<PAGE> PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number 0-6547
MCI COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-0886267
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (202) 872-1600
N/A
(Former name, former address and former fiscal year, if changed
since last report).
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
As of June 30, 1994, there were outstanding 539,675,681 shares of
the registrant's common stock.
<PAGE> PAGE 2
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
F O R M 1 0 - Q
For The Quarter Ended June 30, 1994
INDEX
Page No.
--------
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Balance Sheet at June 30, 1994 and December 31, 1993 3-4
Income Statement for the three and six months ended
June 30, 1994 and 1993 5
Statement of Cash Flows for the six months ended
June 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7-11
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12-20
PART II: OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 21
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 22
SIGNATURE 23
<PAGE> PAGE 3
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BALANCE SHEET
(unaudited)
June 30, December 31,
1994 1993
------------ ------------
(In millions)
Assets
Current assets:
Cash and cash equivalents $ 64 $ 165
Receivables, net of allowance for
uncollectibles of $255 and $211 million 2,272 2,131
Other 333 305
------- -------
Total current assets 2,669 2,601
------- -------
Communications system:
System in service 9,348 8,563
Other property and equipment 2,272 2,172
------- -------
Total communications system in service 11,620 10,735
Accumulated depreciation (4,484) (4,297)
Construction in progress 1,031 883
------- -------
Total communications system, net 8,167 7,321
------- -------
Other assets:
Excess of cost over net assets acquired, net 1,110 1,093
Other assets and deferred charges, net 346 261
------- -------
Total other assets 1,456 1,354
------- -------
Total assets $12,292 $11,276
======= =======
See accompanying Notes to Consolidated Financial Statements
<PAGE> PAGE 4
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BALANCE SHEET
(unaudited)
June 30, December 31,
1994 1993
------------ ------------
(In millions)
Liabilities and stockholders' equity
Current liabilities:
Accrued telecommunications expense $ 1,443 $ 1,507
Accounts payable 673 742
Long-term debt due within one year 119 215
Other accrued liabilities 917 737
------- -------
Total current liabilities 3,152 3,201
------- -------
Noncurrent liabilities:
Long-term debt 3,035 2,366
Deferred income taxes 1,008 927
Other 56 69
------- -------
Total noncurrent liabilities 4,099 3,362
------- -------
Stockholders' equity:
Series D convertible preferred stock, $.10 par
value, authorized and outstanding 13,736 shares 1 1
Common stock, $.10 par value, authorized 800
million shares, issued 592 million shares 60 60
Additional paid in capital 2,581 2,493
Retained earnings 3,195 2,785
Treasury stock at cost, 52 and 51 million shares (796) (626)
------- -------
Total stockholders' equity 5,041 4,713
------- -------
Total liabilities and stockholders' equity $12,292 $11,276
======= =======
See accompanying Notes to Consolidated Financial Statements
<PAGE> PAGE 5
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
(In millions, except per share amounts)
(unaudited)
Three months Six months
ended ended
June 30, June 30,
------------- ------------
1994 1993 1994 1993
---- ---- ---- ----
Revenue:
Sales of communication services $3,309 $2,929 $6,530 $5,739
------ ------ ------ ------
Operating Expenses:
Telecommunications 1,715 1,573 3,387 3,078
Sales, operations and general 933 772 1,839 1,504
Depreciation 272 236 536 469
------ ------ ------ ------
Total operating expenses 2,920 2,581 5,762 5,051
------ ------ ------ ------
Income from operations 389 348 768 688
Interest expense 40 52 71 110
Other expense, net 7 9 15 20
------ ------ ------ ------
Income before income taxes and
extraordinary item 342 287 682 558
Income tax provision 127 109 258 212
------ ------ ------ ------
Income before extraordinary item 215 178 424 346
Extraordinary loss on early debt retirement,
less applicable income tax benefit - 28 - 45
------ ------ ------ ------
Net income $ 215 $ 150 $ 424 $ 301
====== ====== ====== ======
Dividends on preferred stock 1 1 1 1
------ ------ ------ ------
Earnings applicable to
common stockholders $ 214 $ 149 $ 423 $ 300
====== ====== ====== ======
Earnings per common and common
equivalent shares:
Income before extraordinary item $ .37 $ .32 $ .73 $ .63
Loss on early debt retirement - .05 - .08
------ ------ ------ ------
Total $ .37 $ .27 $ .73 $ .55
====== ====== ====== ======
Weighted average number of shares
of common stock and common stock
equivalents outstanding 575 554 577 545
Dividends declared per common share $ .025 $ .025 $ .025 $ .025
See accompanying Notes to Consolidated Financial Statements
<PAGE> PAGE 6
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
(unaudited)
Six months ended
June 30,
------------------
1994 1993
---- ----
(In millions)
Operating activities:
Cash received from customers $6,461 $5,634
Cash paid to suppliers and employees (5,229) (4,292)
Taxes paid (147) (139)
Interest paid (34) (94)
------ ------
Cash from operating activities 1,051 1,109
------ ------
Investing activities:
Cash outflow for communications system (1,394) (987)
Businesses and investments acquired (190) (35)
Other, net (4) -
------ ------
Cash used for investing activities (1,588) (1,022)
------ ------
Net cash flow before financing activities (537) 87
------ ------
Financing activities:
Issuance of Senior Notes and other debt 938 757
Retirement of Senior Notes and other debt (153) (1,356)
Commercial paper and bank credit facility
activity, net (239) (258)
Purchase of treasury stock (230) (103)
Issuance of preferred stock - 830
Issuance of common stock for employee plans 134 185
Payment of dividends on common stock (14) -
------ ------
Cash from financing activities 436 55
------ ------
Net (decrease) increase
in cash and cash equivalents (101) 142
Cash and cash equivalents - beginning balance 165 232
------ ------
Cash and cash equivalents - ending balance $ 64 $ 374
====== ======
See accompanying Notes to Consolidated Financial Statements
<PAGE> PAGE 7
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: GENERAL
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Quarterly Reports on Form
10-Q. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of the financial
position, results of operations and cash flows for the interim periods
presented have been made. These financial statements should be read in
conjunction with the company's Annual Report on Form 10-K for the year ended
December 31, 1993.
NOTE 2: LONG-TERM DEBT AND CREDIT FACILITY
In March 1994, the company issued $450 million principal amount of 7 3/4%
Senior Debentures due March 23, 2025, $300 million principal amount of 6 1/4%
Senior Notes due March 23, 1999 and $200 million principal amount of Senior
Floating Rate Notes due March 16, 1999 (Senior Floating Rate Notes). A
substantial portion of the net proceeds from these issuances was used to
repay commercial paper borrowings while the remaining proceeds were invested
in short-term interest-bearing securities to be available for general
corporate purposes. These debt issuances utilized the company's remaining
amount available under its existing shelf registration. During the first six
months of 1994, the company also repaid $83 million of Senior Notes, leaving
$2,395 million of debt securities outstanding at a weighted average interest
rate of 7.11% as of June 30, 1994.
In conjunction with the issuance of the Senior Floating Rate Notes, the
company entered into an interest rate swap agreement for a notional principal
amount of $200 million which will result in an effective fixed interest cost
of 6.37% with respect to the Senior Floating Rate Notes.
On July 8, 1994 the company executed a $2.0 billion bank credit facility
agreement which expires in July 1999 and replaces its previous $1.25 billion
bank credit facility. It will support the company's commercial paper program
and will be used, in conjunction with this program, to fund short-term
fluctuations in working capital and for other general corporate requirements.
At June 30, 1994 there were no amounts outstanding under the previous credit
facility.
During the six months ended June 30, 1994, the company issued $3,207 million
and repaid $3,446 million of commercial paper borrowings leaving no
commercial paper borrowings outstanding at June 30, 1994. Borrowings under
the commercial paper program are classified as noncurrent if the remaining
term of the credit facility agreement exceeds one year, and the unused
commitment thereunder equals or exceeds the amount of commercial paper then
outstanding.
<PAGE> PAGE 8
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 3: STOCKHOLDERS' EQUITY
Changes in total stockholders' equity are:
Total
Preferred Common Addit'l Treasury Stock-
Stock Stock Paid in Retained Stock, holders'
Par Value Par Value Capital Earnings at Cost Equity
--------- --------- ------- -------- -------- --------
(In millions)
Balance at
December 31, 1993 $1 $60 $2,493 $2,785 ($626) $4,713
Net income - - - 424 - 424
Common stock issued
for employee stock
and benefit plans
(8.7 million shares) - - 88 - 62 150
Treasury stock purchased
(9.6 million shares) - - - - (232) (232)
Common and preferred
dividends declared - - - (14) - (14)
--- --- ------ ------ ---- ------
Balance at
June 30, 1994 $1 $60 $2,581 $3,195 ($796) $5,041
=== === ====== ====== ==== ======
In June 1994, the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act expired and the 13,736 shares of Series D convertible
preferred stock owned by British Telecommunications plc automatically converted
into a right to receive, upon the surrender to the company of the certificate
for the preferred stock shares, approximately 27.5 million shares of the
company's common stock (see Note 6 of the Notes to the Consolidated Financial
Statements in this Quarterly Report on Form 10-Q).
