative Agent a pledge
agreement pledging all such Capital Stock to secure the Obligations in form
substantially similar to the pledge agreement executed by the Borrower in
connection with this Agreement, the Borrower may create a new wholly owned
Restricted Subsidiary of the Borrower. Nothing in this Section 8.05(d) shall
permit the Borrower or any Restricted Subsidiary of the Borrower to create any
Subsidiary that is not wholly owned.
In connection with any asset sale permitted by this Section 8.05 or
otherwise consented to by the Lenders in accordance with the terms of this
Agreement, the Administrative Agent is hereby authorized by each Lender to (i)
execute any and all releases deemed appropriate by it to release such assets of
the Parent, the Borrower and the Restricted Subsidiaries (including, without
limitation, Capital Stock owned by the Parent, the Borrower and the Restricted
Subsidiaries) constituting Collateral from all Liens and security interests
securing all or any portion of the Obligations, (ii) return to the Borrower any
such Collateral in the possession of the Administrative Agent, (iii) after the
permitted sale by any Restricted Subsidiary of all of its assets and Properties
(including without limitation, the sale of the microwave assets), release any
such Person who has executed an Unlimited Guaranty from the terms and conditions
of its Unlimited Guaranty and (iv) take such other action as the Administrative
Agent deems necessary or appropriate in connection with such transaction and in
furtherance of the effectuation thereof.
8.06. GUARANTIES; CONTINGENT LIABILITIES. The Borrower and the Parent
shall not, and shall not permit any Restricted Subsidiary to, at any time make
or issue any Guaranty, or assume, be obligated with respect to, or permit to be
outstanding any Contingent Liabilities, except pursuant to the Loan Papers.
8.07. RESTRICTED PAYMENTS. The Borrower and the Parent shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly declare,
make or pay any Restricted Payment; provided, however
(a) any Subsidiary of the Borrower or the Parent may declare,
make and pay Restricted Payments to the Borrower, the Parent or any
other wholly owned Restricted Subsidiary that has executed an Unlimited
Guaranty of the Obligations hereunder (or any Subsidiary of Mutual
Signal may declare, make and pay Restricted Payments to Mutual Signal);
(b) the Borrower may make or declare, make and pay Distributions,
or make loans and advances, in each case to the Parent, so long as:
(i) the Administrative Agent is notified in writing not
less than 5 Business Days or more than 10 Business Days prior to
such Distribution or loan or advance of
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(A) the amount of such Distribution, loan or advance, (B) the
date the amount of such Distribution, loan or advance will be
transferred into the Borrower Deposit Account, and (C) the date
the amount of such Distribution, loan or advance will be paid to
the Parent by transfer into the Parent Deposit Account,
(ii) the full amount of each such Distribution, loan or
advance is first deposited by the Borrower into the Borrower
Deposit Account, and
(iii) each such Distribution, loan or advance is made only
from the Borrower Deposit Account and transferred pursuant to the
instructions of the Parent;
(c) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, after five Business
Days prior notice to the Administrative Agent and the Lenders of the
amount of such payment and the date of payment thereof, the Parent may
make Distributions out of the Parent Deposit Account to
(i) make scheduled dividend payments on the Junior
Convertible and the Cumulative Convertible,
(ii) if the Total Leverage Ratio is less than or equal to
4.00 to 1.00 both before and after making any such Restricted
Payment, make scheduled dividend payments on the Junior
Exchangeable,
(iii) make Distributions or other Restricted Payments from
time to time over the term of this Agreement not to exceed an
aggregate amount at the time of such payment equal to the net
amount of cash distributions received by the Parent from
Unrestricted Subsidiaries and not used for other purposes, and
(iv) so long as (A) such Restricted Payment is made prior
to August 15, 2000 and (B) such Restricted Payment does not
exceed an amount in excess of the difference between (I) net
proceeds from the issuance of common Capital Stock of the Parent
minus (II) the amount of net proceeds from the issuance of common
Capital Stock of the Parent used to make Permitted Acquisitions
or Permitted Investments, or other acquisitions and investments
permitted by this Agreement, the Parent may repurchase up to 35%
of its Junior Exchangeable in accordance with the terms of the
Junior Exchangeable Documentation;
(d) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, the Borrower and the
Parent may make annual consulting fee payments to the Persons and in
such amounts as set forth on Schedule 8.07 hereto;
(e) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, the Borrower and the
Parent may make payments to Unrestricted Subsidiaries in connection with
such transactions and in such amounts as set forth on Schedule 8.16
hereto;
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(f) the Borrower, the Parent and the Restricted Subsidiaries may
make Investments permitted by Sections 8.04(i), (j), (l), (m) and (p)
hereof;
(g) Mutual Signal may make pro rata Distributions to its
shareholders;
(h) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, the Borrower, the
Parent or any Restricted Subsidiary may make scheduled interest payments
on Debt for Borrowed Money permitted to be incurred under Sections
8.02(c), (d), (f) and (g) hereof;
(i) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, the Parent may make
payment in kind payments on (i) Preferred Stock issued in accordance
with the provisions of Section 8.02(f)(i) hereof and (ii) any of the
Existing Financing;
(j) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, (i) any Restricted
Subsidiary may make principal payments on Debt for Borrowed Money owed
to the Borrower that is permitted to be incurred under Section 8.02(c)
hereof and (ii) the Borrower may make principal payments on Debt for
Borrowed Money that is permitted to be incurred under Section 8.02(g)
hereof; and
(k) so long as there exists no Default or Event of Default both
before and after giving effect to any such payment, (i) after October
2000 the Borrower or the Parent may repurchase the Senior Notes pursuant
to the call provision set forth in the Senior Notes Documentation,
provided that the purchase price in the aggregate for all such Senior
Notes shall not exceed $1,000,000, (ii) the Borrower, the Parent or any
Restricted Subsidiary may repurchase its Capital Stock from any
terminated employee of such entity, in the aggregate for all such
repurchases for all such entities not to exceed $1,000,000 for each
fiscal year, and (iii) the Parent may pay cash dividends or
Distributions in lieu of the issuance of fractional shares, provided
that all such cash paid in lieu of fractional shares shall not exceed in
the aggregate $1,000,000 over the term of this Agreement.
8.08. AFFILIATE TRANSACTIONS. The Borrower and the Parent shall not, and
shall not permit any Restricted Subsidiary to, at any time engage in any
transaction with an Affiliate, nor make an assignment or other transfer of any
of its assets or Properties to any Affiliate, on terms materially less
advantageous to the Parent, the Borrower or any such Restricted Subsidiary than
would be the case if such transaction had been effected with a non-Affiliate,
except those transactions described on Schedule 8.08 hereof and to the extent
applicable, Schedule 8.16 hereof.
8.09. COMPLIANCE WITH ERISA. The Borrower and the Parent shall not, and
shall not permit any of their Subsidiaries to, directly or indirectly, or permit
any member of its Controlled Group to directly or indirectly, (a) terminate any
Plan so as to result in any material (in the opinion of the Majority Lenders)
liability to the Borrower or any member of its Controlled Group, (b) permit to
exist any ERISA Event, or any other event or condition which presents the risk
of liability of the Borrower or any member of its Controlled Group, (c) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan so as to result in any liability to the
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Borrower or any member of its Controlled Group, (d) enter into any new Plan or
modify any existing Plan so as to increase its obligations thereunder except in
the ordinary course of business consistent with past practice which could result
in any liability to the Borrower or the Parent, or any member of their
Controlled Group, or (e) permit the present value of all benefit liabilities, as
defined in Title IV of ERISA, under each Plan of the Borrower or the Parent, or
any member of their Controlled Group (using the actuarial assumptions utilized
by the PBGC upon termination of a plan) to exceed the fair market value of Plan
assets allocable to such benefits all determined as of the most recent valuation
date for each such Plan.
8.10. CAPITAL STOCK. The Borrower and the Parent shall not, and shall
not permit any Restricted Subsidiary to (a) make or permit any transfer,
assignment, distribution, mortgage, pledge or gift of any shares of Pledged
Stock, except (i) to the Borrower or another wholly owned direct or indirect
Restricted Subsidiary of the Borrower that has executed an Unlimited Guaranty of
the Obligations, and (ii) for asset sales permitted by Section 8.05(a) hereof,
and (b) issue any Capital Stock other than common Capital Stock issued by the
Parent, Preferred Stock of the Parent in accordance with the terms of Section
8.02(f) hereof, and payments in kind described in Section 8.07(i) hereof.
8.11. SALE AND LEASEBACK. The Borrower and the Parent shall not, and
shall not permit any Restricted Subsidiary to, enter into any arrangement
whereby it sells or transfers any of its assets, and thereafter rents or leases
such assets.
8.12. SALE OR DISCOUNT OF RECEIVABLES. The Borrower and the Parent shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly
sell, with or without recourse, for discount or otherwise, any notes or accounts
receivable, provided that, so long as there exists no Default or Event of
Default both before and after giving effect to each such sale, the Borrower or
the Parent may sell accounts receivable on a non recourse basis and on other
terms acceptable to the Administrative Agent, in an aggregate amount not to
exceed $100,000,000 in accounts sold and outstanding at any one time.
8.13. LIMITATION ON RESTRICTIVE AGREEMENTS. Except those written
agreements entered into in connection with the Existing Financing Documentation
or other Debt in effect on the Closing Date, the Borrower and the Parent shall
not, and shall not permit any Restricted Subsidiary to, enter into any
indenture, agreement, instrument, financing document or other arrangement which,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or imposes materially adverse conditions upon: (a) the
incurrence of indebtedness, (b) the granting of Liens, (c) the making or
granting of Guarantees, (d) the payment of dividends or Distributions, (e) the
purchase, redemption or retirement of any Capital Stock of the Parent, the
Borrower or any Subsidiary of the Parent and/or the Borrower, (f) the making of
loans or advances, (g) transfers or sales of Property or assets (including
Capital Stock) by the Borrower, the Parent or any of the Restricted
Subsidiaries, (h) the making of Investments, (i) any change of control or
management, (j) the making of changes or amendments to this Agreement or any
other Loan Paper, or (k) the acceptance of a waiver or consent with respect to
any term or provision of this Agreement or any other Loan Paper, provided that,
notwithstanding the foregoing, in connection with (i) any Preferred Stock
issuance or debt issuance in accordance with the terms of Section 8.02(f)(i)
hereof and any new capital lease in connection with Section 8.02(g) hereof, the
Parent may agree to restrictive provisions so long as such provisions are
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no more restrictive than the provisions in this agreement and such provisions
shall not in any case restrict, limit or prohibit the Parent, the Borrower or
any Restricted Subsidiary from (A) granting the Administrative Agent and the
Lenders any Lien to secure the Obligations hereunder (except Liens on assets
subject to Permitted Liens and Liens permitted under Section 8.03(b) hereof),
(B) guaranteeing any portion of the Obligations, (C) amending any provision of
this Agreement or any Loan Paper or (D) accepting any waiver or consent with
respect to any provision of this Amendment or the Loan Papers and (ii) any
Subordinated Indebtedness issuance in accordance with the terms of Section
8.02(f)(ii) hereof, the Parent may agree to restrictive provisions so long as
such provisions are no more restrictive than the provisions in the Subordinated
Notes Documentation and such provisions shall not in any case restrict, limit or
prohibit the Parent, the Borrower or any Restricted Subsidiary from (A) granting
the Administrative Agent and the Lenders any Lien to secure the Obligations
hereunder (except Liens on assets subject to Permitted Liens and Liens permitted
under Section 8.03(b) hereof), (B) guaranteeing any portion of the Obligations,
(C) amending any provision of this Agreement or any Loan Paper or (D) accepting
any waiver or consent with respect to any provision of this Amendment or the
Loan Papers.
8.14. AMENDMENT OF MATERIAL AGREEMENTS. The Borrower and the Parent
shall not, and shall not permit any Restricted Subsidiary to, amend, waive or
consent to any deviation from any provision of any documentation or agreements
of the (i) Existing Financing Documentation, (ii) articles of incorporation of
the Parent, the Borrower and the Restricted Subsidiaries, and (iii) by laws and
other organizational documents (other than the Articles of Incorporation) in any
manner that is both material and adverse to the interests of the Lenders.
Notwithstanding the foregoing, the Parent is permitted to amend its Articles of
Incorporation to increase the outstanding shares of common or preferred Capital
Stock or to effect a common Capital Stock split.
8.15. NAME CHANGES, CHANGES AFFECTING PLEDGED STOCK. The Borrower and
the Parent shall not, and shall not permit any Subsidiary of the Borrower or the
Parent to, change its name. The Borrower and the Parent shall not, and shall not
permit any Subsidiary of the Borrower or the Parent to, take any action or make
any change in its organization or otherwise that would in any manner hinder or
impair the Lien of the Lenders on the Pledged Stock.
8.16. UNRESTRICTED SUBSIDIARIES AND MUTUAL SIGNAL. Except as
specifically permitted by the terms of this Agreement or listed on Schedule 8.16
hereto, the Borrower and the Parent shall not, and shall not permit any
Restricted Subsidiary to, contribute any equity, make any loan, advance or other
investment in, or otherwise conduct any business with, any Unrestricted
Subsidiary and/or Mutual Signal.
8.17. LIMITATION ON IRU AGREEMENTS. Except as set forth on Schedule 8.16
hereto, the Borrower and the Parent shall not, and shall not permit any
Restricted Subsidiary to, enter into an IRU Agreement granting an IRU to any
Person other than to the Parent, the Borrower or any Restricted Subsidiary,
provided that the Parent, the Borrower or any Restricted Subsidiary may enter
into an IRU Agreement granting an IRU to any Person (other than the Borrower,
the Parent or any Restricted Subsidiary) so long as, in each case (a) there
exists no Default or Event of Default at the time such IRU Agreement is made,
(b) such IRU Agreement would not result in the Parent, the Borrower and the
Restricted Subsidiaries having the cumulative indefeasible right to use the
telecommunications capacity on less than 12 Backbone Fibers, (c) under no
circumstances shall the Parent, the Borrower
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or any Restricted Subsidiary grant an IRU on any "lit" fiber, and (d) the Board
of Directors has determined in good faith that the disposition of the fiber
capacity involved in such IRU Agreement would not cause a shortage of fiber
capacity to the Parent, the Borrower or any Restricted Subsidiary which would
interfere with (i) the Parent's, the Borrower's or any Restricted Subsidiary's
ability to continue providing telecommunications services at the then current
level; or (ii) the Parent's, the Borrower's or any Restricted Subsidiary's
business plan.
8.18. LIMITATION ON UNRESTRICTED SUBSIDIARIES. The Borrower and the
Parent shall not, and shall not permit any Restricted Subsidiary to, permit the
aggregate revenues of the Unrestricted Subsidiaries to exceed 30% of the
consolidated revenues of the Parent, the Borrower and all of the Subsidiaries of
the Parent and the Borrower.
ARTICLE IX. EVENTS OF DEFAULT
9.01. EVENTS OF DEFAULT. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Borrower shall fail to pay any (i) principal payable under any
Loan Paper on the date due; or (ii) any interest, fees or other amounts payable
within three days of the date due;
(b) Any representation or warranty made or deemed made by any Obligor
(or any of its officers or representatives) under or in connection with any Loan
Paper shall prove to have been incorrect or misleading in any material respect
when made or deemed made;
(c) The Borrower shall fail to perform or observe any term or covenant
contained in Section 7.05 hereof or in Article VIII hereof;
(d) Any Obligor shall fail to perform or observe any other term or
covenant contained in this Agreement or any other Loan Paper, other than those
described in Sections 9.01(a), (b) and (c) above, and such failure shall not be
remedied within thirty days following the earlier of the Borrower's knowledge of
such failure or notice from any Lender of the occurrence of such failure;
(e) Any of the following shall occur: (i) Any Loan Paper or material
provision thereof shall, for any reason, not be valid and binding on the Obligor
signatory thereto, or not be in full force and effect, or shall be declared to
be null and void; or (ii) the validity or enforceability of any Loan Paper shall
be contested by any Obligor, any Unrestricted Subsidiary or any Affiliate of the
Borrower and its Subsidiaries; or (iii) any Obligor shall deny in writing that
it has any or further liability or obligation under its respective Loan Papers;
or (iv) any default or breach under any provision of any Loan Papers shall
continue after the applicable grace period, if any, specified in such Loan
Paper;
(f) Any of the following shall occur: (i) the Parent, the Borrower or
any of their Subsidiaries shall make an assignment for the benefit of creditors
or be unable to pay its debts generally as they become due; (ii) the Parent, the
Borrower or any of their Subsidiaries shall petition or apply to any Tribunal
for the appointment of a trustee, receiver, or liquidator of it, or of any
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substantial part of its assets, or shall commence any proceedings relating to
the Parent, the Borrower or any of their Subsidiaries under any Debtor Relief
Laws; (iii) any such petition or application shall be filed, or any such
proceedings shall be commenced, against the Parent, the Borrower or any of their
Subsidiaries, or an order, judgment or decree shall be entered appointing any
such trustee, receiver, or liquidator, or approving the petition in any such
proceedings, and such petition or application shall be consented to or
uncontested by the Parent, the Borrower or such Subsidiary, or if contested by
the Parent, the Borrower or such Subsidiary, shall not be dismissed within 60
days following the filing of such petition or application; (iv) any final order,
judgment, or decree shall be entered in any proceedings against the Parent, the
Borrower or any of their Subsidiaries decreeing its dissolution; or (v) any
final order, judgment, or decree shall be entered in any proceedings against the
Parent, the Borrower or any of their Subsidiaries decreeing its split-up which
requires the divestiture of a substantial part of its assets;
(g) Any of the following shall occur: (i) The Borrower, the Parent or
any Subsidiary of the Borrower or the Parent shall fail to pay any Debt (other
than Debt under the Loan Papers) in an aggregate amount of $1,000,000 or more
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt; or (ii) the Borrower, the Parent or any Subsidiary of the Borrower or the
Parent shall fail to perform or observe any term or covenant contained in any
agreement or instrument relating to any such Debt, when required to be performed
or observed, and such failure shall continue after the applicable grace period,
if any, specified in such agreement or instrument, and can result in
acceleration of the maturity of such Debt; or (iii) any such Debt shall be
declared to be due and payable, or required to be prepaid, mandatorily redeemed
or repurchased (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof; or (iv) there shall exist a breach by any the
Borrower, the Parent or any of their Subsidiaries under one or more material
contracts the effect of which could reasonably be expected to cause a Material
Adverse Change;
(h) Any Obligor shall have any final judgment(s) outstanding against it,
and such judgment(s) shall remain unstayed, in effect, and unpaid for the period
of time after which the judgment holder may cause the creation of Liens against
or seizure of any of its Property;
(i) Any of the following shall have occurred: (i) Any ERISA Event shall
have occurred with respect to a Plan of the Borrower or the Parent or any
Subsidiary of the Borrower or the Parent, and the sum of the Insufficiency of
such Plan and liabilities relating thereto is equal to or greater than
$1,000,000 or (ii) the Borrower, the Parent, the Subsidiaries of the Borrower
and the Parent or any ERISA Affiliate of any of them shall have committed a
failure described in Section 302(f)(l) of ERISA, and the amount determined under
Section 302(f)(3) of ERISA is equal to or greater than $1,000,000;
(j) The Borrower or the Parent, or any ERISA Affiliate of the Borrower
or the Parent shall have been notified by the sponsor of a Multiemployer Plan
that (A) it has incurred Withdrawal Liability to such Plan in an amount that
exceeds $1,000,000 or requires payments exceeding $1,000,000 per annum, or (B)
such Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if as a result thereof the aggregate annual contributions to
all Multiemployer Plans in reorganization or being terminated is increased over
the amounts contributed to such Plans for the preceding Plan year by an amount
exceeding $1,000,000;
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(k) Any of the Borrower, the Parent or any of their Subsidiaries shall
be required under any Environmental Law (i) to implement any remedial,
neutralization, or stabilization process or program, the cost of which could
reasonably be expected to cause a Material Adverse Change, or (ii) to pay any
penalty, fine, or damages in an aggregate amount which could reasonably be
expected to cause a Material Adverse Change;
(l) Any of the following shall have occurred: (i) Any property or assets
(whether leased or owned), or the operations conducted thereon by any of the
Borrower, the Parent or any of their Subsidiaries, or any current or prior owner
or operator thereof (in the case of real Property), shall violate or have
violated any applicable Environmental Law, if such violation could reasonably be
expected to cause a Material Adverse Change; or (ii) the Borrower or the Parent
or such Subsidiary shall not obtain or maintain any License required to be
obtained or filed under any Environmental Law in connection with the use of such
Property and assets, including without limitation past or present treatment,
storage, disposal, or release of Hazardous Materials into the environment, if
the failure to obtain or maintain the same could reasonably be expected to cause
a Material Adverse Change;
(m) Any of the following shall have occurred:
(i) Any Loan Paper shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
Lien in the Collateral purported to be covered thereby (except as
permitted by the terms of this Agreement or consented to by the
Lenders); or
(ii) Less than 100% of the Capital Stock of the Borrower or any
Subsidiary of the Parent or the Borrower shall be subject to a first
priority perfected pledge to the Administrative Agent to secure the
Obligations, except the Excluded Stock;
(n) Any of the following shall have occurred: (i) A final non-appealable
order is issued by any Tribunal, including, but not limited to, the FCC, any
applicable PUC, or the United States Justice Department, requiring any Obligor
to divest a substantial portion of its assets pursuant to any antitrust,
restraint of trade, unfair competition, industry regulation, or similar Laws, or
(ii) any Tribunal shall condemn, seize, or otherwise appropriate, or take
custody or control of all or any substantial portion of the assets of the
Parent, the Borrower or any of their Subsidiaries;
(o) Any of the following shall have occurred if the effect thereof could
be reasonably expected to cause a Material Adverse Change; (i) Any License
whether presently existing or hereafter granted to or obtained by the Borrower,
the Parent or any of their Subsidiaries shall expire without renewal or be
suspended or revoked, or (ii) the Parent, the Borrower or any of their
Subsidiaries shall become subject to any injunction or other order affecting or
which may affect the Parent's, the Borrower's or any of their Subsidiary's
present or proposed operations under any such License;
(p) Any civil action, suit or proceeding shall be commenced against the
Borrower, the Parent or any of their Subsidiaries under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970)("RICO") and such suit shall be adversely
determined by a court of applicable jurisdiction, and which is either
non-appealable or which the Parent, the Borrower or such Subsidiary has elected
not to appeal; or any criminal action
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or proceeding shall be commenced against the Borrower, the Parent or any of
their Subsidiaries under any federal or state racketeering statute (including,
without limitation, RICO);
(q) There shall occur a Change of Control, provided that, if the Loans
are rated at least BBB or above, or any equivalent thereto, by Standard & Poor's
Ratings Group, a Division of McGraw-Hill, Inc. or Moody's Investors Service,
Inc. on the 30th day following the event that otherwise would constitute a
Change of Control (the "Change of Control Determination Date"), there shall
exist no Event of Default under this Section 9.01(q), provided, however, that to
the extent there is a "rating watch" with respect to the Loans or other rating
agency review on such 30th day, then the Change of Control Determination Date
shall be the first Business Day thereafter on which the Loans are not subject to
a "rating watch" or other rating agency review rating by either Standard &
Poor's Ratings Group, a Division of McGraw-Hill, Inc. or Moody's Investors
Service, Inc.;
(r) Any Litigation commenced against the Borrower, the Parent or any of
their Subsidiaries is adversely determined by a court of applicable
jurisdiction, which such Litigation is either non-appealable or which such
Obligor has elected not to appeal, and in either case, is reasonably expected to
cause a Material Adverse Change;
(s) The Parent, the Borrower or any Subsidiary of the Borrower or the
Parent shall fail to comply in any respect with the Communications Act, or any
rule or regulation promulgated by the FCC or any applicable PUC, and such
failure could reasonably be expected to cause a Material Adverse Change; or any
License or authorization constituting authorizations, permits or licenses of the
Parent, the Borrower or any of their Subsidiaries material to the operation of
the business of the Parent, the Borrower and any of their Subsidiaries, has
expired or shall expire without having been renewed or shall be canceled or
impaired, and such expiration, cancellation or impairment could reasonably be
expected to cause a Material Adverse Change;
(t) The Parent, the Borrower or any of their Subsidiaries shall fail to
operate its business for any period of time which, in the aggregate, could
reasonably be expected to cause a Material Adverse Change;
(u) Any Substantial Portion shall not, for any reason (including,
without limitation, loss of FCC License, fiber network or otherwise) be
operating for a period in excess of 30 days. For purposes of this Section
9.01(u), "Substantial Portion" means any portion of the telecommunications
system of the Parent, the Borrower and the Restricted Subsidiaries that has
generated, for the most recently completed twelve month period, in excess of
five percent of the Operating Cash Flow;
(v) Any of the Parent, the Borrower or any of their Subsidiaries shall
fail to be Year 2000 Compliant;
(w) Any breach, default under, redemption, repurchase or defeasance, or
other comparable event shall occur with respect to any of the Subordinated
Notes; or
(x) Any breach or default under any provision of, or redemption,
repurchase or defeasance with respect to, or other comparable event as a result
of any change of control provision shall occur with respect to, any of the
Junior Exchangeable, Junior Convertible or the Cumulative Convertible,
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provided that, if the Loans are rated at least BBB or above, or any equivalent
thereto, by Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc. or
Moody's Investors Service, Inc. on the 30th day following the event that
otherwise would constitute a Change of Control (the "Change of Control
Determination Date"), there shall exist no Event of Default under this Section
9.01(x), provided, however, that to the extent there is a "rating watch" with
respect to the Loans or other rating agency review on such 30th day, then the
Change of Control Determination Date shall be the first Business Day thereafter
on which the Loans are not subject to a "rating watch" or other rating agency
review rating by either Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc. or Moody's Investors Service, Inc.
9.02. REMEDIES UPON DEFAULT. If an Event of Default described in Section
9.01(f) shall occur, the aggregate unpaid principal balance of and accrued
interest on all Advances shall, to the extent permitted by Applicable Law,
thereupon become due and payable concurrently therewith, without any action by
Administrative Agent or any Lender, and without diligence, presentment, demand,
protest, notice of protest or intent to accelerate, or notice of any other kind,
all of which are hereby expressly waived. Subject to the foregoing sentence, if
any Event of Default shall occur and be continuing, Administrative Agent may at
its election, do any one or more of the following:
(a) Declare the entire unpaid balance of all Obligations immediately due
and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to accelerate, or
notice of any other kind (except notices specifically provided for under Section
9.01 hereof), all of which are hereby expressly waived (except to the extent
waiver of the foregoing is not permitted by Applicable Law);
(b) Terminate either the Revolver Commitment or, if the Special Purpose
Loan is a revolving loan as determined in accordance with the terms of Section
2.17 hereof, the Special Purpose Commitment, or terminate both of the
Commitments;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Demand (and the Borrower shall pay to Administrative Agent)
immediately upon demand and in immediately available funds, the amount equal to
the aggregate amount of the Letters of Credit then outstanding, irrespective of
whether such Letters of Credit have been drawn upon, all as set forth and in
accordance with the terms of provisions of Article III hereof. The
Administrative Agent shall promptly advise the Borrower of any such declaration
or demand but failure to do so shall not impair the effect of such declaration
or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law,
including but not limited to the UCC, at equity, or otherwise.
9.03. CUMULATIVE RIGHTS. All Rights available to Administrative Agent
and Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Agent or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers.
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9.04. WAIVERS. The acceptance by Administrative Agent or any Lender at
any time and from time to time of partial payment of any amount owing under any
Loan Papers shall not be deemed to be a waiver of any Default or Event of
Default then existing. No waiver by Administrative Agent or any Lender of any
Default or Event of Default shall be deemed to be a waiver of any Default or
Event of Default other than such Default or Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any Right under the
Loan Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
under the Loan Papers or otherwise.
9.05. PERFORMANCE BY ADMINISTRATIVE AGENT OR ANY LENDER. Should any
covenant of any Obligor fail to be performed in accordance with the terms of the
Loan Papers, Administrative Agent may, at its option, perform or attempt to
perform such covenant on behalf of such Obligor. Notwithstanding the foregoing,
it is expressly understood that neither Administrative Agent nor any Lender
assumes, and shall not ever have, except by express written consent of
Administrative Agent or such Lender, any liability or responsibility for the
performance of any duties or covenants of any Obligor.
9.06. EXPENDITURES. The Borrower shall reimburse Administrative Agent
and each Lender for any reasonable sums spent by it in connection with the
exercise of any Right under Section 9.05 hereof. Such sums shall bear interest
at the lesser of (a) the Base Rate (whether or not in effect), plus 2.00% per
annum and (b) the Highest Lawful Rate, from 15 days after the date any Lender
makes demand to the Borrower for reimbursement of such amount until the date of
repayment by the Borrower.
9.07. CONTROL. None of the covenants or other provisions contained in
this Agreement shall, or shall be deemed to, give Administrative Agent or any
Lender any Rights to exercise control over the affairs and/or management of any
Obligor, the power of Administrative Agent and each Lender being limited to the
Rights to exercise the remedies provided in this Article; provided, however,
that if Administrative Agent or any Lender becomes the owner of any partnership,
stock or other equity interest in any Person, whether through foreclosure or
otherwise, it shall be entitled to exercise such legal Rights as it may have by
being an owner of such stock or other equity interest in such Person.
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes Administrative Agent to take such action as Administrative Agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to the Administrative Agent by the terms of the Loan
Papers, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Papers (including without limitation enforcement or collection of the Notes),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 11.01 hereof), and
such instructions shall be binding upon all Lenders; provided, however, that
Administrative Agent shall not be required to take any action which
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exposes Administrative Agent to personal liability or which is contrary to any
Loan Papers or Applicable Law. Administrative Agent agrees to give to each
Lender notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement, and to distribute to each applicable Lender in like funds all
amounts delivered to Administrative Agent by the Borrower for the individual
account of any Lender pro rata in accordance with the Applicable Specified
Percentage, as set forth in this Agreement. Functions of the Administrative
Agent are administerial in nature and in no event shall the Administrative Agent
have a fiduciary or trustee relationship in respect of any Lender by reason of
this Agreement or any other Loan Paper.
10.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither Administrative
Agent, nor any of its directors, officers, agents, employees, or representatives
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any other Loan Paper, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent (a) may treat the payee of any
Note as the holder thereof until Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Administrative Agent; (b) may consult with legal counsel (including counsel
for the Parent, the Borrower or any of the Restricted Subsidiaries), independent
public accountants, and other experts selected by it, and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants, or experts; (c) makes no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, warranties, or representations made in or in connection with
this Agreement or any other Loan Papers; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants, or conditions of this Agreement or any other Loan Papers on the part
of the Parent, the Borrower or the Restricted Subsidiaries or to inspect the
Property (including the books and records) of the Parent, the Borrower or their
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of this
Agreement, any other Loan Papers, or any other instrument or document furnished
pursuant hereto; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Papers by acting upon any notice, consent,
certificate, or other instrument or writing believed by it to be genuine and
signed or sent by the proper party or parties.
10.03. NATIONSBANK, N.A. AND AFFILIATES. With respect to its Revolver
Commitment, Special Purpose Commitment, its Advances, and any Loan Papers,
NationsBank, N.A. has the same Rights under this Agreement as any other Lender
and may exercise the same as though it were not Administrative Agent.
NationsBank, N.A. and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, any Obligor, any Affiliate thereof, and any Person who may do business
therewith, all as if NationsBank, N.A. were not Administrative Agent and without
any duty to account therefor to any Lender.
10.04. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 5.01(j),
Section 7.01 and Section 7.02 hereof and such other 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 reliance upon Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Papers.
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10.05. INDEMNIFICATION BY LENDERS. Lenders shall indemnify
Administrative Agent, pro rata in accordance with each Lender's Total Specified
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Agent in any way relating to or arising out of
any Loan Papers or any action taken or omitted by Administrative Agent
thereunder, including any negligence of Administrative Agent; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements resulting from Administrative Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, Lenders shall reimburse
Administrative Agent, pro rata in accordance with each Lender's Total Specified
Percentage, promptly upon demand for any out-of-pocket expenses (including
reasonable attorneys' fees) incurred by Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment,
or enforcement (whether through negotiation, legal proceedings or otherwise) of,
or legal and other advice in respect of rights or responsibilities under, the
Loan Papers. The indemnity provided in this Section 10.05 shall survive the
termination of this Agreement.
10.06. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign
at any time by giving written notice thereof to Lenders and the Borrower, and
may be removed at any time with or without cause by the action of all Lenders
(other than Administrative Agent, if it is a Lender). Upon any such resignation
or removal, Majority Lenders shall have the right to appoint a successor
Administrative Agent with the prior written consent of the Borrower (which shall
not be unreasonably withheld), provided that, if there exists an Event of
Default that is continuing, no consent of the Borrower shall be required. If no
successor Administrative Agent shall have been so appointed and shall have
accepted such appointment within thirty days after the retiring Administrative
Agent's giving of notice of resignation, then the retiring Administrative Agent
may, on behalf of Lenders, appoint a successor Administrative Agent, which shall
be a commercial bank organized under the Laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the Rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan Papers,
provided that if the retiring or removed Administrative Agent is unable to
appoint a successor Administrative Agent, Administrative Agent shall, after the
expiration of a sixty day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
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ARTICLE XI. MISCELLANEOUS
11.01. AMENDMENTS AND WAIVERS. Except as set forth in Section 2.17
hereof, no amendment or waiver of any provision of this Agreement or any other
Loan Papers, nor consent to any departure by the Borrower or any Obligor
therefrom, shall be effective unless the same shall be in writing and signed by
the Borrower and the Administrative Agent with the consent of the Majority
Lenders, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver, or consent shall (and the result of action
or failure to take action shall not) unless in writing and signed by all of
Lenders and Administrative Agent, (a) increase the Revolver Commitment or the
Special Purpose Commitment (except in accordance with the terms of Section 2.17
hereof), (b) reduce any principal, interest, fees, or other amounts payable
hereunder, or waive or result in the waiver of any Event of Default under
Section 9.01(a) hereof, (c) postpone any date fixed for any payment of
principal, interest, fees, or other amounts payable hereunder, (d) release or
impair any Collateral or guaranties securing any Obligor's obligations
hereunder, other than releases contemplated hereby and by the other Loan Papers,
(e) change the meaning of "Total Specified Percentage", "Revolver Specified
Percentage", "Term Loan Specified Percentage" or "Special Purpose Specified
Percentage" (except in accordance with the terms of Section 2.17 hereof), or the
number of Lenders required to take any action hereunder, change the definitions
of "Commitment", "Revolver Commitment", "Special Purpose Commitment" (except in
accordance with the terms of Section 2.17 hereof), "Maturity Date", "Majority
Lenders", or "Letter of Credit Commitment", or (f) amend this Section 11.01 or
Section 11.03 hereof. No amendment, waiver, or consent shall affect the Rights
or duties of Administrative Agent under any Loan Papers, unless it is in writing
and signed by Administrative Agent in addition to the requisite number of
Lenders.