<PAGE> PAGE 9
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 4: CASH FLOW INFORMATION
The reconciliation of net income in the Income Statement to cash from
operating activities in the Statement of Cash Flows is as follows:
Six months ended
June 30,
-----------------
1994 1993
---- ----
(In millions)
Net income $ 424 $ 301
Adjustments to earnings:
Depreciation and amortization 556 499
Deferred income tax provision 110 114
Net change in operating activity accounts
other than cash and cash equivalents:
Receivables (141) (115)
Accounts payable 101 277
Other operating activity accounts 1 33
------ ------
Cash from operating activities $1,051 $1,109
====== ======
NOTE 5: ADOPTION OF NEW ACCOUNTING STANDARDS
Effective January 1, 1994, the company adopted two new Statements of Financial
Accounting Standards: Number 112, Employers' Accounting for Postemployment
Benefits (SFAS 112), and Number 115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS 115).
SFAS 112 requires that if defined conditions are met, certain postemployment
benefits, such as continuation of insurance coverage, should be estimated and
accrued, rather than recognized as an expense when paid. Adoption of this
standard did not have a material impact on the company's financial position or
results of operations.
SFAS 115 established new accounting and reporting requirements for certain
investments in debt and equity securities. At the time of adoption of this new
standard, the company did not have any investments that met the requirements of
SFAS 115. However, this standard will be applied to applicable investments that
may arise in the future.
<PAGE> PAGE 10
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 6: BRITISH TELECOMMUNICATIONS PLC AGREEMENTS
In June 1993, the company and British Telecommunications plc (BT and with the
company, collectively, the Parties) entered into a letter of intent and an
agreement for the purchase by BT of 13,736 shares of Series D non-voting
convertible preferred stock (preferred stock) of the company at $60,400 per
share. Upon termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act (HSR Act) in June 1994, the preferred stock
automatically converted into a right to receive, upon the surrender to the
company of the certificate for the preferred stock shares, approximately 27.5
million shares of the company's common stock. BT has agreed not to transfer
such common stock until June 1995 and thereafter may transfer such shares
subject to compliance with registration requirements of U.S. federal securities
laws. Each share of the company's common stock so issuable will be exchanged
for one share of a new class of voting common stock (Class A Common Stock) of
the company upon consummation of the transactions contemplated by the definitive
agreements which were entered into by the Parties in August 1993 and which
superseded the letter of intent.
The definitive agreements provide for, among other things, (a) the purchase by
BT at closing of a number of shares of Class A Common Stock for approximately
$3.5 billion in cash, (b) the formation of an international joint venture
between BT and the company to provide global enhanced and value-added
telecommunications services and (c) several other transactions, including the
January 31, 1994 purchase of substantially all of the operations of BT North
America Inc. by the company for $108 million.
The Class A Common Stock to be issued to BT under the definitive agreements
will represent approximately 20% of the company's outstanding common stock.
The Class A Common Stock will be equivalent on a per share basis to the
existing common stock of the company, except with respect to voting rights.
BT's ownership of the Class A Common Stock shares will entitle it to
proportionate representation on the company's board of directors, which
currently equates to three seats. In addition to board representation, BT will
be entitled to investor protections with respect to certain corporate actions of
the company. Any shares of Class A Common Stock would automatically convert
into common stock on transfer. The conditions to the transactions relating to
approval by the company's stockholders, required approvals by the European
Commission, United Kingdom regulatory authorities and Federal Communications
Commission, and expiration of waiting periods under the HSR Act and Exon-Florio
statute have each been obtained. Accordingly, the company anticipates receipt
of the $3.5 billion by the fourth quarter 1994. This payment, when added to
the purchase price for the preferred stock, results in a purchase price of
the Class A Common Stock of $32 per share.
The Parties plan to invest approximately $1 billion in the joint venture,
recently named Concert***, over the next five years. At inception, BT will hold
75.1% of the new venture's equity, with the company holding the remainder. Each
of the Parties will be exclusive distributors in their respective territories
for marketing the global services of the joint venture.
<PAGE> PAGE 11
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 7: JOINT VENTURE WITH GRUPO FINANCIERO BANAMEX-ACCIVAL
In January 1994, the company announced its intention to form a joint venture
with Grupo Financiero Banamex-Accival (Banacci) to provide competitive
domestic and international long-distance telecommunications services in
Mexico. Subject to the grant of a concession from the government of Mexico,
which is anticipated later in 1994, the joint venture will provide competitive
switched telecommunications services commencing in late 1996. The joint
venture will be 55 percent owned by Banacci and 45 percent by the company.
The company plans to make available certain technology to the joint venture
which will facilitate the completion of the company's integrated North
American network. The total cash investment to be made by the company, over
the next several years, is expected to approximate $450 million, of which $150
million will be made in 1994.
The transactions with Banacci are subject to the execution of definitive
agreements and the satisfaction of various other conditions, including the
receipt of regulatory approvals which have not yet been obtained.
<PAGE> PAGE 12
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
OVERVIEW
- --------
Earnings Summary
- ----------------
For the three and six months ended June 30, 1994, net income was $215 million
and $424 million, respectively, compared to $150 million and $301 million for
the same periods in 1993. Net income for the three and six months ended
June 30, 1993 reflect extraordinary charges of $28 million and $45 million,
respectively, net of tax benefits, for losses on the early retirement of debt.
Earnings per common and common equivalent shares for the three and six months
ended June 30, 1994 were $.37 and $.73, respectively. This compares to
earnings per common and common equivalent shares of $.32 and $.63, respectively,
before the extraordinary item and $.27 and $.55, respectively, after the
extraordinary item for the same periods in 1993. The company declared and paid
a common stock dividend, of $.025 per share, in June 1994.
The company operates in a single industry segment, the long-distance
telecommunications industry. More than 90% of the company's operating revenues
and identifiable assets relate to the company's activities in this industry.
British Telecommunications plc Investment
- -----------------------------------------
In August 1993, the company and British Telecommunications plc (BT) entered into
a definitive agreement providing for a total investment by BT of $4.3 billion in
exchange for a 20% voting interest in the company. In June 1993, British
Telecommunications plc (BT) purchased $830 million of newly issued shares of
convertible preferred stock (preferred stock). This preferred stock
automatically converted into a right to receive, upon the surrender to the
company of the certificate for the preferred stock shares, approximately 27.5
million shares of the company's common stock upon the termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act in June 1994.
Upon receipt of the remaining $3.5 billion from BT for the purchase of
approximately 106.8 million shares of a new class of voting stock of the company
(Class A Common Stock), each share of the company's common stock so issuable
will be exchanged for one share of Class A Common Stock. The company
anticipates receipt of this payment by the fourth quarter 1994 (see Note 6 of
the Notes to Consolidated Financial Statements included in this Quarterly Report
on Form 10-Q).
The company and BT also entered into several other definitive agreements in
August 1993, one of which provided for the formation of a joint venture,
recently named Concert, to provide global enhanced and value-added
telecommunications services. The company expects to invest approximately $250
million in this venture over the next five years. Another agreement provided
for the company's purchase of substantially all of the operations of BT North
America Inc. (BTNA), a data services provider. This transaction was completed
on January 31, 1994 for a purchase price of $108 million and was funded by
proceeds from the issuance of commercial paper and cash from operations.
<PAGE> PAGE 13
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
networkMCI* Initiatives
- -----------------------
In January 1994, the company announced networkMCI, its long-term strategic
vision. Initiatives relating to networkMCI will involve a variety of
activities, including the expansion of the company's network to create and
deliver a wide variety of new branded services. The company estimates that
networkMCI will involve substantial investment through the end of the decade, a
portion of which is expected to be provided by other investors.