11.02. NOTICES.
(a) MANNER OF DELIVERY. All notices communications and other materials to
be given or delivered under the Loan Papers shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or the Borrower has acted in reliance on such
telephonic notice.
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(b) ADDRESSES. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
(i) If to the Borrower, the Parent or any Restricted Subsidiary:
IXC Communications Services, Inc.
1122 Capital of Texas Highway South
Austin, Texas 78746
Telephone No.: (512) 427-3713
Telecopier No.: (512) 328-0239
Attention: Mr. James F. Guthrie
Executive Vice President and
Chief Financial Officer
With copies to (which is not required for effective delivery as
set forth above):
Riordan & McKinzie
A Professional Corporation
695 Town Center Drive, Suite 1500
Costa Mesa, CA 92626
Telephone No.: (714) 433-2900
Facsimile No.: (714) 549-3244
Attention: Michael P. Whalen
(ii) If to Administrative Agent:
NationsBank, N.A.
NationsBank Plaza
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-0988
Telecopier No.: (214) 508-9390
Attention: Ms. Roselyn M. Drake
Vice President
With a copy to (which is not required for effective delivery as
set forth above):
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Telephone No.: (214) 698-3814
Telecopier No.: (214) 744-0231
Attention: Melissa Ruman Stewart
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(iii) If to any Lender, to its address shown opposite its signature block
on the signature pages hereto, or on any Assignment and Acceptance, or in any
other notice to the Borrower and the Administrative Agent,
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
(c) EFFECTIVENESS. Each notice, communication and any material to be
given or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number, (iii) if sent by hand
delivery or overnight courier, when left at the address of the addressee
addressed as above provided, and (iv) if given by telephone, when communicated
to the individual or any member of the department specified as the individual or
department to whose attention notices, communications and materials are to be
given or delivered except that notices of a change of address, telecopier or
telephone number or individual or department to whose attention notices,
communications and materials are to be given or delivered shall not be effective
until received; provided, however, that notices to Administrative Agent pursuant
to Article II shall be effective when received. The Borrower agrees that
Administrative Agent shall have no duty or obligation to verify or otherwise
confirm telephonic notices given pursuant to Article II, and agrees to indemnify
and hold harmless Administrative Agent and Lenders for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, and expenses resulting, directly or indirectly, from acting upon any such
notice.
11.03. PARTIES IN INTEREST. All covenants and agreements contained in
this Agreement and all other Loan Papers shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto. Each Lender may
from time to time assign or transfer its interests hereunder pursuant to Section
11.04 hereof. The Borrower may not assign or transfer its Rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender.
11.04. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender (an "Assignor") may assign its Rights and obligations as
a Lender under the Loan Papers to one or more transferees pursuant to an
Assignment and Acceptance, so long as (i) each assignment shall be of a
constant, and not a varying percentage of all Rights and obligations thereunder,
provided that any assignment may assign a non-pro rata portion of any of the
Revolver Loan, Term Loan or Special Purpose Loan, (ii) each Assignor shall
obtain in each case the prior written consent of Administrative Agent and the
Borrower, in each case such consent of the Borrower and the Administrative Agent
not to be unreasonably withheld or delayed, provided that (A) in the event there
exists an Event of Default that is continuing, no consent of the Borrower shall
be required to make an assignment and (B) no consent of the Borrower shall be
required for any Lender to assign all or any portion of its Loan to an Affiliate
or another existing Lender, (iii) each Assignor shall in each case pay a $3,500
processing fee to Administrative Agent, (iv) no such assignment is for an amount
less than $5,000,000 and in increments $1,000,000, provided that, if any such
assignment is to an existing Lender, such minimum assignment amounts shall not
be required and (v) if any such
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assignment is a partial assignment, no Lender shall hold less than $5,000,000
immediately after giving effect to any assignment. Assignments and other
transfers (except participations) with respect to each Lender's participation in
a given Letter of Credit may only be made with the prior written consent of the
Administrative Agent. Within five Business Days after Administrative Agent
receives notice of any such assignment, the Borrower shall execute and deliver
to Administrative Agent, in exchange for the Notes issued to Assignor, new Notes
to the order of such Assignor and its assignee in amounts equal to their
respective Applicable Specified Percentages of the Revolver Commitment and/or
the Special Purpose Commitment, and/or the outstanding amount of the Term Loan,
as applicable. Such new Notes shall be dated the effective date of the
assignment. It is specifically acknowledged and agreed that on and after the
effective date of each assignment, the assignee shall be a party hereto and
shall have the Rights and obligations of a Lender under the Loan Papers. It is
specifically agreed by all parties hereto that Lenders may have different
percentages for each of the Loans.
(b) Each Lender may sell participations to one or more Persons in all or
any of its Rights and obligations under the Loan Papers; provided, however, that
(i) such Lender's obligations under the Loan Papers shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 11.01(a), (b), (c) and (d) hereof, (v) Obligors, the Administrative
Agent, and other Lenders shall continue to deal solely and directly with such
Lender in connection with their respective Rights and obligations under the Loan
Papers and (vi) no such participation is for an amount less than $5,000,000.
(c) Any Lender may, in connection with any assignment or participation,
or proposed assignment or participation, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
the Parent, the Borrower and their Subsidiaries furnished to such Lender by or
on behalf of the Parent, the Borrower and their Subsidiaries.
(d) Notwithstanding any other provision set forth in this Agreement, (i)
any Lender may at any time create a security interest in all or any portion of
its Rights under this Agreement (including, without limitation, the Advances
owing to it and the Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System and (ii) no participant of any Lender may further assign or participate
any of its interest in the Loan Papers to any Person (except as may be required
by Law or a Tribunal having authority over such participant).
11.05. SHARING OF PAYMENTS. If, after and during the continuance of any
Event of Default, any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any Right of set-off, or otherwise) on
account of its Advances in excess of its pro rata share of payments made by the
Borrower in accordance with such Lender's Total Specified Percentage, such
Lender shall forthwith purchase participations in Advances made by the other
Lenders as shall be necessary to share the excess payment pro rata in accordance
with each Lender's Total Specified Percentage with each of them; provided,
however, that if any of such excess payment is thereafter recovered from the
purchasing Lender, its purchase from each Lender shall be rescinded and each
Lender shall repay the purchase price to the extent of such recovery together
with a pro rata share of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this
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Section 11.05 may, to the fullest extent permitted by Law, exercise all its
Rights of payment (including the Right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
11.06. RIGHT OF SET-OFF. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized (after prior written
noticed to the Administrative Agent) 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 indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower, the Parent or any of their Subsidiaries against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the other Loan Papers, whether or not Administrative Agent or any
Lender shall have made any demand under this Agreement or the other Loan Papers,
and even if such obligations are unmatured. Each Lender shall promptly notify
the Borrower after any such set-off and application, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The Rights of each Lender under this Section 11.06 are in addition
to other Rights (including, without limitation, other Rights of set-off) which
such Lender may have.
11.07. COSTS, EXPENSES, AND TAXES.
(a) Notwithstanding anything to the contrary in the Loan Papers, the
Borrower agrees to pay on demand (i) all costs and expenses of Administrative
Agent in connection with the preparation and negotiation of all Loan Papers,
including without limitation the reasonable fees and out-of-pocket expenses of
Special Counsel, FCC counsel, PUC counsel and local counsel, as appropriate,
(ii) all costs and expenses (including reasonable attorneys' fees and expenses)
of Administrative Agent in connection with any interpretation, grant and
perfection of any Lien, modification, amendment, waiver, release of any Loan
Papers, restructuring or work-out and (iii) all costs and expenses (including
reasonable attorneys' fees and expenses) of Administrative Agent and each Lender
in connection with any collection of any portion of the Obligations or the
enforcement of any Loan Papers during the continuance of an Event of Default.
(b) In addition, notwithstanding anything to the contrary in the Loan
Papers, the Borrower shall pay any and all stamp, debt, and other Taxes payable
or determined to be payable in connection with any payment hereunder (other than
Taxes on the overall net income of Administrative Agent or any Lender or
franchise Taxes or Taxes on capital or capital receipts of Administrative Agent
or any Lender), or the execution, delivery, or recordation of any Loan Papers,
and agrees to save Administrative Agent and each Lender harmless from and
against any and all liabilities with respect to, or resulting from any delay in
paying or omission to pay any Taxes in accordance with this Section 11.07,
including any penalty, interest, and expenses relating thereto. All payments by
the Borrower or any Restricted Subsidiary of the Borrower under any Loan Papers
shall be made free and clear of and without deduction for any present or future
Taxes (other than Taxes on the overall net income of Administrative Agent or any
Lender of any nature now or hereafter existing, levied, or withheld, or
franchise Taxes or Taxes on capital or capital receipts of Administrative Agent
or any Lender), including all interest, penalties, or similar liabilities
relating thereto. If the Borrower shall be required by Law to deduct or to
withhold any Taxes from or in respect of any amount payable hereunder (i) the
amount so payable shall be increased to the extent necessary so that, after
making all required deductions and withholdings (including Taxes on amounts
payable to Administrative Agent or any Lender pursuant to this sentence),
Administrative
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Agent or any Lender receives an amount equal to the sum it would have received
had no such deductions or withholdings been made, (ii) the Borrower shall make
such deductions or withholdings, and (iii) the Borrower shall pay the full
amount deducted or withheld to the relevant taxing authority in accordance with
Applicable Law. Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.07 shall survive the execution of this Agreement, termination of
the Commitment, repayment of the Obligations, satisfaction of each agreement
securing or assuring the Obligations and termination of this Agreement and each
other Loan Paper.
11.08. RATE PROVISION. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall any Obligor or any other Person be
obligated to pay any amount in excess of the Maximum Amount. If Administrative
Agent or any Lender ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Borrower or the other Person
entitled thereto. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, each Obligor,
Administrative Agent and each Lender shall, to the maximum extent permitted
under Applicable Laws, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of inter est throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to the Borrower
the amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 11.08 shall control every other provision of all agreements among the
parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
11.09. SEVERABILITY. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of such Loan Paper a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
11.10. EXCEPTIONS TO COVENANTS. No Obligor shall be deemed to be
permitted to take any action or to fail to take any action that is permitted as
an exception to any covenant in any Loan Papers, or that is within the
permissible limits of any covenant, if such action or omission would result in a
violation of any other covenant in any Loan Papers.
92
<PAGE> 98
11.11. COUNTERPARTS. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE
CONTRACTS MADE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER
JURISDICTION, THE BORROWER AGREES THAT THE FEDERAL COURTS OF TEXAS LOCATED IN
DALLAS, TEXAS, WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT
THAT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT,
CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE
OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
(B) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS
UPON IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL.
NOTHING IN THIS SECTION 11.12 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
11.13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
================================================================================
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
================================================================================
93
<PAGE> 99
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
THE BORROWER:
IXC COMMUNICATIONS SERVICES, INC.
/s/ James F. Guthrie
----------------------------------------
By: James F. Guthrie
Its: Executive Vice President and
Chief Financial Officer
94
<PAGE> 100
Agreed and Accepted:
THE PARENT:
IXC COMMUNICATIONS, INC.
/s/ James F. Guthrie
----------------------------------------
By: James F. Guthrie
Its: Executive Vice President and
Chief Financial Officer
95
<PAGE> 101
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A., as Administrative Agent
/s/ Roselyn Drake
------------------------------------------
By: Roselyn M. Drake
Its: Vice President
96
<PAGE> 102
CO-SYNDICATION AGENTS:
CREDIT SUISSE FIRST BOSTON,
as Co-Syndication Agent
/s/ Todd C. Morgan
----------------------------------------
By: Todd C. Morgan
------------------------------------
Its: Director
-----------------------------------
/s/ Judith E. Smith
----------------------------------------
By: Judith E. Smith
------------------------------------
Its: Director
-----------------------------------
97
<PAGE> 103
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Co-Syndication Agent
/s/ Stephen J. McGuiness
---------------------------------------
By: Stephen J. McGuiness
-----------------------------------
Its: Authorized Signatory
----------------------------------
98
<PAGE> 104
TD SECURITIES (USA), INC.,
as Co-Syndication Agent
/s/ Stuart I. Odell, Jr.
----------------------------------------
By: Stuart I. Odell, Jr.
------------------------------------
Its: Vice President
-----------------------------------
99
<PAGE> 105
EXPORT DEVELOPMENT CORPORATION,
as Co-Syndication Agent
/s/ Bruce Dunlop
----------------------------------------
By: Bruce Dunlop
------------------------------------
Its: Financial Services Manager
-----------------------------------
Telecom Team
-----------------------------------
/s/ Stephen Davies
----------------------------------------
By: Stephen Davies
------------------------------------
Its: Financial Services Manager
-----------------------------------
Telecom Team
-----------------------------------
100
<PAGE> 106
LENDERS:
NATIONSBANK, N.A., individually as a Lender
Address:
901 Main Street
64th Floor
Dallas, Texas 75202 /s/ Roselyn Drake
-------------------------------------------
By: Roselyn M. Drake
Its: Vice President
Attn.: Roselyn M. Drake
Telephone: (214) 508-0988
Telecopy: (214) 508-9390
Revolver Specified Percentage: 21.42857142857140%
Term Loan Specified Percentage: 21.42857142857140%
Total Specified Percentage: 21.42857142857140%
101
<PAGE> 107
EXPORT DEVELOPMENT CORPORATION,
as a Lender
Address:
151 O'Connor Street, 10th Floor
Ottawa, ON K1A 1K3
/s/ Bruce Dunlop
----------------------------------------
By: Bruce Dunlop
------------------------------------
Its: Financial Services Manager
-----------------------------------
Telecom Team
-----------------------------------
Attn: Bruce Dunlop
Telephone: (613) 598-3034
Telecopy: (613) 598-6858
/s/ Stephen J. Davies
----------------------------------------
By: Stephen J. Davies
------------------------------------
Its: Financial Services Manager
-----------------------------------
Information Technologies Group
-----------------------------------
Revolver Specified Percentage: 21.42857142857140%
Term Loan Specified Percentage: 21.42857142857140%
Total Specified Percentage: 21.42857142857140%
102
<PAGE> 108
CREDIT SUISSE FIRST BOSTON, as a Lender
Address:
11 Madison Avenue
New York, New York 10010
/s/ Todd C. Morgan
----------------------------------------
By: Todd C. Morgan
------------------------------------
Its: Director
-----------------------------------
Attn: Jeffrey Howe
Telephone: (212) 325-9102
Telecopy: (212) 325-6695
/s/ Judith E. Smith
----------------------------------------
By: Judith E. Smith
------------------------------------
Its: Director
-----------------------------------
Revolver Specified Percentage: 14.28571428571430%
Term Loan Specified Percentage: 14.28571428571430%
Total Specified Percentage: 14.28571428571430%
103
<PAGE> 109
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as a Lender
Address:
85 Broad Street, 14th Floor
New York, New York 10004
/s/ Stephen J. McGuiness
----------------------------------------
By: Stephen J. McGuiness
------------------------------------
Its: Authorized Signatory
-----------------------------------
Attn: Richard Katz
Telephone: (212) 902-4390
Telecopy: (212) 357-4451
Revolver Specified Percentage: 11.42857142857140%
Term Loan Specified Percentage: 11.42857142857140%
Total Specified Percentage: 11.42857142857140%
104
<PAGE> 110
TORONTO DOMINION (TEXAS), INC.,
as a Lender
Address:
909 Fannin Street, Suite 1700
Houston, Texas 77010
/s/ Jimmy Simien
----------------------------------------
By: Jimmy Simien
------------------------------------
Its: Vice President
-----------------------------------
Attn: Carol Brandt
Telephone: (713) 653-8204
Telecopy: (713) 951-9921
Revolver Specified Percentage: 11.42857142857140%
Term Loan Specified Percentage: 11.42857142857140%
Total Specified Percentage: 11.42857142857140%
105
<PAGE> 111
THE BANK OF NEW YORK, as a Lender
Address:
One Wall Street, 16th Floor
New York, New York 10286
/s/ Gerry Granovsky
----------------------------------------
By: Gerry Granovsky
------------------------------------
Its: Vice President
-----------------------------------
Attn: Gerry Grenovsky
Telephone: (212) 635-8615
Telecopy: (212) 635-8593
Revolver Specified Percentage: 7.14285714285714%
Term Loan Specified Percentage: 7.14285714285714%
Total Specified Percentage: 7.14285714285714%
106
<PAGE> 112
BANK OF MONTREAL, as a Lender
Address:
430 Park Avenue
New York, New York 10022
/s/ Ola B. Anderssen
----------------------------------------
By: Ola B. Anderssen
------------------------------------
Its: Director
-----------------------------------
Attn: Ola Anderssen
Telephone: (212) 605-1453
Telecopy: (212) 605-1648
Revolver Specified Percentage: 4.28571428571429%
Term Loan Specified Percentage: 4.28571428571429%
Total Specified Percentage: 4.28571428571429%
107
<PAGE> 113
BANK OF NOVA SCOTIA, as a Lender
Address:
One Liberty Plaza, 26th Floor
New York, New York 10006
/s/ Vincent I. Fitzgerald, Jr.
----------------------------------------
By: Vincent I. Fitzgerald, Jr.
------------------------------------
Its: Authorized Signatory
-----------------------------------
Attn: Steve Levy
Telephone: (212) 225-5039
Telecopy: (212) 225-5091
Revolver Specified Percentage: 4.28571428571429%
Term Loan Specified Percentage: 4.28571428571429%
Total Specified Percentage: 4.28571428571429%
108
<PAGE> 114
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., as a Lender
Address:
Two Ravinia Drive, Suite 1680
Atlanta, Georgia 30346
/s/ Carl S. Drake
----------------------------------------
By: Carl S. Drake
------------------------------------
Its: Vice President
-----------------------------------
Attn: Carl Drake
Telephone: (770) 390-1850
Telecopy: (770) 390-1851
/s/ Robert M. Biringer
----------------------------------------
By: Robert M. Biringer
------------------------------------
Its: Executive Vice President
-----------------------------------
Revolver Specified Percentage: 4.28571428571429%
Term Loan Specified Percentage: 4.28571428571429%
Total Specified Percentage: 4.28571428571429%
109
<PAGE> 115
EXHIBIT A
FORM OF REVOLVER PROMISSORY NOTE
$ Dallas, Texas , 1998
------------------------ ------------------
FOR VALUE RECEIVED, the undersigned, IXC Communications Services, Inc.,
a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order of
("Lender") MILLION AND NO/100 DOLLARS ($ ), or so much thereof as may be
advanced from time to time and remain outstanding, payable at such times, and in
such amounts, as are specified in the Credit Agreement (as defined below). The
books and records of Lender shall be prima facie evidence of all sums due
Lender.
Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date such Advance is made until such Advance is paid in full,
at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Administrative Agent (as defined in the Credit Agreement)
(for the account of Lender) at its principal banking house at NationsBank Plaza,
901 Main Street, Dallas, Texas 75202, or such other place as Administrative
Agent may direct, in immediately available funds.
This Note is one of the Notes evidencing Obligations under the Revolver
Loan referred to in, and is entitled to the benefits of, the Credit Agreement
dated as of October 27, 1998 among Borrower, NationsBank, N.A., as
Administrative Agent and a Lender and certain other Lenders (as from time to
time amended, modified or supplemented, the "Credit Agreement"). The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Borrower and each guarantor, surety and endorser waives demand,
presentment, notice of dishonor, protest and diligence in collecting sums due
hereunder; agrees that extensions and renewals without limit as to number,
acceptance of any number of partial payments, releases of any party liable
hereon, and releases or substitutions of collateral, before or after maturity,
shall not release or discharge its obligation under this Note; and agrees to pay
in addition to all other sums due hereunder reasonable attorney's fees if this
Note is placed in the hands of an attorney for collection or if it is collected
through bankruptcy or other judicial proceeding. Borrower agrees that during the
full term hereof the maximum lawful interest rate for this Note determined under
Texas law shall be the rate ceiling as specified in Article 5069-1D of V.A.T.S.
Further, to the extent that any other lawful rate ceiling exceeds the rate
ceiling so determined, then the higher rate ceiling shall apply. Chapter 346 of
the Texas Finance Code does not apply to this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of Texas.
IXC COMMUNICATIONS SERVICES, INC.
a Delaware corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
A-1
<PAGE> 116
EXHIBIT B
TERM PROMISSORY NOTE
$ Dallas, Texas
- ------------------------------ ----------------------------
FOR VALUE RECEIVED, the undersigned, IXC Communications Services, Inc.,
a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order of
____________________ ("Lender") _________________ MILLION AND NO/100 DOLLARS
($_______________), or so much thereof as may be advanced from time to time and
remain outstanding, payable at such times, and in such amounts, as are specified
in the Credit Agreement (as defined below). The books and records of Lender
shall be prima facie evidence of all sums due Lender.
Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date such Advance is made until such Advance is paid in full,
at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Administrative Agent (for the account of Lender) at its
principal banking house at NationsBank Plaza, 901 Main Street, Dallas, Texas
75202, or such other place as Lender may direct, in immediately available funds.
This Note is one of the Notes evidencing Obligations under the Term Loan
referred to in, and is entitled to the benefits of, the Credit Agreement dated
as of October 27, 1998 among Borrower, NationsBank, N.A., as Administrative
Agent and a Lender and certain other Lenders (as from time to time amended,
modified or supplemented, the "Credit Agreement"). Unless otherwise defined,
terms used herein shall have the meanings ascribed to them in the Credit
Agreement. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
Borrower and each guarantor, surety and endorser waives demand,
presentment, notice of dishonor, protest and diligence in collecting sums due
hereunder; agrees that extensions and renewals without limit as to number,
acceptance of any number of partial payments, releases of any party liable
hereon, and releases or substitutions of collateral, before or after maturity,
shall not release or discharge its obligation under this Note; and agrees to pay
in addition to all other sums due hereunder reasonable attorney's fees if this
Note is placed in the hands of an attorney for collection or if it is collected
through bankruptcy or other judicial proceeding. Borrower agrees that during the
full term hereof the maximum lawful interest rate for this Note determined under
Texas law shall be the indicated rate ceiling as specified in Article 5069-1.04
of V.A.T.S. Further, to the extent that any other lawful rate ceiling exceeds
the rate ceiling so determined, then the higher rate ceiling shall apply.
Chapter 15 of the Texas Credit Code does not apply to this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of Texas.
IXC COMMUNICATIONS SERVICES , INC.
a Delaware corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
B-1
<PAGE> 117
EXHIBIT C
QUARTERLY COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he/she is the duly elected *[Vice]*
President of IXC Communications Services, Inc., a Delaware corporation
("Borrower"), and that he/she is authorized to execute this Certificate on
behalf of Borrower pursuant to Section 7.03 of that certain Credit Agreement
dated as of _______________, 1998 ("Credit Agreement"), among Borrower and
NationsBank, N.A., individually and as Administrative Agent, and each Lender a
party thereto. All terms used but not defined herein shall have the meanings set
forth in the Credit Agreement. This Certificate is submitted concurrently with
[quarterly] [annual] financial statements of Borrower for the period ended
____________, 199__. The undersigned hereby further certifies to the following
as of the date set forth below:
1. To my knowledge no event which constitutes a Default or an Event of
Default has occurred and is continuing [or if such Event has occurred, the
nature of the Event and the action being taken or proposed to be taken with
respect thereto].
2. The following calculations with respect to Section 8.01 of the Credit
Agreement are true, accurate and complete, and are made in accordance with the
terms and provisions of the Credit Agreement:
Determination Date: __________________
A. SECTION 8.01(a), TOTAL LEVERAGE RATIO
1. Total Debt of the Parent, the Borrower and any Restricted
Subsidiaries of the Borrower on any determination date, which
would be shown on a consolidated balance sheet in accordance with
GAAP:
(a) Advances and other
Obligations under the Loan
Papers (except Letters of
Credit) plus $ ________
(b) Letters of Credit plus $ ________
(c) Capital Lease obligations plus $ ________
(d) Contingent Liabilities plus $ ________
(e) Withdrawal Liability plus $ ________
C-1
<PAGE> 118
(f) Debt of any other Person
secured by a Lien on the
property of the Borrower or
any Subsidiary of the Borrower
in an amount equal to the
lesser of (i) such Debt of such
Person and (ii) the value of
such pledged property plus $ ________
(g) Overdue interest on any debt
for Borrowed Money (but not accrued
interest that is not overdue) minus $ ________
(h) Any cash balances in excess of
$10,000,000 $ ________
(i) TOTAL DEBT
(a) + (b) + (c) + (d) + (e) + (f)
+ (g) - (h) $ ________
ANNUALIZED OPERATING CASH FLOW OF THE PARENT, THE BORROWER AND THE
SUBSIDIARIES OF THE BORROWER:
For the most recently two completed quarters:(1)(2)
(a) Consolidated net income (loss)
for such period taken as a
single accounting period plus $ ________
(b) The sum of the following
amounts for such period to the
extent included in the
determination of A.2(a), $ ________
without duplication:
(i) Depreciation expense plus $ ________
- -------------
(1) For purposes of the Total Leverage Ratio and the Senior Leverage Ratio
calculation, Operating Cash Flow shall be calculated as if all assets (including
Subsidiaries) acquired on any date during the period of determination were
acquired on the first day in such period of determination, and all assets sold
on any date during the period of determination were sold on the first day in
such period of determination.
(2) The calculation of Operating Cash Flow in the second quarter of 1998
shall exclude the one time charge not in excess of $1,400,000 related to the
acquisition of Eclipse.
C-2
<PAGE> 119
(ii) Amortization expense and other
non-cash charges reducing
income plus $ ________
(iii) Interest Expense plus $ ________
(iv) Income Tax Expense plus $ ________
(v) extraordinary losses minus $ ________
(vi) extraordinary gains minus $ ________
(vii) non-cash income $ ________
(c) OPERATING CASH FLOW
A.2(a) + A.2(b)(i) + A.2(b)(ii)
+ A.2(b)(iii) + A.2(b)(iv)
+ A.2(b)(v) - A.2(b)(vi) -
A.2(b)(vii) $ ________
(d) ANNUALIZED OPERATING CASH FLOW
[A.2(c) x 2] $ ________
3. TOTAL LEVERAGE RATIO (A.1(I) TO A.2(D)) ___TO 1.00
Maximum
From December 31, 1998 through
and including March 30, 1999 7.50 to 1.00
From March 31, 1999 through
and including March 30, 2000 6.50 to 1.00
C-3
<PAGE> 120
From March 31, 2000 through and
including March 30, 2001 5.50 to 1.00
From March 31, 2001 through and
including March 30, 2002 4.50 to 1.00
From March 31, 2002 and thereafter 3.50 to 1.00
B. SECTION 8.01(b), SENIOR LEVERAGE RATIO
1. (a) Total Debt (from A.1.(i) above) minus $ ________
(b) Aggregate outstanding principal amount
of the Subordinated Notes minus $ ________
(c) To the extent included in Total Debt,
accrued and unpaid interest on the
Subordinated Notes minus $ ________
(d) Cash balances of the Parent, the
Borrower and the Restricted
Subsidiaries of the Borrower which
in the aggregate exceed $10,000,000 $ ________
(e) SENIOR DEBT
B.1(a) - B.1(b) - B.1(c) - B.1(d) $ ________
2. Annualized Operating Cash Flow
(from A.2.(d) above) $ ________
3. SENIOR LEVERAGE RATIO (B.1.(E) TO B.2) ____ TO 1.00
C-4
<PAGE> 121
Maximum:
From December 31, 1998
through March 30, 2000 3.00 to 1.00
From March 31, 2000 through
March 30, 2001 2.75 to 1.00
From March 31, 2001 through
March 30, 2002 2.50 to 1.00
From March 31, 2002 and thereafter 2.00 to 1.00
C. SECTION 8.01(c), INTEREST COVERAGE RATIO
1. Operating Cash Flow for the
most recently completed 12
month period 2
(a) Consolidated net
income (loss) for such
period taken as a single $ ________
accounting period plus
(b) The sum of the following
amounts for such period to
the extent included in the
determination of C.1(a),
without depreciation: $ ________
(i) Depreciation expense plus $ ________
(ii) Amortization expense and
other non-cash charges
reducing income plus $ ________
(iii) Interest Expense plus $ ________
(iv) Income Tax Expense plus $ ________
C-5
<PAGE> 122
(v) extraordinary losses minus $ ________
(vi) extraordinary gains minus $ ________
$ ________
(vii) non-cash income __________
(c) OPERATING CASH FLOW
C.1(a) + C.2(b)(i) +
C.2(b)(ii) + C.2(b)(iii)
+C.2(b)(iv) + C.2(b)(v) $ ________
-C.2(b)(vi) - C.2(b)(vii)
2. CASH INTEREST EXPENSE $ ________
3. INTEREST COVERAGE RATIO: C.1 to C.2 ___ to 1.00
Minimum:
From December 31, 1998 through
and including December 31, 1999 2.00 to 1.00
From January 1, 2000 through and
including December 31, 2000 2.50 to 1.00
From January 1, 2001 and thereafter 3.00 to 1.00
D. SECTION 8.01(d), CAPITAL EXPENDITURES
The Borrower shall not permit Capital Expenditures made by the Parent, the
Borrower and its Restricted Subsidiaries for each fiscal year of the Borrower to
exceed the amounts set forth below for each fiscal year; provided, that (i) to
the extent that less than such amount set forth below was used by the Parent,
the Borrower and its Restricted Subsidiaries for Capital Expenditures for any
fiscal year, the Parent, the Borrower or its Restricted Subsidiaries may
increase the limitation on Capital Expenditures for the succeeding fiscal year
only provided that such increases in the aggregate do not exceed the amount of
such unused amount.
Capital Expenditures incurred to date for the current
fiscal year $ ________
Maximum:
From July 1, 1998 through
December 31, 1998 $425,000,000
For the Fiscal Year 1999 $475,000,000
For the Fiscal Year 2000 $175,000,000
C-6
<PAGE> 123
E. SECTION 8.01(e), FIXED CHARGE COVERAGE RATIO:
Commencing September 30, 2001 for the most recently completed 12 month
period:
1. (a) Consolidated net income (loss)
for such period taken as a
single accounting period plus $ ________
(b) The sum of the following
amounts for such period to the
extent included in the
determination of E.1(a),
without duplication:
(i) Depreciation expense plus $ ________
(ii) Amortization expense and other
non-cash charges reducing
income plus $ ________
(iii) Interest Expense plus $ ________
(iv) Income Tax Expense plus $ ________
(v) extraordinary losses minus $ ________
(vi) extraordinary gains minus $ ________
(vii) non-cash income $ ________
(c) OPERATING CASH FLOW(2)
E-1(a) + E.2(b)(i) + E.2(b)(ii)
+ E.2(b)(iii) + E.2(b)(iv)
+ E.2(b)(v) - E.2(b)(vi) -
E.2(b)(vii) $ ________
2. Unused Facility Amount that
Borrower is able to borrow
and remain in compliance with
Sections 8.01(a) and 8.01(b)
hereof $ ________
3. Cash Income Taxes for the
most recently completed 12
month period $ ________
C-7
<PAGE> 124
4. Cash on hand in excess of $10,000,000 $ ________
5. FIXED CHARGES
(a) Interest Expense plus $ ________
(b) Required principal payments
on Total Debt plus $ ________
(c) Capital Expenditures plus $ ________
(d) Permitted Restricted Payments $ ________
3. FIXED CHARGE COVERAGE RATIO:
E.1(C) + E.2 - E.3 + E.4 TO E.5 ____ TO 1.00
Minimum:
From September 30, 2001 and
thereafter 1.00 to 1.00
F. SECTION 8.01(F) MINIMUM OPERATING CASH FLOW(2)
Actual for quarters described below $ ________
Minimum:
Fiscal Quarter Ending
September 30, 1998 $16,000,000
Two Fiscal Quarters Ending
September 30, 1998 and
December 31, 1998 $48,000,000
IN WITNESS WHEREOF, I have executed this Certificate as of the ____ day
of ____________, 199____.
IXC COMMUNICATIONS SERVICES, INC.
________________________________________
By: ____________________________________
Its: ___________________________________
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EXHIBIT D
BORROWING NOTICE
[Date]
NationsBank, N.A.,
Administrative Agent
NationsBank Plaza
901 Main Street
64th Floor
Dallas, Texas 75202
RE: IXC Communications Services, Inc.
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement dated as of
October 27, 1998 (the "Credit Agreement", the terms defined therein being used
herein as therein defined) among IXC Communications Services, Inc., and
NationsBank, N.A., as Administrative Agent for NationsBank, N.A. and each
Lender, and hereby gives you notice pursuant to Section 2.02(a) of the Credit
Agreement that the undersigned hereby requests Borrowing[s] under the Credit
Agreement, and in that connection sets forth below the information relating to
[each] such Advance (a "Proposed Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
Proposed Borrowing:
(i) The Business Day of such Proposed Borrowing is ______________,
19__.
(ii) Borrower requests a Revolver\Special Purpose Advance\Term Loan
Advance;
(iii) The Type of Revolver\Special Purpose\Term Loan Advance[s]
comprising such Proposed Borrowing is [are] [Base Advance] [to
the extent of an aggregate amount of $________]] [LIBOR Advance
[to the extent of an aggregate amount of $________________]].
(iv) The aggregate amount of such Proposed Borrowing is $_________.
(v) The initial Interest Period for each LIBOR Advance made as part
of such Proposed Borrowing is .
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
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(A) the conditions precedent specified in Sections 4.01 and 4.02
of the Credit Agreement have been satisfied with respect to the Proposed
Borrowing and will remain satisfied on the date of such Proposed
Borrowing;
(B) the representations and warranties specified in Article V of
the Credit Agreement are true and correct in all material respects as
though made on and as of such date; and
(C) no event has occurred and is continuing or would result from
such Proposed Borrowing, which constitutes a Default or Event of
Default.