One of the announced networkMCI initiatives is the implementation of high-speed
Synchronous Optical Network (SONET) technology throughout the company's domestic
network and on international routes across the Atlantic and Pacific. In
addition to the implementation of SONET technology, the company plans to
increase its network switching capabilities through the implementation of
Asychronous Transfer Mode (ATM) technology, which enables a wide range of data
communications and wireless communications. The company also announced the
creation of MCI Metro Inc. (MCI Metro), a new subsidiary that will construct
fiber rings and local switching infrastructure in major U.S. metropolitan
markets over the next several years. This initiative is intended to make local
access facilities available to long-distance telecommunications carriers at a
reasonable cost and, subject to regulatory constraints, permit MCI Metro to
compete in the local telecommunications services market. The total investment
in MCI Metro will be up to $2 billion over the next several years, a portion of
which is expected to be provided by other investors.
In January 1994, the company also announced its plans to form a joint venture
with Grupo Financiero Banamex-Accival (Banacci) to provide competitive domestic
and international long-distance telecommunications services in Mexico. The
company's total planned investment in the joint venture will be $450 million
over the next several years. The transaction with Banacci is subject to the
execution of definitive agreements and the satisfaction of various other
conditions, including the receipt of regulatory approvals which have not been
obtained (see Note 7 of the Notes to the Consolidated Financial Statements
included in this Quarterly Report on Form 10-Q).
In February 1994, the company signed a letter agreement with Nextel
Communications, Inc. (Nextel) contemplating a $1.3 billion investment by the
company in Nextel.
The company expects to fund the aforementioned investments from operating cash
flow, the proceeds from the remaining BT investment and access to the capital
markets.
<PAGE> PAGE 14
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Results of Operations
- ---------------------
Income from Operations Increase for the Increase for the
(In millions, except % change) Three months ended Six months ended
June 30, June 30,
1994 vs. 1993 1994 vs. 1993
-------------------- -----------------
Revenue:
Sales of communications services $ 380 13.0% $ 791 13.8%
---- ----- ---- -----
Operating expenses:
Telecommunications 142 9.0% 309 10.0%
Sales, operations and general 161 20.9% 335 22.2%
Depreciation 36 15.3% 67 14.3%
---- ----- ---- -----
Total operating expenses 339 13.1% 711 14.1%
---- ----- ---- -----
Income from operations $ 41 11.8% $ 80 11.6%
==== ===== ==== =====
Revenue
- -------
The growth in revenue for the three and six months ended June 30, 1994, versus
the same periods in 1993, is primarily due to the continued growth in traffic
volumes. This traffic volume growth was 14.4% and 15.3% in the second quarter
and first six months of 1994, respectively, versus the corresponding periods
in 1993. The gap between traffic and revenue growth is due to the impact of
various product promotions and discounts, offset by increases in
international revenue, tariffed rates, 1-800-COLLECT** and 800 portability
related revenue, and increases in data products revenue.
Year-over-year revenue from the consumer market for the three and six months
ended June 30, 1994 showed continued growth of the company's Friends &
Family** product. Contributing to this growth was an increase in
international volumes resulting from the company's sales and marketing efforts
and product enhancements in this area. The company's collect-calling product,
1-800-COLLECT, introduced in May 1993, also contributed to the growth.
<PAGE> PAGE 15
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Revenue (continued)
- -------------------
In the business market, revenue and traffic volume grew in the three and six
months ended June 30, 1994, versus the corresponding periods in 1993. The
primary component of this growth was traffic and revenue derived from the
company's MCI Vision** and MCI Preferred** products, particularly the 800
components of these products. This 800 growth is primarily attributable to the
increase in signed contracts following the Federal Communications Commission's
800 portability ruling which took effect in May 1993. Growth in these products
is also attributable to the company's Proof Positive* service, introduced in
mid-1993, as well as increased sales and marketing efforts.
The company's various data products also experienced growth during the three
and six months ended June 30, 1994, primarily attributable to the impact of the
company's purchase of BTNA, in January 1994.
Telecommunications Expense
- --------------------------
Telecommunications expense for the three and six months ended June 30, 1994
increased versus the corresponding periods in 1993, primarily because of volume
increases in both international and domestic traffic, partially offset by
reductions in international settlement rates and domestic access rates. As a
result of these reductions, telecommunications expense as a percentage of
revenue decreased to 51.8% and 51.9% for the second quarter and first six months
of 1994, respectively, compared to 53.7% and 53.6% for the corresponding
periods in 1993.
Sales, Operations and General
- -----------------------------
The increase in sales, operations and general expenses for the three and six
months ended June 30, 1994 versus the corresponding periods in 1993 is primarily
attributable to higher personnel costs and higher levels of advertising and
related marketing costs. The increase in personnel costs is primarily
associated with the introduction of new products such as Proof Positive and
increases in customer service, sales and sales support staff. The increase in
advertising and related marketing costs is due to the introduction of Friends &
Family II, networkMCI, Best Friends* and WorldPhone** and the impact of costs
associated with the company's Proof Positive and 1-800-COLLECT programs.
Accordingly, sales, operations and general expenses as a percentage of revenue
increased to 28.2% and 28.1% for the second quarter and first six months of
1994 compared to 26.3% and 26.2% for the corresponding periods of 1993.
<PAGE> PAGE 16
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Depreciation Expense
- --------------------
The increase in depreciation expense for the three and six months ended June 30,
1994 versus the corresponding periods in 1993 is primarily due to additions to
the company's communications network.
Interest Expense
- ----------------
Interest expense was $40 million and $71 million for the three and six months
ended June 30, 1994 versus $52 million and $110 million for the corresponding
periods in 1993. This decrease primarily reflects the interest savings as a
result of retirements and redemptions of debt during the first and second
quarters of 1993, offset by the issuance of $950 million of debt securities in
late March 1994.
<PAGE> PAGE 17
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
LIQUIDITY AND FINANCIAL CONDITION
- ---------------------------------
Balance Sheet
- -------------
(In millions, June 30, Dec. 31,
except % change) 1994 1993 $ change % change
-------- -------- -------- --------
Current assets $ 2,669 $ 2,601 $ 68 2.6%
Communications system, net 8,167 7,321 846 11.6%
Other assets 1,456 1,354 102 7.5%
------- ------- ------ -----
Total assets $12,292 $11,276 $1,016 9.0%
======= ======= ====== =====
Current liabilities $ 3,152 $ 3,201 $ (49) (1.5%)
Noncurrent liabilities 4,099 3,362 737 21.9%
Stockholders' equity 5,041 4,713 328 7.0%
------- ------- ------ -----
Total liabilities and
stockholders' equity $12,292 $11,276 $1,016 9.0%
======= ======= ====== =====
The slight increase in current assets during the six months ended June 30,
1994, is primarily the result of an increase in accounts receivable offset
by a decrease in cash and cash equivalents. The increase in accounts
receivable is associated with the increased revenue reported during 1994.
The decrease in cash and cash equivalents is a result of a decrease in cash
received from operations and an increase in cash used for investing
activities.
The net communications system increase is a result of the company's continued
investment in its transmission and switching facilities to meet customers'
demands for new services, redundancy and enhanced network intelligence offset
by the impact of depreciation charges for the six months ended June 30, 1994.
Other assets increased mainly as a result of certain strategic investments that
the company made in 1994 and capitalized costs associated with the company's
Concert joint venture with BT.
<PAGE> PAGE 18
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Balance Sheet (continued)
- ------------------------
The decrease in current liabilities is a result of decreases in long-term
debt due within one year, accounts payable and accrued telecommunications
expense. Long-term debt due within one year decreased as a result of debt
that came due and was paid in the first quarter of 1994. The decrease in
accounts payable is a result of the timing and increased volume of payments
on accounts payable. Accrued telecommunications expense decreased due to
the timing of a large number of payments in June 1994. These decreases were
offset by an increase in other accrued liabilities which is primarily a
result of increased income taxes payable.
Noncurrent liabilities increased primarily due to the net increase in long-
term debt. In March 1994, the company issued $450 million principal amount
of 7 3/4% Senior Debentures due March 23, 2025, $300 million principal
amount of 6 1/4% Senior Notes due March 23, 1999 and $200 million principal
amount of Senior Floating Rate Notes due March 16, 1999 (Senior Floating
Rate Notes). In conjunction with the issuance of the Senior Floating Rate
Notes, the company entered into an interest rate swap agreement for a
notional principal amount of $200 million, which will result in an effective
fixed interest cost of 6.37% with respect to the Senior Floating Rate Notes.
These increases in long-term debt were offset by a decrease in commercial
paper borrowings repaid with a portion of the proceeds from the
aforementioned debt.
As discussed in Note 2 of Notes to Consolidated Financial Statements, the
company uses its bank credit facility in conjunction with its commercial paper
program to fund short-term fluctuations in working capital and other general
corporate requirements. At June 30, 1994, there were no amounts outstanding
under the commercial paper program or the credit facility.
Stockholders' equity increased as a result of additions to retained earnings
from net income for the first six months of 1994 and common stock issued in
connection with employee benefit plans. These increases were partially offset
by purchases of treasury stock during the same time period.
The company's ratio of debt to total debt plus equity increased to 38% at June
30, 1994, from 35% at December 31, 1993, primarily as a result of the issuance
of debt in the first quarter of 1994.
<PAGE> PAGE 19
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Cash Flows
- ---------- Six months ended
(In millions, except June 30,
% change) 1994 1993 $ change % change
------ ------ -------- --------
Cash from operating
activities $1,051 $1,109 $ (58) (5.2%)
Cash used for
investing activities (1,588) (1,022) (566) (55.4%)
Cash from financing
activities 436 55 381 100+%
---- ---- ---- -----
Net (decrease) increase
in cash and cash
equivalents $ (101) $ 142 $(243) (100+%)
==== ==== ===== =====
The decrease in cash from operating activities is due to an increase in cash
paid to suppliers and employees offset by an increase in cash received from
customers resulting from the overall growth in the company's business.
The increase in cash used for investing activities is primarily attributable
to the increased investment in the company's communications system due to the
continued investment in its transmission and switching facilities to meet
customers' demand for new services, redundancy and enhanced network
intelligence. Also affecting this increase were strategic investments including
the purchase of substantially all the operations of BTNA in January 1994 for
$108 million and other.
The increase in cash from financing activities is primarily due to a decrease
in the level of retirements of Senior Notes and other debt in the first six
months of 1994 versus the same period in 1993. This was offset by the June
1993 issuance of preferred stock to BT. Also contributing to the inflow of
cash from financing activities in 1994 was an increase in the issuance of
Senior Notes and other debt.
<PAGE> PAGE 20
PART I. ITEM 2.
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Other Matters
- -------------
In May 1993, the FASB issued SFAS 115, Accounting for Certain Investments
in Debt and Equity Securities, effective for fiscal years beginning after
December 15, 1993. This standard established new accounting and reporting
requirements for certain investments in debt and equity securities. The
adoption of this new standard in the first quarter of 1994 did not have a
material impact on the company's financial position or results of
operations. This standard will be applied to applicable investments
including those that may arise as a result of the use of the remaining
proceeds from the BT transaction.
- -----------------------------------------------
* networkMCI, Proof Positive and Best Friends are service marks of MCI
Communications Corporation.
** 1-800-COLLECT, Friends & Family, MCI Vision, MCI Preferred and
WorldPhone are registered service marks of MCI Communications
Corporation.
*** Concert is a mark of Concert Communications Company.
<PAGE> PAGE 21
PART II. OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The company's annual meeting of stockholders was held on
May 23, 1994.
(b) The nominees for directors of the company set forth in full in the
company's Proxy Statement dated April 14, 1994 (Proxy Statement)
were elected at the annual meeting.
(c) Holders of common shares voted at the annual meeting on the
following matters which were set forth in the company's Proxy
Statement.
(1) To elect 4 directors, each to serve for a term of three years.
VOTES (in millions):
Nominee For Abstain
Clifford L. Alexander, Jr. 437 2
Richard M. Jones 437 2
Richard T. Liebhaber 437 2
John R. Worthington 437 2
Broker non-votes: none
(2) To approve the reservation of 20,000,000 additional shares of
common stock to be issued under the employee stock purchase
plan.
VOTES (in millions):
For: 429
Against: 7
Abstain: 3
Broker non-votes: None
(3) To approve the appointment by the Board of Directors of Price
Waterhouse as independent accountants for the year ending
December 31, 1994.
VOTES (in millions):
For: 436
Against: 2
Abstain: 1
Broker non-votes: None
<PAGE> PAGE 22
PART II. OTHER INFORMATION (continued)
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Description
----------- -----------
10(a) $2,000,000,000 Revolving Credit Agreement dated as of
of July 8, 1994 among MCI Communications Corporation,
Bank of America National Trust and Savings
Association, as Competitive Bid Agent and Operating
Agent, and several financial institutions parties
thereto and BA Securities, Inc. as Syndication Agent.
10(b) Letter amendment dated August 2, 1994 to the Amended
and Restated Investment Agreement dated as of January
31, 1994 between MCI Communications Corporation and
British Telecommunications plc.
11 Computation of Earnings per Common Share.
12 Computation of Ratio of Earnings to Fixed
Charges.
99(a) Capitalization Schedule as of June 30, 1994.
b) Reports on Form 8-K
No reports on Form 8-K were filed by the company during the three
month period ended June 30, 1994.
<PAGE> PAGE 23
SIGNATURE
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 thereunto
duly authorized.
MCI COMMUNICATIONS CORPORATION
Date: August 12, 1994 Signed:
-----------------------
Bradley E. Sparks
Vice President
and Controller
<PAGE> PAGE 24
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
FORM 10-Q
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10(a) $2,000,000,000 Revolving Credit Agreement dated as of
July 8, 1994 among MCI Communications Corporation,
Bank of America National Trust and Savings Association
and, as Competitive Bid Agent and Operating Agent, and
the several financial institutions parties thereto and
BA Securities, Inc., as Syndication Agent.
10(b) Letter amendment dated August 2, 1994 to the amended and
Restated Investment Agreement dated as of January 31,
1994 between MCI Communications Corporation and British
Telecommunications plc.
11 Computation of Earnings per Common Share.
12 Computation of Ratio of Earnings to Fixed
Charges.
99(a) Capitalization Schedule as of June 30, 1994.
<PAGE> Exhibit 10(a)
-------------
( 1 of 152)
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of July 8, 1994, among MCI
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"),
the several financial institutions parties to this Agreement
(collectively, the "Banks"; individually, a "Bank"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("Bank of America")
as Competitive Bid Agent and Operating Agent, and BA SECURITIES,
INC. as Syndication Agent.
WHEREAS, the Company requested BA Securities, Inc. to act as
Syndication Agent (as hereinafter defined) to assemble a syndicate
of lending institutions to make available to the Company a
revolving credit facility, comprising a pro rata facility and a
competitive bid facility; and
WHEREAS, the Banks have agreed to make available to the
Company such a revolving credit facility, upon the terms and
conditions set forth in this Agreement; and
WHEREAS, in connection with the competitive bid facility
referred to in Section 2.02 below the Banks wish to appoint Bank of
America as their competitive bid agent (in such capacity, Bank of
America shall be hereinafter referred to as the "Competitive Bid
Agent"), and in connection with other aspects of this Agreement the
Banks wish to appoint Bank of America as their operating agent (in
such capacity, Bank of America shall be hereinafter referred to as
the "Operating Agent").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms
defined):
"Absolute Bid" means a proposal for the making of one or
more Competitive Bid Advances at a fixed rate (other than
Competitive Bid Eurodollar Advances) under Section 2.02.
"Advances" means Pro Rata Advances and Competitive Bid
Advances.
<PAGE> Exhibit 10(a)
-------------
( 2 of 152)
"Affiliate" means, with respect to any Person, any other
Person (other than a Subsidiary) which, directly or indirectly, is
in control of, is controlled by, or is under common control with
such Person. A Person shall be deemed to control another Person if
such controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. Any director, executive
officer or beneficial owner of ten percent (l0%) or more of the
shares of capital stock having power to vote for the election of
directors of a Person (or comparable interests in the case of a
Person other than a corporation) shall, for the purposes of this
Agreement, be deemed an Affiliate of such Person. Notwithstanding
the foregoing, under no circumstances shall either Agent or any
Bank be deemed to be an Affiliate of the Company or any Subsidiary
of the Company.
"Agents" means the Competitive Bid Agent and the
Operating Agent.
"Agreement" means this Revolving Credit Agreement, as
amended, supplemented or modified from time to time.
"Applicable Margin" means with respect to Eurodollar
Rate Advances, the percentage per annum set forth on the Pricing
Grid for the applicable Pricing Level for such Advance.
"Assignee" has the meaning ascribed to such term in
Section 9.07(a).
"Assignment Effective Date" has the meaning ascribed to
such term in Section 9.07(a).
"Assignment Notice and Acceptance" means an assignment
notice and acceptance entered into by a Bank and an Assignee, and
accepted by the Operating Agent, in substantially the form of
Exhibit G hereto.
"Availability Period" means the period from the
Effective Date to the Termination Date.
"BA Securities" means BA Securities, Inc., a Delaware
corporation and a wholly-owned subsidiary of BankAmerica
Corporation. BA Securities is a registered broker-dealer and
permitted to underwrite and deal in certain Ineligible Securities
as defined in Section 6.06(c)).