Very truly yours,
IXC COMMUNICATIONS SERVICES, INC.
________________________________________
By: ____________________________________
Its: ___________________________________
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EXHIBIT E
CONVERSION OR CONTINUATION NOTICE
[Date]
NationsBank, N.A.,
Administrative Agent
NationsBank Plaza
901 Main Street
7th Floor
Dallas, Texas 75202
RE: IXC Communications Services, Inc.
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement dated as of October 27,
1998 (such agreement, together with all amendments and restatements, the "Credit
Agreement"; the terms defined therein being used herein as therein defined)
among IXC Communications Services, Inc., and NationsBank, N. A., as
Administrative Agent for NationsBank, N.A. and each Lender, and hereby gives you
notice pursuant to Section 2.09 of the Credit Agreement that the undersigned
hereby requests Advance[s] under the Credit Agreement, and in that connection
sets forth below the information relating to [each] such Advance (a "Proposed
Borrowing") as required by Section 2.09 of the Credit Agreement:
Proposed Borrowing:
(i) The principal amount of existing LIBOR Revolver\Special
Purpose\Term Loan Advance to be [converted] [continued] is
$______________.
(ii) The Business Day of such Proposed Borrowing is _____________,
199__.
(iii) The Type of Advance[s] comprising such Proposed Revolver\Special
Purpose\Term Loan Advances is [are] LIBOR Advance to the extent
of an aggregate amount under the Revolver\Special Purpose\Term
Loan Advances of $________________.
[(iv) The initial Interest Period for each LIBOR Advance made as part
of such Proposed Borrowing is _____ months.]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
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(A) the conditions precedent specified in Sections 4.01, and 4.02
of the Credit Agreement have been satisfied with respect to the Proposed
Borrowing and will remain satisfied on the date of such Proposed
Borrowing;
(B) the representations and warranties specified in Article V of
the Credit Agreement are true and correct in all material respects as
though made on and as of such date; and
(C) no event has occurred and is continuing or would result from
such Proposed Borrowing, which constitutes a Default or Event of
Default.
Very truly yours,
IXC COMMUNICATIONS SERVICES, INC.
By: ____________________________________
_________________________, President
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EXHIBIT F
ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment and Acceptance") is
dated ________________, 199__, among ________________ ("Assignor") and
_____________________ ("Assignee") and NationsBank, N.A., as Administrative
Agent ("Administrative Agent").
BACKGROUND
A. Reference is made to the Credit Agreement dated as of , 1998 (as it
may hereafter be amended, restated, extended, increased, supplemented or
otherwise modified from time to time, being referred to as the "Credit
Agreement") among IXC Communications Services, Inc. (the "Borrower"), the
financial institutions parties thereto as Lenders thereunder, and Administrative
Agent for Lenders under the Credit Agreement. Unless otherwise defined, terms
are used herein as defined in the Credit Agreement.
B. This Assignment and Acceptance is made with reference to the following
facts:
(i) Assignor is a Lender under and as defined in the Credit
Agreement and, as such, presently holds a percentage of the rights and
obligations of Lenders under the Credit Agreement.
(ii) As of the date hereof, the Revolver Commitment is
$___________________, the Special Purpose Commitment is $______________,
the Term Loan is $_______________, and Assignor's Total Specified
Percentage is _____________%.
(iii) On the terms and conditions set forth below, Assignor
desires to sell and assign to Assignee, and Assignee desires to purchase
and assume from Assignor as of the Transfer Date (as defined below), a
portion of Assignor's Revolver Specified Percentage of the Revolver
Commitment equal to ____________%, a portion of Assignor's Special
Purpose Specified Percentage of the Special Purpose Commitment equal to
_________% and a portion of Assignor's Term Loan Specified Percentage of
$250,000,000 equal to ___________% (collectively, the "Assigned
Percentage").
AGREEMENT
NOW, THEREFORE, Assignor, Assignee, Administrative Agent and Borrower
each hereby agree as follows:
1. Assignor hereby sells and assigns to Assignee, without recourse and,
except as provided in paragraph 2 of this Assignment and Acceptance, without
representation and warranty, and Assignee hereby purchases and assumes from
Assignor, Assignor's rights and obligations under the Credit Agreement, to the
extent of Assignee's Assigned Percentage as set forth in paragraph B(iii) above
(including without limitation, (a) the Assigned Percentage of Assignor's
Revolver Specified Percentage
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of the Revolver Commitment, of Assignor's Special Purpose Specified Percentage
of the Special Purpose Commitment, and of Assignor's Term Loan Specified
Percentage of $250,000,000 and (b) its Assigned Percentage of each of the
Advances owing to Assignor on the Transfer Date).
2. Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interests being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement, any other Loan Paper or any other instrument or document furnished
pursuant thereto, or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other Loan Paper or any other instrument or document furnished pursuant thereto
or any collateral; and (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
Person, the performance or observance by the Borrower or any Person of any of
its obligations under the Loan Papers, or any other instrument or document
furnished pursuant thereto.
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to Administrative Agent pursuant to Article VII of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (b) agrees that it will, independently and without reliance upon the
Administrative Agent, Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement
and the other Loan Papers; (c) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Papers as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (d) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement and the other Loan Papers are required to be performed by it as a
Lender; and (e) specifies, as its address for notice and Lending Office, the
office set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance (the "Transfer
Date") with respect to its assignment to Assignee shall be the date following
execution by the parties hereto on which Assignor receives from Assignee an
amount in same day funds equal to its Assigned Percentage of the aggregate
principal amount of Advances owing to Assignor on such date, Administrative
Agent and the Borrower receive notice thereof and an executed copy of this
Assignment and Acceptance, and Administrative Agent receives the $3500.00
processing fee from Assignor required under Section 11.04 of the Credit
Agreement. The Borrower acknowledges its obligations under the Credit Agreement,
and agrees, after receiving an executed copy of this Assignment and Acceptance
to execute and deliver to Administrative Agent, in exchange for the Note
originally delivered to Assignor, new Notes to the order of Assignor and
Assignee in amounts equal to their respective Revolver Specified Percentages of
the Revolver Commitment, the Special Purpose Specified Percentages of the
Specified Purposes Commitment, and the Term Loan Specified Percentages of
$250,000,000.
5. As of the Transfer Date, (a) Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder, (b) Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its
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rights and be released from its obligations under the Credit Agreement and other
Loan Papers, (c) Assignor's Revolver Specified Percentage shall be %, Assignee's
Revolver Specified Percentage shall be _________%, (d) Assignor's Term Loan
Specified Percentage shall be ________%, Assignee's Term Loan Specified
Percentage shall be __________%, and (e) Assignor's Special Purpose Specified
Percentage shall be ___________%, and Assignee's Special Purpose Specified
Percentage shall be ___________%.
6. From and after the Transfer Date, Administrative Agent shall make all
payments under the Credit Agreement in respect of the interests assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to Assignee in its Revolver Specified Percentage, in its
Term Loan Specified Percentage, and in its Special Purpose Specified Percentage.
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement for periods prior to the Transfer Date directly between
themselves.
7. This Assignment and Acceptance may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. In making proof of this document, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought.
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THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
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8. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the state of Texas, without reference to principles
of conflict of laws.
ASSIGNOR:
_______________________________________
By: ___________________________________
Name: _________________________________
Title: ________________________________
Address: ASSIGNEE:
Attn: By: ___________________________________
Telephone No.: ( ) ______-_______ Name: _________________________________
Telecopier No.: ( ) ______-_______ Title: ________________________________
LIBOR Lending Office:
Attn:
Telephone No.: ( ) ______-_______
Telecopier No.: ( ) ______-_______
ADMINISTRATIVE AGENT
NATIONSBANK, N.A.,
as Administrative Agent
By: ___________________________________
Name: _________________________________
Its: __________________________________
Accepted and approved this _____
day of _______________, 199___:
IXC COMMUNICATIONS SERVICES, INC.
By: ___________________________________
Name: _________________________________
Its: __________________________________
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EXHIBIT G
GUARANTY
THIS GUARANTY, dated as of October 27,1998 (as amended, restated and
otherwise modified from time to time this "Guaranty"), made by the undersigned
(the "Guarantor"), of the obligations of IXC Communications Services, Inc., a
Delaware corporation ("Company"), under the Credit Agreement (defined below)
among the Company, NationsBank, N.A., as administrative agent ("Administrative
Agent"), and the lenders party to the Credit Agreement (singly, a "Lender" and
collectively, the "Lenders").
BACKGROUND
The Company, the Administrative Agent, and the Lenders have entered into
an Credit Agreement dated as of October 27, 1998 (as it may be amended, restated
or otherwise modified from time to time, being the "Credit Agreement"). The
capitalized terms not otherwise defined herein have the meanings specified in
the Credit Agreement.
1. Pursuant to the Credit Agreement, the Company may, subject to the
terms of the Credit Agreement and the other Loan Papers, request that the
Lenders make Advances.
It is a condition precedent to the obligation of the Lenders to make
such Advances upon the terms and conditions set forth herein that the Guarantor
execute and deliver this Guaranty.
2. The Guarantor has determined that the execution, delivery, and
performance of this Guaranty is necessary and convenient to the conduct,
promotion, and attainment of Guarantor's business.
Guarantor desires to induce the Lenders to make such Advances which may
reasonably be expected to benefit, directly or indirectly, Guarantor.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances, Guarantor hereby agrees as follows:
1. Guaranty.
(a) Guarantor hereby unconditionally guarantees the punctual payment of,
and promises to pay, when due, whether at stated maturity, by mandatory
prepayment, by acceleration or otherwise, all Obligations, indebtedness and
liabilities, and all rearrangements, renewals and extensions of all or any part
thereof, of Company, any Subsidiary or any other Obligor now or hereafter
arising from, by virtue of or pursuant to the Credit Agreement, the Notes, any
other Loan Paper, and any and all renewals and extensions thereof, or any part
thereof, or future amendments thereto, whether for principal, interest
(including, without limitation, interest, fees and other charges that would
accrue or become owing both prior to and subsequent to and but for the
commencement of any proceeding against or with respect to the Company under any
chapter of the Bankruptcy Code of 1978, 11 U.S.C. ss.101 et seq. whether or not
a claim is allowed for the same in any such proceeding), premium, fees,
commissions, expenses or
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otherwise (such obligations being the "Obligation"), and agrees to pay any and
all reasonable expenses (including reasonable counsel fees and expenses)
incurred in enforcement or collection of all or any part thereof, whether such
obligations, indebtedness and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several, and of any rights under this
Guaranty.
(b) Anything contained in this Guaranty to the contrary notwithstanding,
the obligations of Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any applicable provisions
of comparable state law (collectively, the "Fraudulent Transfer Laws"), in each
case after giving effect to all other liabilities of Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of Guarantor in respect of intercompany
indebtedness to the Company or other Affiliates of the Company to the extent
that such indebtedness would be discharged in an amount equal to the amount paid
by Guarantor hereunder) and after giving effect as assets, subject to Paragraph
4(a) hereof, to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation or contribution of
Guarantor pursuant to (i) Applicable Law or (ii) any agreement providing for an
equitable allocation among Guarantor and other Affiliates of the Company of
obligations arising under guaranties by such parties.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the Obligation will be
paid strictly in accordance with the terms of the Credit Agreement, the Notes,
and the other Loan Papers, regardless of any Applicable Law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Lender with respect thereto; provided, however, nothing
contained in this Guaranty shall require Guarantor to make any payment under
this Guaranty in violation of any Applicable Law, regulation or order now or
hereafter in effect. The obligations and liabilities of Guarantor hereunder are
independent of the obligations of the Company under the Credit Agreement and any
Applicable Law, to the extent such payments are not in violation of any
Applicable Law. The liability of Guarantor under this Guaranty shall be absolute
and unconditional irrespective of:
(a) the taking or accepting of any other security or guaranty
for any or all of the Obligations;
(b) any increase, reduction or payment in full at any time or
from time to time of any part of the Obligation, including any reduction
or termination of the Commitment;
(c) any lack of validity or enforceability of the Credit
Agreement, the Notes, or any other Loan Paper or other agreement or
instrument relating thereto, including but not limited to the
unenforceability of all or any part of the Obligation by reason of the
fact that (i) the Obligation, and/or the interest paid or payable with
respect thereto, exceeds the amount permitted by Applicable Law, (ii)
the act of creating the Obligation, or any part thereof, is ultra vires,
(iii) the officers creating same acted in excess of their authority, or
(iv) for any other reason;
(d) any lack of corporate power of the Company or any other
Person at any time liable for the payment of any or all of the
Obligation;
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(e) any Debtor Relief Laws affecting the rights of creditors
generally involving the Company, Guarantor or any other Person obligated
on any of the Obligation;
(f) any renewal, compromise, extension, acceleration or other
change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligation; any adjustment, indulgence,
forbearance, or compromise that may be granted or given by any Lender or
the Administrative Agent to the Company, Guarantor, or any Person at any
time liable for the payment of any or all of the Obligation; or any
other modification, amendment, or waiver of or any consent to departure
from the Credit Agreement, the Notes, or any other Loan Paper and other
agreement or instrument relating thereto without notification of
Guarantor (the right to such notification being herein specifically
waived by Guarantor);
(g) any exchange, release, sale, subordination, or non-perfection
of any collateral or Lien thereon or any lack of validity or
enforceability or change in priority, destruction, reduction, or loss or
impairment of value of any collateral or Lien thereon;
(h) any release or amendment or waiver of or consent to departure
from any other guaranty for all or any of the Obligation;
(i) the failure by any Lender or the Administrative Agent to make
any demand upon or to bring any legal, equitable, or other action
against the Company or any other Person (including without limitation
Guarantor), or the failure or delay by any Lender or the Administrative
Agent to, or the manner in which any Lender or the Administrative Agent
shall, proceed to exhaust rights against any direct or indirect security
for the Obligation;
(j) the existence of any claim, defense, set-off, or other rights
which the Company or Guarantor may have at any time against the Company,
the Lenders, or Guarantor, or any other Person, whether in connection
with this Guaranty, the Loan Papers, the transactions contemplated
thereby, or any other transaction;
(k) any failure of any Lender or the Administrative Agent to
notify Guarantor of any renewal, extension, or assignment of the
Obligation or any part thereof, or the release of any security, or of
any other action taken or refrained from being taken by any Lender or
the Administrative Agent, it being understood that the Lenders and the
Administrative Agent shall not be required to give Guarantor any notice
of any kind under any circumstances whatsoever with respect to or in
connection with the Obligation;
(l) any payment by the Company to the Lenders or the
Administrative Agent is held to constitute a preference under any Debtor
Relief Law or if for any other reason the Lenders or the Administrative
Agent is required to refund such payment or pay the amount thereof to
another Person; or
(m) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Company, Guarantor, any
other guarantor or other Person liable on the Obligation, including
without limitation any defense by reason of any disability or other
defense of the Company, or the cessation from any cause whatsoever of
the liability of the Company, or any claim that Guarantor's obligations
hereunder exceed or are more burdensome than those of the Company.
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This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligation is rescinded or must
otherwise be returned by any Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Company, Guarantor or otherwise, all as
though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, Guarantor
hereby waives: (a) promptness, protests, diligence, presentments, acceptance,
performance, demands for performance, notices of nonperformance, notices of
protests, notices of dishonor, notices of acceptance of this Guaranty and of the
existence, creation or incurrence of new or additional indebtedness, and any of
the events described in Section 2 herein and of any other occurrence or matter
with respect to any of the Obligation, this Guaranty or any of the other Loan
Papers; (b) any requirement that the Administrative Agent or any Lender protect,
secure, perfect, or insure any Lien or security interest or any property subject
thereto or exhaust any right or take any action against the Company or any other
Person or any collateral or pursue any other remedy in the Administrative
Agent's or any Lender's power whatsoever; (c) any right to assert against the
Administrative Agent or any Lender as a counterclaim, set-off or cross-claim,
any counterclaim, set-off or claim which it may now or hereafter have against
the Company or other Person liable on the Obligation; (d) any right to seek or
enforce any remedy or right that the Administrative Agent or any Lender now has
or may hereafter have against the Company (to the extent permitted by Applicable
Law); (e) except as otherwise provided in Section 4 hereof, any right to
participate in any collateral or any right benefitting the Administrative Agent
or the Lenders in respect of the Obligation; and (f) any right by which it might
be entitled to require suit on an accrued right of action in respect of any of
the Obligation or require suit against the Company or any other Person, whether
arising pursuant to Section 34.02 of the Texas Business and Commerce Code, as
amended, Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended, Rule 31 of the Texas Rules of Civil Procedure, as amended, or
otherwise.
4. SUBROGATION AND SUBORDINATION.
(a) Notwithstanding any reference to subrogation contained herein to the
contrary, Guarantor hereby irrevocably waives any claim or other rights which it
may have or hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of Guarantor's obligations under this
Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of any Lender against the Company or any
collateral which any Lender now has or hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statutes or common
law, including without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights
until the Obligation shall have been paid indefeasibly in full in cash and no
commitments of any Lender remain outstanding; and thereafter Guarantor will be
subrogated to the position of the Lenders to the extent of the payments made by
Guarantor. If any amount shall be paid to Guarantor in violation of the
preceding sentence and the Obligation shall not have been paid indefeasibly in
full in cash or any commitment of any Lender shall remain outstanding, such
amount shall be deemed to have been paid to Guarantor for the benefit of, and
held in trust for the benefit of, the Lenders, and shall forthwith be paid to
the Administrative Agent to be credited and applied upon the Obligation, whether
matured or unmatured, in accordance with the terms
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of the Credit Agreement. Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Paragraph 4(a) is knowingly made
in contemplation of such benefits.