<PAGE> Exhibit 10(a)
-------------
( 3 of 152)
"Bank of America" means Bank of America National Trust
and Savings Association.
"Borrowing" means a Competitive Bid Borrowing or a Pro
Rata Borrowing.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in New York City or
San Francisco are authorized or required by law to close.
"Capitalized Lease Obligation" means, with respect to
any Person, a lease obligation of such Person which would be
required under GAAP to be capitalized on the books of such Person.
"COBRA" has the meaning ascribed to such term in
Section 3.08.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute.
"Commitment" means, with respect to any Bank, its
obligation to make Pro Rata Advances to the Company pursuant to
Section 2.01 in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Bank's name on the
signature pages hereto, under the "Commitment" heading, as such
amount may be reduced from time to time as provided herein
(collectively, with respect to all the Banks, the "Commitments").
"Commitment Percentage" means, with respect to any Bank,
the percentage of the aggregate Commitments constituted by such
Bank's Commitment.
"Competitive Bid Advance" means an extension of credit
by a Bank to the Company under Section 2.02.
"Competitive Bid Advance Confirmation" has the meaning
ascribed to such term in Section 2.02(d).
"Competitive Bid Advance Offer" has the meaning ascribed
to such term in Section 2.02(c).
"Competitive Bid Agent" means Bank of America in its
capacity as competitive bid agent for the Banks hereunder in
connection with the competitive bid facility established under
Section 2.02, as contemplated by the second WHEREAS clause, and any
successor agent.
<PAGE> Exhibit 10(a)
-------------
( 4 of 152)
"Competitive Bid Borrowing" means a borrowing hereunder
consisting of one or more Competitive Bid Advances made to the
Company on the same day by one or more Banks pursuant to Section
2.02.
"Competitive Bid Borrowing Request" has the meaning
ascribed to such term in Section 2.02(b).
"Competitive Bid Eurodollar Advance" means a Competitive
Bid Advance that shall bear interest based on a Competitive Bid
Eurodollar Rate.
"Competitive Bid Eurodollar Rate" means, with respect to
any Competitive Bid Eurodollar Advance, a rate of interest
determined pursuant to Section 2.02(g).
"Competitive Bid Note" means a promissory note of the
Company substantially in the form of Exhibit B hereto.
"Contingent Obligation" means, with respect to any
Person, any direct or indirect liability of that Person with
respect to any Indebtedness, lease, dividend, letter of credit or
other obligation (the "primary obligations") of another Person (the
"primary obligor"), including, without limitation, any obligation
of such Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b)
to advance or provide funds (i) for the payment or discharge of any
such primary obligation, or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor or (c) to purchase
property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or
(d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the Company in good
faith.
"Contractual Obligations" means, with respect to any
Person, any provision of any security issued by such Person or of
any agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument to which such Person is a party or by
which it or any of its property is bound.
<PAGE> Exhibit 10(a)
-------------
( 5 of 152)
"Default" means any of the events specified in Article
VII, whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, event or act has
been satisfied.
"DOL" means the United States Department of Labor.
"Dollars" and "$" mean dollars in lawful currency of the
United States.
"Domestic Lending Office" means, with respect to each
Bank, the office of such Bank in the United States designated as
such in Schedule I hereto or such other office of such Bank as such
Bank in the United States may from time to time specify to the
Company and the Operating Agent.
"Effective Date" means July 8, 1994.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time and any regulation
promulgated thereunder.
"ERISA Affiliate" means, with respect to the Company or
any Subsidiary, all trades or businesses (whether or not
incorporated) under common control with the Company or such
Subsidiary and which, together with the Company or any Subsidiary,
are treated as a single employer under Section 414(b), 414(c) or
414(m) of the Code.
"ERISA Event" means, with respect to the Company or any
ERISA Affiliate (a) a Reportable Event (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC
under the regulations issued under ERISA); or (b) the withdrawal of
the Company or any ERISA Affiliate from a Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or (c) the filing of a notice of intent to
terminate a Plan, if such Plan is underfunded, or the treatment of
a Plan amendment as a termination under Section 4041 of ERISA; or
(d) the institution of proceedings to terminate a Plan by the PBGC;
or (e) the imposition of a lien under Section 412 of the Code or
Section 302 of ERISA; or (f) any other event or condition which
might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan or to result in the imposition of
any liability under Title IV of ERISA other than PBGC premiums due
but not delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning ascribed to
such term in Regulation D of the Federal Reserve Board.
<PAGE> Exhibit 10(a)
-------------
( 6 of 152)
"Eurodollar Business Day" means a day that is a Business
Day and is also a day on which banks are open for business in
London and dealings are carried on in the London interbank
Eurodollar market.
"Eurodollar Lending Office" means, with respect to each
Bank, the office of such Bank designated as such in Schedule I
hereto or such other office of such Bank, as such Bank may from
time to time specify to the Company and the Operating Agent.
"Eurodollar Rate" means, with respect to each Interest
Period for Eurodollar Rate Advances comprising the same Pro Rata
Borrowing a rate per annum equal to the average (rounded upwards,
if necessary, to the nearest whole multiple of one-sixteenth of one
percent (1/16 of 1%)) of the rates of interest per annum notified
to the Operating Agent by each Reference Bank as the rate at which
Dollar deposits for such Interest Period and in an amount
comparable to the amount of the Eurodollar Rate Advance of such
Reference Bank during such Interest Period would be offered by its
Eurodollar Lending Office to major banks in the London interbank
Eurodollar market at or about 11:00 a.m. (London time) on the
second Eurodollar Business Day before the commencement of such
Interest Period.
"Eurodollar Rate Advance" means a Pro Rata Advance that
shall bear interest based on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, with respect to
the Interest Period for any Eurodollar Rate Advance of any Bank,
the reserve percentage applicable during such Interest Period (or
if more than one such percentage shall be so applicable, the daily
average of such percentages for the days in such Interest Period
for which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board
for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period in an amount comparable to the amount
of such Eurodollar Rate Advance.
"Event of Default" means any of the events specified in
Article VII, provided, however, that any requirement for the
giving of notice, the lapse of time, or both, or any other
condition, event or act has been satisfied.
"Existing Agreement" means the $1,250,000,000 Revolving
Credit Agreement, dated as of June 8, 1992, as amended from time to
time prior to the date hereof, among the Company, Bank of America
and the several financial institutions parties thereto.
<PAGE> Exhibit 10(a)
-------------
( 7 of 152)
"Federal Funds Rate" means, for any period, the rate set
forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board
(including any such successor, "H.15(519)") for such day opposite
the caption "Federal Funds (Effective)". If on any relevant day
such rate is not yet published in H.15(519), the rate for such day
will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any such successor,
the "Composite 3:30 p.m. Quotations") for such day under the
caption "Federal Funds Effective Rate". If on any relevant day the
appropriate rate for such previous day is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York time) on that day by each of three (3) leading brokers of
Federal funds transactions in New York City, selected by the
Operating Agent.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereof.
"Fitch" means Fitch Investors Service, Inc.
"Form 1001" has the meaning ascribed to such term in
Section 2.15(f)(i).
"Form 4224" has the meaning ascribed to such term in
Section 2.15(f)(i).
"GAAP" means generally accepted accounting principles in
the United States in effect from time to time.
"Governmental Authority" means any nation or government,
any state or other political subdivision thereof and any central
bank thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any
of the foregoing.
"Hazardous Materials" means those substances which are
regulated by or form the basis of liability under any Hazardous
Materials Laws.
"Hazardous Materials Claims" has the meaning ascribed to
such term in Section 5.10(d).
<PAGE> Exhibit 10(a)
-------------
( 8 of 152)
"Hazardous Materials Laws" means the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 960l et seq.), the Hazardous Material Transportation Act
(49 U.S.C. Section 180l et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 690l et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 1251 et seq.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 et seq.), and the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.), as such laws
have been amended or supplemented and any analogous future federal,
or present or future state or local, statutes and the regulations
promulgated thereunder.
"Indebtedness" means, with respect to any Person,
(a) all obligations of such Person for borrowed money (including,
without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured); (b) all obligations evidenced
by notes, bonds, debentures or similar instruments; (c) all
obligations to pay for the deferred purchase price of property or
services except trade accounts payable and accrued liabilities
arising in the ordinary course of business; (d) all indebtedness
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller under
such agreement in the event of default are limited to repossession
or sale of such property); (e) all obligations under leases which
have been or should be, in accordance with GAAP, recorded as
capital leases; and (f) all indebtedness secured by any Lien on any
property or asset owned or held by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by
that Person or is non-recourse to the credit of such Person.
"Indemnified Liabilities" has the meaning ascribed to
such term in Section 9.05.
"Indemnified Person" has the meaning ascribed to such
term in Section 9.05.
"Indenture" means the Subordinated Indenture dated as of
October 15, 1989 between the Company and Bankers Trust Company, as
Trustee, as the same may be amended or supplemented from time to
time.
"Interest Payment Date" means, with respect to any Pro
Rata Advance, the last day of each Interest Period applicable to
such Advance or, in the case of a Reference Rate Advance, each
February 15, May 15, August 15 and November 15 falling after the
date of such Reference Rate Advance.
<PAGE> Exhibit 10(a)
-------------
( 9 of 152)
"Interest Period" means:
(a) with respect to any Eurodollar Rate Advance, the
period commencing on the date of such Advance and ending on the
date one (1), two (2), three (3), six (6) or, if available to all
the Banks, nine (9) or twelve (12) months thereafter, as selected
by the Company in its notice of borrowing as provided in Section
2.04; and
(b) with respect to any Competitive Bid Advance, the
period specified for such Advance in the related Competitive Bid
Borrowing Request under Section 2.02(a);
provided that:
(i) if any Interest Period pertaining to a
Eurodollar Rate Advance or Competitive Bid Eurodollar Advance
would otherwise end on a day which is not a Eurodollar
Business Day, that Interest Period shall be extended to the
next succeeding Eurodollar Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Eurodollar Business
Day;
(ii) any Interest Period pertaining to a Eurodollar
Rate Advance or Competitive Bid Eurodollar Advance shall,
subject to proviso (i) above, end on the day in the calendar
month at the end of such Interest Period that shall
numerically correspond to the first day of such Interest
Period; provided, that if there shall be no such numerically
corresponding day in such last calendar month, such Interest
Period shall end on the last Eurodollar Business Day of such
calendar month;
(iii) if any Interest Period pertaining to a
Competitive Bid Advance other than a Competitive Bid
Eurodollar Advance would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the
next succeeding Business Day; and
(iv) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the
Termination Date.
"Lending Office" means, with respect to any Bank, a
Domestic Lending Office or Eurodollar Lending Office of such Bank.
"LIBOR Bid" means a proposal for the making of one or
more Competitive Bid Eurodollar Advances under Section 2.02.
<PAGE> Exhibit 10(a)
-------------
( 10 of 152)
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or segregated deposit
arrangement, encumbrance, lien (statutory or other) or preference,
priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including, without limitation, those
created by, arising under or evidenced by any conditional sale or
other title retention agreement or the filing of any financing
statement naming the owner of the asset to which such Lien shall
relate as debtor (other than in connection with a transaction in
which such asset shall have been leased by the named debtor), under
the Uniform Commercial Code or comparable law of any jurisdiction).
"Loan Documents" means this Agreement and any Notes.
"Majority Banks" means at any time Banks having at least
67% of the then aggregate amount of the Commitments; provided, that
if the Commitments shall have been terminated in full, but Advances
shall remain outstanding, "Majority Banks" shall mean Banks holding
at least 67% of the then aggregate unpaid amount of such
outstanding Advances.
"Margin Stock" means "margin stock" as such term is
defined in Regulation U of the Federal Reserve Board.
"MCI Telecom" means MCI Telecommunications Corporation,
a Delaware corporation.
"MCI Telecom Liabilities" means, at any time, the
aggregate principal amount (without duplication) of all
Indebtedness and Contingent Obligations of MCI Telecom; provided,
however, that the following shall be excluded from Contingent
Obligations for purposes of this definition:
(a) endorsements for collection or deposit in the
ordinary course of business;
(b) interest rate swap or cap agreements;
(c) obligations in respect of performance bonds and
letters of credit not supporting the payment of Indebtedness;
(d) Contingent Obligations with respect to Indebtedness
of the Company or any Subsidiary;
(e) Contingent Obligations with respect to lease
obligations;
(f) recourse obligations with respect to the sales of
customer receivables;
<PAGE> Exhibit 10(a)
-------------
( 11 of 152)
(g) Contingent Obligations related to obligations of
third parties (other than the Company and its Subsidiaries) not in
respect of Indebtedness and incurred in the ordinary course of
business; and
(h) other Contingent Obligations of MCI Telecom in an
amount, as to each such Contingent Obligation, less than
$5,000,000.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means, as to the Company or any
ERISA Affiliate, at any time, a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA and to which the Company or
any ERISA Affiliate is making, or is obligated to make
contributions or has made, or been obligated to make,
contributions.
"Notes" means any Pro Rata Notes and Competitive Bid
Notes.
"Operating Agent" means Bank of America in its capacity
as operating agent for the Banks hereunder, and any successor
operating agent.
"Other Taxes" has the meaning ascribed to such term in
Section 2.15(b).
"Participant" has the meaning ascribed to such term in
Section 9.07(b).
"Payment Office" means the office of the Operating Agent
specified in or pursuant to Section 9.02.
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Plan" means, with respect to the Company or any ERISA
Affiliate, at any time, an employee pension benefit plan as defined
in Section 3(2) of ERISA (including a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is maintained for
employees of the Company or any ERISA Affiliate.
"Pricing Grid" means the pricing grid set forth on
Schedule II.
<PAGE> Exhibit 10(a)
-------------
( 12 of 152)
"Pricing Level" means the level on the Pricing Grid for
the highest rating at any time for the long term senior unsecured
debt of the Company as publicly announced by any of the Rating
Agencies; provided, that (a) if none of the Rating Agencies
maintains any rating of the long-term senior unsecured debt of the
Company, then Pricing Level VII as set forth on the Pricing Grid
shall be required, and (b) if any one or more of the Rating
Agencies shall fail to maintain a rating of the long term senior
unsecured debt of the Company but at least one Rating Agency
continues to maintain a rating of such debt, then the Pricing Level
shall be determined based on the rating or ratings of the remaining
Rating Agency or Agencies.
"Pro Rata Advance" means an extension of credit by a
Bank to the Company under Section 2.01, which may be a Reference
Rate Advance or Eurodollar Rate Advance.
"Pro Rata Borrowing" means a borrowing hereunder
consisting of Pro Rata Advances made to the Company on the same day
by the Banks pursuant to Article II.
"Pro Rata Borrowing Request" has the meaning ascribed to
such term in Section 2.04.
"Pro Rata Note" means a promissory note of the Company
substantially in the form of Exhibit A hereto.
"Rating Agencies" shall mean, collectively, Moody's,
Standard & Poor's and Fitch.
"Reference Banks" means Bank of America, The Bank of
Nova Scotia, Citibank, N.A., Mellon Bank, N.A. and Nationsbank of
Virginia, N.A.
"Reference Rate" means the higher of:
(a) the rate of interest publicly announced from time
to time by Bank of America in San Francisco, California, as its
reference rate; and
(b) one-half of one percent (1/2 of 1%) per annum above
the Federal Funds Rate.
The rate referred to in (a) above is a rate set by Bank
of America based upon various factors including Bank of America's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans,
which may be priced at, above or below such announced rate. Any
change in such rate shall take effect at the opening of business on
the day specified in the public announcement of such change.
"Reference Rate Advance" means a Pro Rata Advance that
bears interest based on the Reference Rate.
<PAGE> Exhibit 10(a)
-------------
( 13 of 152)
"Refunding Borrowing" means a Borrowing hereunder which,
after application of the proceeds thereof, results in no net
increase in the aggregate outstanding principal amount of the
Advances made by the Banks.
"Reportable Event" means "reportable event" as defined
in Section 4043 of ERISA.
"Requirement of Law" means, with respect to any Person,
the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to
or binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer" means the Chief Executive Officer
or the President of the Company or, with respect to financial
matters, the Chief Financial Officer, the Controller or the
Treasurer of the Company.
"Right of Way Agreements" has the meaning ascribed to
such term in Section 3.10.
"Specified Amount" has the meaning ascribed to such term
in Section 2.02(d)(B).
"Standard & Poor's" means Standard & Poor's Corporation.
"Subsidiary" means, with respect to any Person, (i) a
corporation of which shares of stock having ordinary voting power
(other than stock having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or
other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person and
(ii) any partnership of which such Person or any Subsidiary is a
general partner or any partnership more than 50% of the equity
interests of which are owned, directly or indirectly, by such
Person or by one or more other Subsidiaries, or by such Person and
one or more other Subsidiaries. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Company, and all
references to the corporate form of a Subsidiary shall be deemed,
in the case of any Subsidiary that shall be a partnership, to refer
to the partnership form thereof.