(b) If Guarantor becomes the holder of any indebtedness payable by the
Company, Guarantor hereby subordinates all indebtedness owing to it from the
Company to all indebtedness of the Company to the Lenders, and agrees that upon
the occurrence and continuance of a Default or an Event of Default, it shall not
accept any payment on the same until payment indefeasibly in full in cash of the
Obligations of the Company under the Credit Agreement, the Notes and all other
Loan Papers, and shall in no circumstance whatsoever attempt to set-off or
reduce any obligations hereunder because of such indebtedness. If any amount
shall nevertheless be paid to Guarantor by the Company on behalf of the Company
prior to payment in full of the Obligation, such amount shall be held in trust
for the benefit of the Lenders and shall forthwith be paid to the Administrative
Agent to be credited and applied to the Obligation, whether matured or
unmatured.
5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that all representations and warranties as they apply to Guarantor only
set forth in Article V of the Credit Agreement (each of which is hereby
incorporated by reference) are true and correct.
6. COVENANTS. Guarantor hereby expressly assumes, confirms, and agrees
to perform, observe, and be bound by all conditions and covenants set forth in
the Credit Agreement, to the extent applicable to it, as if it were a signatory
thereto. Guarantor further covenants and agrees (a) punctually and properly to
perform all of Guarantor's covenants and duties under any other Loan Papers; (b)
from time to time promptly to furnish the Administrative Agent with any
information or writings which the Administrative Agent may request concerning
this Guaranty; and (c) promptly to notify the Administrative Agent of any claim,
action, or proceeding affecting this Guaranty. Guarantor designates the
Obligation as Senior Indebtedness and Designated Senior Indebtedness as defined
in the Subordinated Notes and the Junior Exchangeable Documentation.
7. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by Guarantor, the
Lenders or the Administrative Agent as provided in the Credit Agreement, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
8. ADDRESSES FOR NOTICES. Unless otherwise provided herein, all notices,
requests, consents, demands, and other communications shall be in writing and
shall be personally delivered, sent by telecopy, sent by Federal Express or
other overnight delivery service or mailed, by certified mail, postage prepaid,
to the following addresses:
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(a) If to the Guarantor:
c\o IXC Communications, Inc.
1122 Capital of Texas Highway South
Austin, Texas 78746
Telephone No.: (512) 427-3713
Telecopier No.: (512) 328-0239
Attention: Mr. James F. Guthrie
Executive Vice President and
Chief Financial Officer
With a copy (which shall not constitute notice) to:
Riordan & McKinzie
A Professional Corporation
695 Town Center Drive, Suite 1500
Costa Mesa, CA 92626
Telephone No.: (714) 433-2900
Facsimile No.: (714) 549-3244
Attention: Mike Whalen, Esq.
(b) If to the Administrative Agent:
NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214)508-2576
Facsimile: (214)508-9390
Attention: Ms. Roselyn M. Drake
Vice President
with a copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Melissa Ruman Stewart
(c) If to any Lender, to its address shown on the signature pages
hereto or to such other address as any party may designate in
written notice to the other parties. All notices, requests,
consents, demands, and other communications hereunder will be
effective when so personally delivered or sent by telecopy, or
one day after being sent by Federal Express or other overnight
delivery service or five days after being so mailed, except as
otherwise provided in the Credit Agreement.
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9. NO WAIVER; REMEDIES. No failure on the part of the Administrative
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any of the Loan Papers shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder or under any of the Loan
Papers preclude any other or further exercise thereof or the exercise of any
other right. Neither the Administrative Agent nor any Lender shall be required
to (a) prosecute collection or seek to enforce or resort to any remedies against
the Company or any other Person liable on any of the Obligation, (b) join the
Company or any other Person liable on any of the Obligation in any action in
which Lender prosecutes collection or seeks to enforce or resort to any remedies
against the Company or other Person liable on any of the Obligation, or (c) seek
to enforce or resort to any remedies with respect to any Liens granted to (or
benefitting, directly or indirectly) the Administrative Agent or any Lender by
the Company or any other Person liable on any of the Obligation. Neither the
Administrative Agent nor any Lender shall have any obligation to protect, secure
or insure any of the Liens or the properties or interests in properties subject
thereto. The remedies herein provided are cumulative and not exclusive of any
remedies provided by Applicable Law.
10. RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, each Lender 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 indebtedness at any time owing by such Lender to or for the
credit or the account of Guarantor against any and all of the obligations of
Guarantor now or hereafter existing under this Guaranty, irrespective of whether
or not such Lender shall have made any demand under this Guaranty. Each Lender
agrees promptly to notify Guarantor after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 10
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
11. LIENS. To the extent not prohibited by Applicable Law, Guarantor
agrees that the Administrative Agent or Lender, in its discretion, without
notice or demand to or upon Guarantor and without affecting either the liability
of Guarantor, the Company or any other Person liable on any of the Obligation
under, or the Liens and security interests created by, this Guaranty, or any
security interest or other Lien, may foreclose any deed of trust or mortgage or
similar Lien covering interests in real or personal property, and the interests
in real or personal property secured thereby, by nonjudicial sale; and Guarantor
hereby waives, to the extent not prohibited by Applicable Law, any defense to
the recovery by the Administrative Agent or any Lender hereunder against the
Company, Guarantor or any collateral of any deficiency after a nonjudicial sale
and Guarantor expressly waives any defense or benefits that may be derived from
Chapter 34 of the Texas Business and Commerce Code, Section 51.003 of the Texas
Property Code, or any similar statute in effect in any other jurisdiction.
Without limiting the foregoing, Guarantor waives, to the extent not prohibited
by Applicable Law, any defense arising out of any such nonjudicial sale even
though such sale operates to impair or extinguish any right of reimbursement or
subrogation or any other right or remedy of Guarantor against the Company or any
other Person or any
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Collateral or any other collateral. Guarantor hereby agrees that Guarantor shall
be liable, subject to the limitations of Section 1 hereof, for any part of the
Obligation remaining unpaid after any foreclosure.
12. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is an
irrevocable continuing guaranty of payment and shall (a) remain in full force
and effect until final payment indefeasibly in full in cash of the Obligations,
termination of the Commitment, and all other amounts payable under this
Guaranty, (b) be binding upon Guarantor, its successors and assigns, and (c)
inure to the benefit of and be enforceable by each Lender and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), to the extent permitted by the Credit Agreement, each Lender may assign or
otherwise transfer its rights under the Credit Agreement, the Notes or any of
the Loan Papers or any interest therein to any other Person, and such other
Person shall thereupon become vested with all the rights or any interest
therein, as appropriate, in respect thereof granted to the Lender herein or
otherwise.
13. INFORMATION. Guarantor acknowledges and agrees that it shall have
the sole responsibility for obtaining from the Company such information
concerning the Company's financial condition or business operations as Guarantor
may require, and that neither the Administrative Agent nor any Lender has any
duty at any time to disclose to Guarantor any information relating to the
business operations or financial conditions of the Company.
14. GOVERNING LAW. (A) THIS AGREEMENT AND ALL LOAN PAPERS SHALL BE
DEEMED CONTRACTS MADE UNDER THE LAWS OF TEXAS AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF TEXAS, EXCEPT TO THE
EXTENT FEDERAL LAWS GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF ALL OR ANY PART OF THIS AGREEMENT AND ALL LOAN PAPERS. WITHOUT
EXCLUDING ANY OTHER JURISDICTION, THE GUARANTOR AGREES THAT THE COURTS OF TEXAS
WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.
(B) THE GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS
UPON IT. IN ADDITION, THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE GUARANTOR
AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON RECEIPT BY SUCH GUARANTOR. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
15. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
GUARANTOR AND THE LENDERS HEREBY WAIVE ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR OTHERWISE)
ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS, OR ANY
RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY.
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16. RATABLE BENEFIT. This Guaranty is for the ratable benefit of the
Lenders, each of which shall share any proceeds of this Guaranty pursuant to the
terms of the Credit Agreement.
17. GUARANTOR INSOLVENCY. Should Guarantor become insolvent, fail to pay
its debts generally as they become due, voluntarily seek, consent to, or
acquiesce in the benefits of any Debtor Relief Laws or become a party to or be
made the subject of any proceeding provided for by any Debtor Relief Laws (other
than as a creditor or claimant) that could suspend or otherwise adversely affect
the rights of any Lender granted hereunder, then, the obligations of Guarantor
under this Guaranty shall be, as between Guarantor and such Lender, a
fully-matured, due, and payable obligation of Guarantor to such Lender (without
regard to whether the Company is then in default under the Credit Agreement or
whether any part of the Obligation is then due and owing by the Company to such
Lender), payable in full by Guarantor to such Lender upon demand, which shall be
the estimated amount owing in respect of the contingent claim created hereunder.
18. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its respective officers thereunto duly authorized as
of the date first above written.
____________________________________
By: ________________________________
Its: _______________________________
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EXHIBIT H
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of October 27, 1998 (this "Agreement"), by IXC
Communications Services, Inc., a Delaware corporation ("Pledgor"), in favor of
NationsBank, N.A., a national banking association, in its capacity as
Administrative Agent pursuant to the Credit Agreement described below
("Administrative Agent") and each lender a party to the Credit Agreement from
time to time (singly, a "Secured Party" and collectively "Secured Parties").
BACKGROUND
(1) Secured Parties, Administrative Agent and Pledgor have entered into
the Credit Agreement dated as of October 27, 1998 (as the same may be
supplemented, amended and modified from time to time, being the "Credit
Agreement").
(2) It is the intention of the parties hereto that this Agreement and
the steps contemplated hereby will create a first priority security interest
securing the payment of the obligations set forth in Section 1.02 hereof.
(3) It is a condition precedent to the extension of credit under the
Credit Agreement that Pledgor shall have executed and delivered this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to induce Secured Parties to make the
Advances under the Credit Agreement, Pledgor hereby agrees with Administrative
Agent, for its benefit and the ratable benefit of Secured Parties, as follows:
ARTICLE I. PLEDGE
1.01. PLEDGE. Pledgor hereby grants, pledges, assigns, hypothecates, and
transfers to Administrative Agent, for its benefit and the ratable benefit of
Secured Parties, a first and prior pledge and security interest in all Capital
Stock (excluding Excluded Stock) owned by Pledgor in all Persons and each other
Person which is a successor to such Persons (singly, an "Issuer", and
collectively "Issuers"), now or hereafter owned beneficially or of record by
Pledgor and any certificate or instrument evidencing such interest, including,
but not limited to the interests listed on Schedule 1 hereto; and without
affecting the obligation of Pledgor or Issuer under any agreement prohibiting
such action, in the event of any consolidation or merger in which each Issuer is
not the surviving entity, or in the event of any sale, lease, transfer or other
disposition of all or substantially all of the assets of such Issuer, all
Capital Stock, equity, partnership, limited liability company ("LLC") or other
interest of the successor entity formed by or resulting from such consolidation
or merger, or of the Person to which such sale, lease, transfer or other
disposition shall have been made, owned by Pledgor, and all proceeds and
products of the foregoing (collectively, "Collateral"), to secure the payment
and performance of the Obligations (as defined below).
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1.02. DESCRIPTION OF OBLIGATIONS. The security interest granted by
Pledgor shall secure the payment and performance of any and all obligations now
or hereafter existing of Pledgor or any Subsidiary of the Pledgor, and any other
Obligor (other than Administrative Agent or Secured Parties) under the Credit
Agreement and the Loan Papers, including any extensions, modifications,
substitutions, amendments and renewals thereof, whether for principal, interest,
fees, premium, expenses, indemnification or otherwise (all such obligations of
Pledgor, each of its Subsidiaries, and each other Obligor together with the
"Obligations" as defined in the Credit Agreement being the "Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts which constitute part of the Obligations and would be
owed by Pledgor, each of its Subsidiaries or any other Obligor to Administrative
Agent or any Secured Party under any Loan Paper, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Pledgor, each of its Subsidiaries
or any other Obligor (including all such amounts which would become due but for
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of Pledgor, any of its Subsidiaries, or any
other Obligor under any Debtor Relief Law).
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.01. REPRESENTATIONS AND WARRANTIES CONCERNING PLEDGOR. Pledgor
represents and warrants to Administrative Agent and each Secured Party that (a)
the chief place of business and chief executive office of Pledgor and the office
where Pledgor keeps all of its records is located at 1122 Capitol of Texas
Highway South, Austin, Texas 78746 and (b) no consent of any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
Tribunal is required (i) for the pledge by Pledgor of the Collateral pledged by
it hereunder, for the grant by Pledgor of the security interest granted hereby
or for the execution, delivery or performance of this Agreement by Pledgor, (ii)
for the perfection or maintenance of the pledge, assignment and security
interest created hereby (including the first priority nature of such pledge,
assignment and security interest), or (iii) for the exercise by Administrative
Agent of the Rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement.
2.02. REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL. Pledgor
represents and warrants to Administrative Agent and each Secured Party that (a)
Pledgor is the sole legal and beneficial owner of the Collateral pledged by it
free and clear of any Lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement or as
otherwise permitted by the Credit Agreement; (b) no effective financing
statement or other similar document used to perfect and preserve a security
interest under the Laws of any jurisdiction covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed in favor of Administrative Agent relating to this Agreement and as
otherwise permitted by the Credit Agreement; (c) Schedule 1 is a complete and
correct description of all interest of Pledgor in each of its Subsidiaries,
including each class of interest and number of units or percentage of ownership
owned by Pledgor; (d) the pledge, assignment, and delivery of the Collateral
hereunder, and filing of an appropriate financing statement, create a valid
first and prior perfected security interest in the Collateral, securing the
Obligations; (e) the Capital Stock pledged hereunder is duly authorized, validly
issued, fully paid, and non-assessable and were not issued in violation of the
Rights of any Person; (f) no unpaid capital call or dispute exists with respect
to any of the Collateral; (g) none of the Collateral is evidenced by a
certificate, instrument or other writing that has not been delivered to
Administrative Agent; (h) the interest of Pledgor in each of its Subsidiaries is
a 100% interest
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of all Capital Stock of Pledgor's Subsidiaries specified on Schedule 1; (i) none
of the Collateral is subject to any buy-sell, voting trust, transfer restriction
(other than transfer restrictions arising under the Exchange Act), preferential
right to purchase or similar agreement or any option, warrant, put or call or
similar agreement, which consent has not been obtained; (j) Pledgor is organized
pursuant to the articles of incorporation, partnership agreement, LLC agreement,
bylaws or other articles of governance, and no other agreement amends the rights
of Pledgor under such documents; and (k) Pledgor's federal taxpayer
identification number is 74-2724593. The delivery at any time by Pledgor to
Administrative Agent of Collateral shall constitute a representation and
warranty by Pledgor under this Agreement that, with respect to such Collateral,
Pledgor is the sole legal and beneficial owner of the Collateral, and that the
matters set forth in this Section 2.02 are true and correct with respect to such
Collateral.
2.03. REPRESENTATIONS AND WARRANTIES CONCERNING BENEFIT. Pledgor
represents and warrants to Administrative Agent and each Secured Party that (a)
the value of the consideration received and to be received by Pledgor is
reasonably worth at least as much as the liability and obligation of Pledgor
hereunder, and such liability and obligation may reasonably be expected to
benefit Pledgor directly or indirectly; and (b) none of Administrative Agent.
Secured Party or any other Person has made any representation, warranty or
statement to Pledgor (other than as provided in the Loan Papers) in order to
induce Pledgor to execute this Agreement.
ARTICLE III. COVENANTS
3.01. AFFIRMATIVE COVENANTS. Pledgor covenants and agrees (a) promptly
to deliver to Administrative Agent all instruments, certificates, documents, or
agreements evidencing any of the Collateral; (b) promptly to notify
Administrative Agent of any material change in any fact or circumstances
warranted or represented by Pledgor in this Agreement or in any other Loan
Paper; (c) promptly to notify Administrative Agent of any claim, action, or
proceeding affecting Pledgor's title to the Collateral, or any part thereof, or
the security interest therein granted hereunder, and, at the request of
Administrative Agent, appear in and defend, at Pledgor's expense, any such
action or proceeding; and (d) promptly to pay to Administrative Agent the amount
of all court costs and reasonable attorney's fees incurred by Administrative
Agent hereunder.
3.02. NEGATIVE COVENANTS. Pledgor covenants and agrees that it shall not
(a) create any other security interest or pledge in, mortgage or otherwise
encumber the Collateral or any part thereof, or permit the same to be or become
subject to any Lien, attachment, execution, sequestration, other legal or
equitable process, or any encumbrance of any kind or character, or grant any
option, warrant, or other Rights in the Collateral in favor of any Person other
than Administrative Agent; (b) except as permitted under the Credit Agreement,
cause or permit any Issuer to authorize and issue any additional Capital Stock,
or take any other action that would otherwise dilute any of the Collateral; (c)
except as permitted in the Credit Agreement, approve any amendment to the
articles of incorporation, partnership agreement, LLC agreement, bylaws, or
other organizational or governance document of any Issuer; (d) except as
permitted in the Credit Agreement, permit the merger, consolidation or
dissolution of any Issuer; or (e) sell, lease, transfer or otherwise dispose of
any Collateral in any manner.