"Syndication Agent " means BA Securities in its capacity
as arranger of the syndication of the revolving credit facility
contemplated by this Agreement.
<PAGE> Exhibit 10(a)
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( 14 of 152)
"Taxes" has the meaning ascribed to such term in
Section 2.15(a).
"Termination Date" means the earlier to occur of:
(a) July 8, 1999; and
(b) the date on which the Commitments shall terminate
in accordance with the provisions of this Agreement;
provided, that insofar as (a) is concerned the Termination Date may
be extended for an additional year by written agreement between the
Company and the Banks (in the absolute and sole discretion of all
the Banks) entered into within the period of sixty (60) days
immediately prior to each anniversary of the date of this Agreement
pursuant to a request by the Company therefor delivered to the
Operating Agent during the first fifteen (15) days of such period.
"Total Capital" means, at any time, the amount of the
capital stock account plus (or minus in the case of a deficit) the
amount of the additional paid-in capital and retained earnings,
consolidated in accordance with GAAP, of the Company and its
consolidated Subsidiaries, after deducting the aggregate amount of
all minority interests in the capital stock and surplus of
consolidated Subsidiaries, less the aggregate net book value (after
deducting any reserves applicable thereto) of all items of the
following character which are included in the consolidated assets
of the Company and its consolidated Subsidiaries:
(a) franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill,
experimental or organizational expense, and other like intangibles
but excluding rights of way treated as assets;
(b) deferred charges and prepaid expenses (other than
prepaid interest, prepaid rent, insurance and taxes);
(c) unamortized debt discount and expense;
(d) assets which are pledged or deposited as security
for or for the purpose of paying any obligations, contingent or
otherwise, which are not included in consolidated liabilities; and
(e) amounts in respect of capital stock, promissory
notes and other securities issued by the Company or one of its
consolidated Subsidiaries and held in its treasury.
<PAGE> Exhibit 10(a)
-------------
( 15 of 152)
"Total Liabilities" means, at any time, the aggregate
principal amount (without duplication) of all Indebtedness and
Contingent Obligations of the Company and its consolidated
Subsidiaries, on a consolidated basis; provided, however, that the
following shall be excluded from Contingent Obligations for
purposes of this definition:
(a) endorsements for collection or deposit in the
ordinary course of business;
(b) interest rate swap or cap agreements;
(c) obligations in respect of performance bonds and
letters of credit not supporting the payment of Indebtedness;
(d) Contingent Obligations with respect to Indebtedness
of the Company or any Subsidiary;
(e) Contingent Obligations with respect to lease
obligations;
(f) recourse obligations with respect to the sales of
customer receivables;
(g) Contingent Obligations related to obligations of
third parties (other than Subsidiaries) not in respect of
Indebtedness and incurred in the ordinary course of business;
(h) Contingent Obligations of any corporation that
shall become a Subsidiary after the date of this Agreement to the
extent such Contingent Obligations existed at the time of the
acquisition and were not created in anticipation thereof by or with
the agreement of the Company; and
(i) other Contingent Obligations of the Company or any
Subsidiary in an amount, as to each such Contingent Obligation,
less than $5,000,000.
"Transferee" has the meaning ascribed to such term in
Section 9.08.
"Unfunded Benefit Liabilities" means, with respect to
any Plan at any time, the amount (if any) by which (i) the present
value of all benefit liabilities under such Plan, determined based
on actuarial assumptions used to determine accumulated benefit
obligations under Accounting Principle 87 of the Financial
Accounting Standards Board, exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of the
Company or any ERISA Affiliate to the PBGC or such Plan under Title
IV of ERISA.
<PAGE> Exhibit 10(a)
-------------
( 16 of 152)
"United States" means the United States of America.
"WUI" means Western Union International, Inc., a
Delaware corporation.
1.02 Other Definitional Provisions.
(a) Unless otherwise specified herein, all terms
defined in this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered pursuant
hereto.
(b) All accounting terms not expressly defined herein
shall be construed, except where the context otherwise requires,
and all financial computations required under this Agreement shall
be made, in accordance with GAAP; provided, that no change in GAAP
after the date of this Agreement shall have the effect of causing
a Default or Event of Default under this Agreement if such Default
or Event of Default would not have occurred in the absence of such
change in GAAP (except to the extent that an amendment as
contemplated by Section 5.11 shall be agreed to by the requisite
parties hereto).
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement, and section, schedule and exhibit references are to
this Agreement unless otherwise specified. The meaning of defined
terms shall be equally applicable to the singular and plural forms
of the defined terms.
ARTICLE II
THE CREDIT FACILITIES
2.01 Commitments to Make Pro Rata Advances.
(a) Commitments. Each Bank severally agrees, on the
terms and conditions hereof, to make Pro Rata Advances to the
Company from time to time on any Business Day (or, in the case of
Eurodollar Rate Advances, any Eurodollar Business Day) during the
Availability Period in an aggregate principal amount at any one
time outstanding not to exceed its Commitment Percentage of the
Commitments at such time; provided, that the aggregate principal
amount of all Pro Rata Advances and Competitive Bid Advances
outstanding at any time shall not exceed the Commitments at such
time. During the Availability Period, the Company may borrow under
Sections 2.01(a) and 2.04, prepay and repay Pro Rata Advances to
the extent permitted by Sections 2.07 and 2.08 and reborrow in
accordance with Sections 2.01(a), 2.04 and 2.05 and the other terms
and conditions hereof.
<PAGE> Exhibit 10(a)
-------------
( 17 of 152)
(b) Types of Pro Rata Advances. Each Pro Rata
Borrowing shall consist of (i) Eurodollar Rate Advances or
(ii) Reference Rate Advances, provided that no Eurodollar Rate
Advance shall be made less than one month prior to the Termination
Date. Eurodollar Rate Advances shall be made by each Bank at its
Eurodollar Lending Office and Reference Rate Advances shall be made
by each Bank at its Domestic Lending Office.
2.02 Competitive Bid Advances.
(a) Competitive Bid Advances. Each Bank severally
agrees that the Company may borrow Competitive Bid Advances under
this Section 2.02 from time to time on any Business Day (or, in the
case of Competitive Bid Eurodollar Advances, any Eurodollar
Business Day) during the Availability Period in the manner set
forth below; provided, that (I) the aggregate principal amount of
all Pro Rata Advances and Competitive Bid Advances outstanding at
any time shall not exceed the Commitments at such time, (II) except
as provided in Section 2.02(l), the Company shall not request that
a Competitive Bid Advance be made on the same day on which a Pro
Rata Advance is to be made hereunder, (III) the Company may not
deliver a Competitive Bid Borrowing Request as long as Pricing
Level VII would be effective if a Pro Rata Advance were made at
such time, and (IV) the Company may not deliver a Competitive Bid
Borrowing Request within five (5) Business Days of any other
Competitive Bid Borrowing Request hereunder; provided that the
Company and the Competitive Bid Agent may agree from time to time
to a period of less than five (5) Business Days between Competitive
Bid Borrowing Requests.
(b) Competitive Bid Borrowing Requests. The Company
may request Competitive Bid Advances under this Section 2.02 to be
made on any Business Day (in the case of an Absolute Bid) or
Eurodollar Business Day (in the case of a LIBOR Bid) that is not
also the day requested by the Company for a Pro Rata Advance
hereunder, except as provided in Section 2.02(l), by giving a
notice substantially in the form of Exhibit C-2 (a "Competitive Bid
Borrowing Request") to the Competitive Bid Agent, not later than
(1) in the case of LIBOR Bids, 11:00 a.m. (New York City time) at
least four (4) Eurodollar Business Days prior to the date of the
proposed Competitive Bid Advances, or (2) in the case of Absolute
Bids, 11:00 a.m. (New York City time) at least one (1) Business Day
prior to the date of the proposed Competitive Bid Advances,
containing the information specified in Exhibit C-2 hereto and
specifying for not more than three (3) alternative proposed
Competitive Bid Advances (A) the aggregate amount and date of the
proposed Competitive Bid Advances, which aggregate amount shall be
a minimum of Five Million Dollars ($5,000,000) or a multiple of One
Million Dollars ($1,000,000) in excess of Five Million Dollars
($5,000,000), (B) the final maturity date thereof (which shall not
be less than one (1) month in the case of a LIBOR Bid, or seven (7)
<PAGE> Exhibit 10(a)
-------------
( 18 of 152)
days in the case of an Absolute Bid, from the date the proposed
Competitive Bid Advances are to be made and shall not occur after
the earlier of (i) the Termination Date or (ii) the date six (6)
months, in the case of a LIBOR Bid, or one hundred eighty three
(183) days, in the case of an Absolute Bid, after the date of the
requested Competitive Bid Advances), (C) the Interest Period or
Interest Periods and/or the interest payment date or dates relating
thereto and (D) any other terms to be applicable to such
Competitive Bid Advances. The Competitive Bid Agent shall in turn
promptly notify each Bank of such information.