3.03. RIGHT TO DISTRIBUTIONS. With respect to any certificates, bonds,
or other instruments or securities constituting a part of the Collateral,
Administrative Agent shall have authority during the
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continuance of an Event of Default, without notice to Pledgor, either to have
the same registered in Administrative Agent's name or in the name of a nominee,
and, with or without such registration, to demand of the issuer thereof, and to
receive and receipt for, any and all Distributions (including any stock or
similar dividend or distribution) payable in respect thereof, whether they be
ordinary or extraordinary. Subject to the next sentence hereof, if Pledgor shall
become entitled to receive or shall receive any interest in or certificate
(including, without limitation, any interest in or certificate representing a
Distribution in connection with any reclassification, increase, or reduction of
capital, or issued in connection with any reorganization), or any option or
Rights arising from or relating to any of the Collateral, whether as an addition
to, in substitution of, as a conversion of, or in exchange for any of the
Collateral, or otherwise, Pledgor agrees to accept the same as Administrative
Agent's agent and to hold the same in trust on behalf of and for the benefit of
Administrative Agent, and to deliver the same immediately to Administrative
Agent in the exact form received, with appropriate undated stock, partnership
interest, LLC membership interest, or similar powers, duly executed in blank, to
be held by Administrative Agent, subject to the terms hereof, as Collateral.
Unless an Event of Default is in existence or would occur as a result thereof,
Pledgor shall be entitled to receive and utilize for its own purposes, all cash
Distributions (other than Distributions constituting a return of capital) paid
in respect of any of the Collateral. Administrative Agent shall be entitled to
all Distributions, and to any sums paid upon or in respect of any Collateral,
upon the liquidation, dissolution, or reorganization of the issuer thereof or
which constitute a return of capital which shall be paid to Administrative Agent
to be held by it as additional collateral security for the Obligations and
application to the Obligations at the discretion of Administrative Agent. All
Distributions paid or distributed in respect of the Collateral which are
received by Pledgor in violation of this Agreement shall, until paid or
delivered to Administrative Agent, be held by Pledgor in trust as additional
Collateral for the Obligations.
3.04. RECORDS OF COLLATERAL. Pledgor at all times shall maintain
accurate books and records concerning the Collateral. Pledgor shall cause all
issuers of the Collateral to mark immediately all books and records of issue,
registration, and transfer relating to the Collateral, with an entry showing the
collateral assignment of the Collateral to Administrative Agent.
3.05. INFORMATION AND INSPECTION. Subject to the terms and provisions of
Section 6.07 of the Credit Agreement, Pledgor shall, and shall cause each Issuer
to, (a) allow Administrative Agent to inspect and copy, or at the option of
Administrative Agent, furnish copies of, all records relating to the Collateral
and the Obligations; and (b) furnish Administrative Agent such information as it
may request with respect to the Collateral, any Distributions thereon, and any
proceeds thereof, at the time and in the form requested by Administrative Agent.
3.06. INDEMNITY AND EXPENSES. (a) Pledgor shall indemnify Administrative
Agent and each Secured Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) growing out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement), expressly including such claims, losses or liabilities arising out
of mere negligence of Administrative Agent or any Secured Party, except claims,
losses or liabilities resulting from Administrative Agent's or any Secured
Party's gross negligence or willful misconduct.
(b) Pledgor will upon demand pay to Administrative Agent and each
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
Administrative Agent and each Secured Party may incur in connection
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with (i) the sale of, collection from, or other realization upon, any of the
Collateral, (ii) the exercise or enforcement of any of the Rights of
Administrative Agent or any Secured Party hereunder or (iii) the failure by
Pledgor to perform or observe any of the provisions hereof.
(c) Any payment made or cost borne by Administrative Agent and each
Secured Party shall be a part of the Obligations, shall be payable upon demand,
and shall bear interest as provided in the Credit Agreement.
3.07. ADDITIONAL DOCUMENTS. Pledgor, at its expense, shall take all
action, and execute and deliver such further instruments, agreements, blank
stock, partnership interest, LLC membership interest, or similar powers, and
assignments as Administrative Agent shall deem necessary or appropriate to
obtain, maintain, and perfect the security interest hereunder, including the
security interest in after-acquired Collateral granted herein, and to enable
Administrative Agent to comply with all applicable federal or state Law, in
order to obtain or perfect Administrative Agent's interest in the Collateral, to
effect its Rights hereunder, or to obtain Distributions and other proceeds of
the Collateral as provided herein.
3.08. ADDITIONAL COLLATERAL. Upon acquisition by Pledgor of any
additional interest in any Issuer, Pledgor shall be deemed to grant hereunder,
and shall cause to be granted, Liens and security interests on such interest to
Administrative Agent, as security for the Obligations. Pledgor agrees to take,
and to cause to be taken, at its own cost and expense, such actions as
Administrative Agent shall deem necessary or appropriate to create, evidence,
and perfect such Liens and assure the first priority of such Liens.
ARTICLE IV. RIGHTS AND POWERS OF ADMINISTRATIVE AGENT
4.01. REMEDIES UPON DEFAULT. Administrative Agent, during the
continuance of an Event of Default and without liability to Pledgor, may without
notice or demand: obtain from any Person information regarding Pledgor, any
issuer of the Collateral, or any of their businesses, which information any such
Person also may furnish without liability to Pledgor or any other Person;
require Pledgor to give possession or control of any of the Collateral to
Administrative Agent; endorse as Pledgor's agent or attorney-in-fact any
instruments or documents representing proceeds of the Collateral; unless earlier
permitted hereunder, take control of funds generated by the Collateral and any
other proceeds, and exercise all other Rights which an owner of such Collateral
may exercise; at any time transfer any of the Collateral or evidence thereof
into its own name or that of its nominee; vote any Collateral and exercise any
Rights with respect thereto; and demand, collect, convert, redeem, receipt for,
settle, compromise, adjust, sue for, foreclose, or realize upon the Collateral,
in its own name for the benefit of Secured Parties, or in the name of Pledgor,
as Administrative Agent may determine. Neither Administrative Agent nor any
Secured Party shall be liable for failure to collect any Distribution or other
proceeds, or for any act or omission on the part of Administrative Agent, its
officers, agents, employees, or other representatives, except willful misconduct
and gross negligence. The foregoing Rights of Administrative Agent shall be in
addition to, and not a limitation upon, any Right of Administrative Agent given
by Law, elsewhere in this Agreement or any other Loan Papers, or otherwise.
4.02. RIGHT OF ADMINISTRATIVE AGENT TO NOTIFY ISSUERS. At any time
during the continuance of an Event of Default and at such other times as
Administrative Agent is entitled to receive Distributions and other property
constituting Collateral pursuant to the terms of this Agreement, Administrative
Agent may notify issuers of the Collateral to make payments of the applicable
Distributions directly to
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Administrative Agent and Administrative Agent may take control of all applicable
proceeds of any Collateral. Until Administrative Agent elects to exercise such
Right, during the continuance of an Event of Default, Pledgor, as agent of
Administrative Agent, shall collect and segregate all Distributions and other
amounts paid or distributed with respect to the Collateral.
4.03. DELIVERY OF RECEIPTS TO ADMINISTRATIVE AGENT. Upon Administrative
Agent's demand during the continuance of an Event of Default, Pledgor shall
deposit, upon receipt and in the form received, with any necessary endorsement,
all payments received as proceeds of or otherwise in connection with the
Collateral, in a special bank account in a bank of Administrative Agent's choice
over which Administrative Agent alone shall have power of withdrawal. The funds
in such account shall secure the Obligations. Administrative Agent is
authorized, and is hereby appointed during the continuance of an Event of
Default, Pledgor's attorney-in-fact, to make any endorsement in Pledgor's name
and behalf. Pending such deposit, Pledgor shall not mingle any such payments
with any of Pledgor's other funds or property, but shall hold them separate and
upon an express trust for Administrative Agent. During the continuance of an
Event of Default, Administrative Agent may from time to time apply the whole or
any part of the funds in the special account against the Obligations.
4.04. VOTING RIGHTS. It is expressly understood and agreed that Pledgor
shall retain all voting or management rights to the Collateral unless an Event
of Default shall exist and be continuing, at which time such voting rights shall
transfer to or be exercised as directed by Administrative Agent, at its sole
discretion; provided, however, that no voting or management rights shall be
exercised, vote cast, consent, waiver, or ratification given, or action taken by
Pledgor which would be inconsistent with or violate any provision of this
Agreement or any other Loan Paper.
4.05. REALIZATION UPON COLLATERAL. During the continuance of an Event of
Default, Administrative Agent, without notice or demand, but subject to any
limitations or restrictions imposed by applicable Law, may exercise any Right of
a secured party under the Uniform Commercial Code of Texas or any other
applicable jurisdiction ("UCC"), this Agreement, any other Loan Papers, or
otherwise and also may (i) require Pledgor to, and Pledgor hereby agrees that it
will at its expense and upon request of Administrative Agent forthwith, assemble
all or part of the Collateral as directed by Administrative Agent and make it
available to Administrative Agent at a place to be designated by Administrative
Agent which is reasonably convenient to both parties or (ii) without notice,
except as specified below, sell the Collateral or any portion thereof in one or
more parcels at public or private sale, at any of Administrative Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as Administrative Agent may deem commercially reasonable. Unless the
Collateral is of a type customarily sold on a recognized market, Administrative
Agent shall give Pledgor reasonable written notice of the time and place of any
public sale thereof or of the time after which any private sale or other
intended disposition thereof is to be made. Pledgor agrees that ten days advance
written notice thereof shall constitute reasonable notice. Administrative Agent
shall not be obligated to make any sale of Collateral, regardless of notice of
sale having been given. Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Expenses of retaking, holding, preparing for sale, selling, or
the like shall include Administrative Agent's reasonable attorneys' fees and
legal expenses, and constitute a portion of the Obligations. During the
continuance of an Event of Default, Administrative Agent shall be entitled to
immediate possession of all books and records maintained by Pledgor with respect
to the Collateral, and shall have the authority to enter upon any premises upon
which any of the
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same may be situated and remove the same therefrom without liability. Upon
disposition of Collateral during an Event of Default, Pledgor shall be entitled
to any surplus with respect to the Collateral following payment in full of the
Obligations and termination hereof, and shall be liable to Administrative Agent
for any deficiency with respect thereto. All cash proceeds received by
Administrative Agent upon any sale of, collection of, or other realization upon,
all or any part of the Collateral shall be applied as follows:
First: To the payment of all out-of-pocket expenses incurred in
connection with the sale of, collection of or other realization upon
Collateral, including reasonable attorneys' fees and disbursements;
Second: To the payment of the Obligations as provided in the Credit
Agreement and in such order and in such manner consistent with
applicable Laws as Administrative Agent in its discretion shall decide;
and
Third: To the extent of the balance (if any) of such proceeds, to the
payment to Pledgor or other Person legally entitled thereto.
Non-cash proceeds of any disposition of Collateral available to satisfy
the Obligations shall be applied to the Obligations in such order and in such
manner consistent with applicable Law as Administrative Agent in its discretion
shall decide.
4.06. SECURITIES AND OTHER LAWS; CONTRACTUAL RESTRICTIONS; REGISTRATION.
(a) Because of the Securities Act of 1933, as amended ("Securities
Act"), and other Laws, including without limitation state "blue sky" laws, or
contractual restrictions or agreements imposed upon certain Persons, there may
be legal restrictions or limitations affecting Administrative Agent in any
attempts to dispose of the Collateral and the enforcement of its Rights
hereunder. For these reasons, Administrative Agent is hereby authorized by
Pledgor, but not obligated, during the continuance of any Event of Default, to
sell or otherwise dispose of any of the Collateral at private sale, subject to
an investment letter, or in any other manner which will not require the
Collateral, or any part thereof, to be registered in accordance with the
Securities Act, or the rules and regulations promulgated thereunder, or any
other Law. Administrative Agent is also hereby authorized by Pledgor, but not
obligated, to take such actions, give such notices, obtain such consents, and do
such other things as Administrative Agent may deem required or appropriate under
the Securities Act or other securities Laws or other Laws or contractual
restrictions or agreements in the event of a sale or disposition of any
Collateral. Pledgor clearly understands that Administrative Agent may in its
discretion approach a restricted number of potential purchasers and that a sale
under such circumstances may yield a lower price for the Collateral than would
otherwise be obtainable if same were registered and sold in the open market. No
sale so made in good faith by Administrative Agent shall be deemed to be not
"commercially reasonable" because so made. Pledgor agrees that in the event
Administrative Agent shall, during the continuance of an Event of Default, sell
the Collateral or any portion thereof at any private sale or sales,
Administrative Agent shall have the Right to rely upon the advice and opinion of
appraisers and other Persons, which appraisers and other Persons are acceptable
to Administrative Agent, as to the best price reasonably obtainable upon such a
private sale thereof. In the absence of fraud, such reliance shall be evidence
that Administrative Agent handled such matter in a commercially reasonable
manner under applicable Law.
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(b) If Administrative Agent shall determine to exercise its Right to
sell any or all of the Collateral, and if in the opinion of counsel for
Administrative Agent it is necessary, or if in the opinion of Administrative
Agent it is advisable, to have the Collateral or that portion thereof to be
sold, registered under the provisions of the Securities Act, Pledgor will, to
the fullest extent it has the capability to do so, cause the issuers of the
Collateral contemplated to be sold to execute and deliver, and cause the
directors and officers of each thereof to execute and deliver, all at Pledgor's
expense, all such instruments and documents, and to do or cause to be done all
such other acts and things, as may be necessary or, in the opinion of
Administrative Agent advisable to register the Collateral or that portion
thereof to be sold, under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to remain
effective for such period as Administrative Agent may deem appropriate to
facilitate the sale or other disposition of such Collateral from the date of the
first public offering of the Collateral or that portion thereof to be sold, and
to make all amendments thereto and/or to the related prospectus which, in the
opinion of Administrative Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act. Pledgor shall use its best efforts
to cause each Issuer to comply with the provisions of the securities or "blue
sky" laws of any jurisdiction which Administrative Agent shall designate and to
cause each Issuer to make available to its security holders, as soon as
practicable, an earnings statement which will satisfy the provisions of the
Securities Act and applicable "blue sky" laws.
4.07. FURTHER APPROVALS REQUIRED.
(a) In connection with the exercise by Administrative Agent of its
Rights hereunder that effects the disposition of or use of any Collateral, it
may be necessary to obtain the prior consent, waiver or approval of Tribunals
and other Persons to a transfer or assignment of Collateral including, without
limitation, the FCC.
(b) Pledgor hereby agrees, during the continuance of an Event of
Default, to execute, deliver, and file, and hereby appoints (to the extent
permitted under applicable Law) Administrative Agent as its attorney-in-fact,
during the continuance of an Event of Default, to execute, deliver, and file on
Pledgor's behalf and in Pledgor's name, all applications, certificates, filings,
instruments, and other documents (including without limitation any application
for an assignment or transfer of control or ownership) that may be necessary or
appropriate, in Administrative Agent's opinion, to obtain such consents, waivers
or approvals. Pledgor acknowledges that there is no adequate remedy at Law for
failure by it to comply with the provisions of this Section 4.07 and that such
failure would not be adequately compensable in damages, and therefore agrees
that this Section 4.07 may be specifically enforced.
4.08. CONVERTIBLE SECURITIES. During the continuance of an Event of
Default, Administrative Agent may present for conversion any Collateral which is
convertible into any other instrument, investment security, or cash.
Administrative Agent shall not have any duty, however, to present for conversion
any of the Collateral, unless it shall have received from Pledgor detailed
written instructions to that effect at a time reasonably far in advance of the
final conversion date to make such conversion possible and such conversion does
not violate any provisions of any Loan Paper.
4.09. ISSUER LIABILITIES. By taking a security interest in the
Collateral pursuant to this Agreement, neither Administrative Agent nor any
Secured Party assumes, accepts, or becomes liable with respect to any debts,
liabilities, or obligations of or owed to any issuer of any Collateral.
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4.10. POWER OF ATTORNEY. PLEDGOR HEREBY IRREVOCABLY GRANTS TO
ADMINISTRATIVE AGENT PLEDGOR'S PROXY (EXERCISABLE FROM AND AFTER THE OCCURRENCE
OF AN EVENT OF DEFAULT WHICH IS CONTINUING) TO VOTE ANY COLLATERAL AND, DURING
THE CONTINUANCE OF AN EVENT OF DEFAULT, APPOINTS ADMINISTRATIVE AGENT PLEDGOR'S
ATTORNEY-IN-FACT TO PERFORM ALL OBLIGATIONS OF PLEDGOR UNDER THIS AGREEMENT AND
TO EXERCISE ALL OF ADMINISTRATIVE AGENT'S RIGHTS HEREUNDER. THE PROXY AND POWER
OF ATTORNEY HEREIN GRANTED, AND EACH STOCK, PARTNERSHIP INTEREST, OR LLC
MEMBERSHIP INTEREST POWER AND SIMILAR POWER NOW OR THEREAFTER GRANTED (INCLUDING
ANY EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE
IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL OF THE OBLIGATIONS.
ARTICLE V. MISCELLANEOUS
5.01. CUMULATIVE RIGHTS. All Rights of Administrative Agent and Secured
Parties under the Loan Papers are cumulative of each other and of every other
Right which Administrative Agent and Secured Parties may otherwise have at Law
or in equity or under any other contract or other writing for the enforcement of
the security interest herein or the collection of the Obligations. The exercise
of one or more Rights shall not prejudice or impair the concurrent or subsequent
exercise of any other Right.
5.02. ADMINISTRATIVE AGENT'S AND SECURED PARTIES' DUTIES. The powers
conferred on Administrative Agent hereunder are solely to protect Administrative
Agent's and Secured Parties' interest in the Collateral and shall not impose any
duty upon Administrative Agent or any Secured Party to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Administrative Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not Administrative Agent has or
is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve Rights against prior parties or any other Rights
pertaining to any reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Administrative Agent accords its own property.
Except as provided in this Section 5.02, Administrative Agent shall not have any
duty or liability to protect or preserve any Collateral or to preserve Rights
pertaining thereto. Nothing contained in this Agreement shall be construed as
requiring or obligating Administrative Agent or any Secured Party, and neither
Administrative Agent nor any Secured Party shall be required or obligated, to
(a) present or file any claim or notice or take any action, with respect to any
Collateral or in connection therewith or (b) notify Pledgor of any decline in
the value of any Collateral.
5.03. WAIVER. Should any part of the Obligations be payable in
installments, the acceptance by Administrative Agent or any Secured Party at any
time and from time to time of partial payment of the aggregate amount of all
installments then matured shall not be deemed as a waiver of any Event of
Default then existing. No waiver of any Event of Default shall be deemed to be a
waiver of any other subsequent Event of Default, nor shall any such waiver be
deemed to be a continuing waiver. No delay or omission by Administrative Agent
or any Secured Party in exercising any Right hereunder, or under any other Loan
Papers, shall impair any such Right or be construed as a waiver thereof or any
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
of Administrative Agent or any Secured Party hereunder or under such other
agreements.
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5.04. WAIVERS BY PLEDGOR. Pledgor waives notice of the creation,
advance, increase, existence, extension, or renewal of, or of any indulgence
with respect to, the Obligations; waives presentment, demand, notice of
dishonor, and protest; waives notice of the amount of the Obligations
outstanding at any time, notice of any Default or Event of Default, and all
other notices respecting the Obligations; and agrees that maturity of the
Obligations and any part thereof may be accelerated, extended, or renewed one or
more times by Secured Parties, in its or their discretion, without notice to
Pledgor. Pledgor waives (a) any claim that, as to any part of the Collateral, a
public sale, should Administrative Agent elect so to proceed, is, in and of
itself, not a commercially reasonable method of sale for such Collateral, (b)
except as otherwise provided in this Agreement, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH ADMINISTRATIVE
AGENT'S DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT
PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND
TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF
ADMINISTRATIVE AGENT'S RIGHTS HEREUNDER and (c) all rights of redemption,
appraisal or valuation.
5.05. OTHER PARTIES AND OTHER COLLATERAL. No renewal, increase, or
extension of or any other indulgence with respect to, the Obligations or any
part thereof, no release, exchange, or taking of any security, no release of any
Person (including Pledgor, any of Pledgor's Subsidiaries, maker, endorser,
guarantor, or surety) liable on the Obligations, no delay in enforcement of
payment, no delay or omission or lack of diligence or care in exercising any
Right or power with respect to the Obligations or any security therefor or
guaranty thereof or under this Agreement, and no other circumstance or event
which might constitute a defense available to or discharge of Pledgor, any of
Pledgor's Subsidiaries or any other Person, shall in any manner impair or affect
the Rights of Administrative Agent or any Secured Party hereunder, under any
other Loan Papers, at Law, or in equity. Neither Administrative Agent nor any
Secured Party need file suit or assert a claim for personal judgment against any
Person for any part of the Obligations or seek to realize upon any other
security for the Obligations, before foreclosing upon the Collateral for the
purpose of paying the Obligations. Pledgor waives any Right to the benefit of or
to require or control application of any other security or proceeds thereof, and
agrees that neither Administrative Agent nor any Secured Party shall have any
duty or obligation to Pledgor to apply any such other security or proceeds
thereof to the Obligations. Pledgor hereby waives all rights by which it might
be entitled to require suit on an accrued right of action in respect of any of
the Obligations or require suit against any of Pledgor's Subsidiaries, or
others, whether arising pursuant to Section 34.02 of the Texas Business and
Commerce Code, as amended, Section 17.001 of the Texas Civil Practice and
Remedies Code, as amended, or Rule 31 of the Texas Rules of Civil Procedure, as
amended, or otherwise.
5.06. CONTINUING SECURITY INTEREST. This Agreement constitutes a
continuing security interest in the Collateral, and shall remain in full force
and effect until final payment and performance in full of the Obligations, and
termination of all commitments and the other Loan Papers.
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5.07. RATE PROVISION. It is not the intention of any party to any Loan
Paper to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall Pledgor be obligated to pay any amount in
excess of the maximum amount of interest permitted under applicable Law. If from
any circumstances Administrative Agent or any Secured Party shall ever receive
anything of value deemed excess interest under applicable Law, an amount equal
to such excess shall be applied to the reduction of the outstanding balance of
the Obligations and any remainder shall be promptly refunded to the payor.
5.08. PARTIES BOUND. This Agreement shall be binding on Pledgor and its
successors, assigns, and other legal representatives, and shall inure to the
benefit of Administrative Agent and Secured Parties, and their respective
successors and assigns; provided, however, that Pledgor may not assign its
Rights or obligations hereunder without the prior written consent of
Administrative Agent. The Rights, powers, and interests held by Administrative
Agent and Secured Parties hereunder may be transferred or assigned, in whole or
in part, in accordance with the Credit Agreement, without the consent of
Pledgor.
5.09. NOTICES AND DELIVERIES.
(a) MANNER OF DELIVERY. All notices, communications and materials to be
given or delivered pursuant to this Agreement shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent or Pledgor has acted in reliance on such telephonic notice.
(b) ADDRESSES. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
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(i) if to Pledgor, to it at:
c\o IXC Communications, Inc.
1122 Capital of Texas Highway South
Austin, Texas 78746
Telephone No.: (512) 427-3713
Telecopier No.: (512) 328-0239
Attention: Mr. James F. Guthrie
Executive Vice President and
Chief Financial Officer
With a copy (which shall not constitute notice) to:
Riordan & McKinzie
A Professional Corporation
695 Town Center Drive, Suite 1500
Costa Mesa, CA 92626
Telephone No.: (714) 433-2900
Facsimile No.: (714) 549-3244
Attention: Mike Whalen, Esq.
(ii) If to the Administrative Agent:
NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214)508-0988
Facsimile: (214)508-9390
Attention: Ms. Roselyn Drake, Vice President
with a copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Telephone: (214) 698-3814
Telecopy: (214) 744-0231
Attention: Melissa R. Stewart, Esq.
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or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address."
(c) EFFECTIVENESS. Each notice, communication and any material to be
given or delivered to Administrative Agent or Pledgor pursuant to this Agreement
shall be effective or deemed delivered or furnished (i) if sent by mail, on the
fifth Business Day after such notice, communication or material is deposited in
the mail, addressed as above provided, (ii) if sent by telecopier, when such
notice, communication or material is transmitted to the appropriate number
determined as above provided in this Section 5.09 and the appropriate receipt is
received or otherwise acknowledged, (iii) if sent by hand delivery or overnight
courier, when left at the address of the addressee addressed as above provided,
and (iv) if given by telephone, when communicated to the individual or any
member of the department specified as the individual or department to whose
attention notices, communications and materials are to be given or delivered
except that notices of a change of address, telecopier or telephone number or
individual or department to whose attention notices, communications and
materials are to be given or delivered shall not be effective until received.
5.10. MODIFICATIONS; AMENDMENTS; ETC. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by Pledgor here
from, shall in any event be effective unless the same shall be in writing and
signed by Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
5.11. FINANCING STATEMENT. A carbon, photographic, or other reproduction
of this Agreement or any financing statement covering the Collateral shall be
sufficient as a financing statement. Pledgor hereby authorizes Administrative
Agent to file one or more financing or continuation statements, and amendments
thereto, relating to any Collateral, without the signature of Pledgor where
permitted by Law.
5.12. DEFINITIONS. Unless otherwise defined in this Agreement, terms
used herein shall have the meanings set forth in the Credit Agreement. Unless
the context indicates otherwise or the terms are otherwise defined herein,
definitions in the UCC apply to words and phrases in this Agreement. "Pledgor"
and "Issuer" include, without limitation, such Person, such Person's heirs,
successors and assigns, such Person as a debtor-in-possession, and any receiver,
trustee, liquidator, conservator, custodian, or similar party appointed for such
Person or all or substantially all of its assets under any Law.
5.13. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part thereof, and the remaining provisions thereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance therefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to the illegal, invalid, or unenforceable
provision as may be possible.
5.14. COUNTERPARTS. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
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5.15. CONTROL.
(a) Notwithstanding anything herein to the contrary, this Agreement, the
other Loan Papers, and the transactions contemplated hereby and thereby (i)
prior to a foreclosure of the Liens granted under this Agreement and the other
Loan Papers, do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of Pledgor, any issuer of any Collateral or any Subsidiary of Pledgor by
Administrative Agent or Secured Parties, or control, affirmative or negative,
direct or indirect, by Administrative Agent or Secured Parties over the
management or any other aspect of the operation of Pledgor, any issuer of
Collateral or any Subsidiary of Pledgor which ownership and control remains
exclusively and at all times in Pledgor such Subsidiary of Pledgor or any issuer
of Collateral, and (ii) do not and will not constitute the transfer, assignment,
or disposition in any manner, voluntarily or involuntarily, directly or
indirectly, of any license or certificate at any time issued by the FCC or other
applicable Tribunal to Pledgor, any issuer of Collateral or any Subsidiary of
Pledgor ("License"), or the transfer of control of Pledgor, any issuer of
Collateral or any Subsidiary of Pledgor within the meaning of Section 310(d) of
the Communications Act of 1934, as amended, or any other applicable laws.
(b) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of any
right to vote or consent with respect to, any of the Collateral, as provided
herein or any other action taken or proposed to be taken by Administrative Agent
hereunder which would affect the operational, voting, or other control of
Pledgor, any Subsidiary of Pledgor or any issuer of Collateral or any Subsidiary
of any issuer of Collateral, shall be in accordance with applicable Law.
(c) Subject to Section 5.15(e), if an Event of Default shall have
occurred and be continuing, Pledgor shall take any action which Administrative
Agent may reasonably require in order to transfer and assign to Administrative
Agent, or to such one or more third parties as Administrative Agent may
designate or to a combination of the foregoing, each License of the Pledgor,
each Subsidiary or any issuer of the Collateral. To enforce the provisions of
this Section 5.15, Administrative Agent is empowered, during the continuance of
an Event of Default, to require the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek from the FCC
or other applicable Tribunal an involuntary transfer of control of each such
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. Pledgor hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed
and, if Pledgor shall refuse to authorize the transfer, its approval may be
required by the court. Upon the occurrence and during the continuance of an
Event of Default, Pledgor shall further use its best efforts to assist in
obtaining approval of the FCC or other applicable Tribunal, if required, for any
action or transactions contemplated by this Agreement, including, without
limitation, the preparation, execution, and filing with the FCC or other
applicable Tribunal of the assignor's or transferor's portion of any application
or applications for consent to the assignment of any License or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
other applicable Tribunal for approval of the transfer or assignment of any
portion of the Collateral, together with any License.
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(d) Pledgor acknowledges that the assignment or transfer of each License
of Pledgor, each Subsidiary and issuer of the Collateral is integral to
Administrative Agent's and Secured Parties' realization of the value of the
collateral pledged by Pledgor, that there is no adequate remedy at law for
failure by Pledgor to comply with the provisions of this Section 5.15 and that
such failure would not be adequately compensable in damages, and therefore
agrees, without limiting the right of Administrative Agent to seek and obtain
specific performance of other obligations of Pledgor contained in this
Agreement, that the agreements contained in this Section 5.15 may be
specifically enforced.
(e) Notwithstanding anything to the contrary contained in this Agreement
or in any other Loan Paper, Administrative Agent shall not, without first
obtaining the approval of the FCC or any other applicable Tribunal, take any
action pursuant to this Agreement which would constitute or result in any
assignment of a License of Pledgor, each Subsidiary or issuer of the Collateral
or any change of control of Pledgor, any Subsidiary of Pledgor or any issuer of
any Collateral or any Subsidiary of any issuer of Collateral, if such assignment
or change in control would require, under then existing Law (including the
written rules and regulations promulgated by the FCC or other applicable
Tribunal), the prior approval of the FCC or such other Tribunal.
5.16. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (OTHER THAN THE
CONFLICT OF LAWS RULES THEREOF AND EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF TEXAS).
5.17. WAIVER OF JURY TRIAL. ADMINISTRATIVE AGENT AND PLEDGOR HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.
5.18. ADMINISTRATIVE AGENT'S RIGHT TO USE AGENTS. Administrative Agent
may exercise its Rights under this Agreement through an agent or other designee.
5.19. NO INTERFERENCE, COMPENSATION OR EXPENSE. Administrative Agent may
exercise its Rights under this Agreement (a) without resistance or interference
by Pledgor and (b) without payment of any rent, license fee or compensation of
any kind to Pledgor.
5.20. WAIVER OF SUBROGATION. Pledgor shall not assert, enforce, or
otherwise exercise (a) any right of subrogation to any of the rights or Liens of
Administrative Agent or any Secured Party or any other Person against Pledgor,
any of Pledgor's Subsidiaries or any other Person on all or any part of the
Obligations or any collateral or other security, or (b) any right of recourse,
reimbursement, contribution, indemnification, or similar right against Pledgor,
any of Pledgor's Subsidiaries or any other Person on all or any part of the
Obligations or any collateral or any security, and Pledgor hereby agrees not to
exercise any and all of the foregoing rights, and any right to participate in,
any collateral or other security given to Administrative Agent or any Secured
Party or any other Person to secure payment of the Obligations,
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however any such rights arise, whether hereunder or any other Loan Paper or by
operation of Law until the Obligation shall have been paid indefeasibly in full
in cash and no commitments of any Lender remain outstanding; and thereafter
Pledgor will be subrogated to the position of the Lenders to the extent of the
payments made by Pledgor. If any amount shall be paid to Pledgor in violation of
the preceding sentence and the Obligation shall not have been paid indefeasibly
in full in cash or any commitment of any Lender shall remain outstanding, such
amount shall be deemed to have been paid to Pledgor for the benefit of, and held
in trust for the benefit of, the Lenders, and shall forthwith be paid to the
Administrative Agent to be credited and applied upon the Obligation, whether
matured or unmatured, in accordance with the terms of the Credit Agreement. The
provisions of this Section 5.20 shall survive the termination of this Agreement,
and any satisfaction and discharge of Pledgor and each other Person by virtue of
any payment, court order, or Law.
5.21. LOAN PAPER. This Agreement is a Loan Paper executed pursuant to
the Credit Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions
thereof.
5.22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
5.23. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER
LOAN PAPERS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
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IN WITNESS WHEREOF, Pledgor has executed this Pledge Agreement as of the
date first set forth above.
IXC COMMUNICATIONS SERVICES, INC.
____________________________________
By: ________________________________
Its: _______________________________
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EXHIBIT 99.1
IXC COMMUNICATIONS, INC. ANNOUNCES $600 MILLION CREDIT FACILITY
AUSTIN, Texas,-- (Business Wire)--Oct. 28, 1998--IXC Communications Inc.
(NASDAQ:IIXC) today announced that it has executed a syndicated $600 million
credit agreement arranged by NationsBanc Montgomery Securities L.L.C.
The agreement provides for IXC to obtain a senior secured credit
facility consisting of a $150 million revolver, a $200 million term loan and an
uncommitted special purpose loan facility of $250 million. The administrative
agent is NationsBank, N.A., which is joined by a syndicate of financial
institutions including Credit Suisse First Boston, Goldman Sachs Credit Partners
L.P., TD Securities (USA) Inc., and Export Development Corporation ("EDC").
IXC expects to use the proceeds for capital expenditures, primarily
related to purchases of optronics and switch capacity to support expected
revenue growth. The facility has a five-year term and provides for prime or
LIBOR rate interest options at IXC's election.
"We are extremely pleased to have completed this credit facility, which
constitutes the third step in our refinancing plan, designed to further
strengthen the Company's capital structure and provide greater financial
flexibility," said Jim Guthrie, IXC's executive vice president and chief
financial officer. "This facility and the quality of our bank group demonstrate
the confidence the financial community places on IXC and its strategic plan and
growth prospects."
IXC's network-based delivery solutions are designed to address the speed
and capacity requirements of the global communications market. Having completed
the first new coast-to-coast fiber optic network in the United States in more
than a decade, IXC Communications Inc. is at the forefront of the industry's new
class of emerging domestic and international carriers. IXC offerings include
private line, broadband, Internet and long distance switched and dedicated
services. IXC is a publicly traded company listed on Nasdaq under the symbol
IIXC. IXC's Web site is at www.ixc-comm.com.
###
CONTACT: IXC Communications Inc., Austin
Melissa Jackson, 512/231-5247 (Media Contact)
[email protected]
or
Greta Wiechman, 888/267-9478 (Investor Contact)
[email protected]
5.