(c) Offers of Competitive Bid Advances. Each Bank may,
in its sole discretion, elect irrevocably (except as provided in
Section 2.02(h)) to offer to make one or more Competitive Bid
Advances (each in a minimum amount equal to Five Million Dollars
($5,000,000) or a multiple of One Million Dollars ($1,000,000) in
excess of Five Million Dollars ($5,000,000)) at a rate or rates of
interest (in the case of an Absolute Bid) or at a margin or margins
(in the case of a LIBOR Bid) specified by such Bank in its sole
discretion by notifying the Competitive Bid Agent by telephone,
immediately confirmed by telecopier, before (1) in the case of
LIBOR Bids, 10:00 A.M. (New York City time) (if the Bank shall be
the Bank acting as the Competitive Bid Agent) or 10:15 A.M. (New
York City time) (in the case of each other Bank) three (3)
Eurodollar Business Days before the date of the proposed
Competitive Bid Advance, or (2) in the case of Absolute Bids, 9:30
A.M. (New York City time) (if the Bank shall be the Bank acting as
the Competitive Bid Agent) or 9:45 A.M. (New York City time) (in
the case of each other Bank) on the date of the proposed
Competitive Bid Advances (which notice the Competitive Bid Agent
shall transmit by telephone, immediately confirmed by telecopier,
to the Company before (1) in the case of LIBOR Bids, 11:15 A.M.
(New York City time) three (3) Eurodollar Business Days before the
date of the proposed Competitive Bid Advances, or (2) in the case
of Absolute Bids, 10:15 A.M. (New York City time) on the date of
the proposed Competitive Bid Advances), of the maximum amount of
each Competitive Bid Advance which such Bank would be willing to
make (which maximum amount shall be at least Five Million Dollars
($5,000,000) or a multiple of One Million Dollars ($1,000,000) in
excess of Five Million Dollars ($5,000,000)), the rate or rates of
interest or margin or margins therefor and the aggregate maximum
amount of all Competitive Bid Advances such Bank would be willing
to make, provided, that no more than two alternative interest rates
or margins may be offered for each separate maturity date of
Competitive Bid Advances. Each Bank may offer to make one or more
Competitive Bid Advances in an aggregate amount in excess of such
Bank's Commitment. Each such offer shall be in substantially the
form of Exhibit D hereto (a "Competitive Bid Advance Offer").
<PAGE> Exhibit 10(a)
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( 19 of 152)
(d) Responses by the Company to Offers. The Company
shall, in turn, by (1) in the case of LIBOR Bids, 11:45 A.M. (New
York City time) three (3) Eurodollar Business Days before the date
of the proposed Competitive Bid Advances, or (2) in the case of
Absolute Bids, 10:30 A.M. (New York City time) on the date of the
proposed Competitive Bid Advances, either
(A) cancel such Competitive Bid Borrowing Request
by giving the Competitive Bid Agent notice by telephone
to that effect immediately confirmed in writing, or
(B) accept one or more of the offers made by any
Bank or Banks pursuant to paragraph (b) above, in its
sole discretion, by giving notice by telephone to the
Competitive Bid Agent of the amount of each Competitive
Bid Advance (which amount shall be equal to or less than
the maximum amount, notified to the Company by the
Competitive Bid Agent on behalf of such Bank for such
Competitive Bid Advance pursuant to paragraph (c) above
but shall be at least equal to Five Million Dollars
($5,000,000) (unless a lower amount is agreed to by the
Company, the Competitive Bid Agent and the Bank whose
offer is being accepted) or a multiple of One Million
Dollars ($1,000,000) in excess of Five Million Dollars
($5,000,000)) to be made by each Bank, and reject any
remaining offers made by Banks pursuant to paragraph (b)
above by giving the Competitive Bid Agent notice to that
effect; provided, that (i) the aggregate principal
amount of offered Competitive Bid Advances accepted by
the Company shall not exceed the aggregate principal
amount of the Competitive Bid Advances requested by it;
and (ii) subject to the remainder of this Section
2.02(d) (B), if the Company is to accept any of such
offers, it must accept offers strictly based upon
pricing and no other criteria whatsoever. If two or
more Banks submit offers at identical pricing and the
Company shall accept any of such offers but does not
wish (or is not permitted under (i) above) to borrow the
total amount offered by such Banks, the Company shall
accept offers from all of such Banks in amounts
allocated among them pro rata according to the amounts
offered by such Banks. If the interest rate for any
Competitive Bid Advance offered by any Bank shall exceed
the maximum interest rate permitted by law for loans of
less than an amount specified by law (the "Specified
Amount"), then (x) the Company may accept all or a
portion (not less than the Specified Amount) of such
Competitive Bid Advance offered by any other Bank to the
extent it shall deem necessary or advisable to cause the
aggregate principal amount of Competitive Bid Advances
to be made to equal the aggregate principal amount of
Competitive Bid Advances requested by the Company and
<PAGE> Exhibit 10(a)
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( 20 of 152)
(y) the Company may not accept a portion of a
Competitive Bid Advance from any Bank which is less than
the Specified Amount for such Competitive Bid Advance.
Notwithstanding anything to the contrary in this Section
2.02(d)(B), the amount of the Competitive Bid Advance to
be made by any Bank may be rounded to the nearest One
Hundred Thousand Dollars ($100,000) in the discretion of
the Competitive Bid Agent. Each such notice of
acceptance by the Company shall be confirmed in writing,
in substantially the form of Exhibit E hereto (a
"Competitive Bid Advance Confirmation").
Failure to give any such notice shall be deemed to be a
cancellation by the Company of such Competitive Bid Borrowing
Request.
(e) Notice of Cancellation. If the Company shall
cancel or be deemed to cancel a Competitive Bid Borrowing Request
pursuant to paragraph (d) above, the Competitive Bid Agent shall
give prompt notice thereof to the Banks and the Competitive Bid
Advances requested thereby shall not be made.
(f) Notice of Acceptance. If the Company shall accept
one or more of the offers made by any Bank or Banks pursuant to
paragraph (d) above, the Competitive Bid Agent shall in turn notify
by telephone by (1) in the case of LIBOR Bids, 12:30 P.M. (New York
City time) three (3) Eurodollar Business Days before the date of
such proposed Competitive Bid Advances, or (2) in the case of
Absolute Bids, 10:45 A.M. (New York City time) on the date of the
proposed Competitive Bid Advances, in each case with confirmation
by telex or telecopier, (A) each Bank which has made an offer as
described in paragraph (c) above of the date and aggregate amount
of such Competitive Bid Advances and whether or not any offer or
offers made by such Bank pursuant to paragraph (c) above shall have
been accepted by the Company, and (B) each Bank which is to make a
Competitive Bid Advance of the amount of each Competitive Bid
Advance to be made by such Bank and the terms of each such
Competitive Bid Advance. The Competitive Bid Agent will send
concurrently to the Operating Agent a copy of each such
confirmation telex and will send to the Operating Agent (i) by 5:00
P.M. (New York City time) two (2) Eurodollar Business Days before
the date of any proposed Competitive Bid Eurodollar Advances, a
listing of each LIBOR Bid accepted, and (ii) by 11:00 A.M. (New
York City time) on the date of any other proposed type of
Competitive Bid Advances, a listing of each Absolute Bid accepted.
Each Bank which is to make a Competitive Bid Advance shall, prior
to 12:00 Noon (New York City time) on the date of such Competitive
Bid Advance specified in the notice received from the Competitive
Bid Agent pursuant to the preceding sentence, make available to the
Operating Agent at the Payment Office such Bank's Competitive Bid
<PAGE> Exhibit 10(a)
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( 21 of 152)
Advance in same day funds. After receipt by the Operating Agent of
such funds and subject to the provisions of Article IV, the
Operating Agent will make such funds available to the Company as
soon as practicable on such date in accordance with the prior
instructions of the Company and in like funds as received by the
Operating Agent. Promptly after each Competitive Bid Advance is
made, (x) the Operating Agent will notify the Competitive Bid Agent
and each Bank of the amount of such Competitive Bid Advance and (y)
the Competitive Bid Agent will notify each Bank of the range of
bids submitted and the highest bid accepted, with respect to the
related Competitive Bid Borrowing.
(g) Determining the Competitive Bid Eurodollar Rate.
If the Company shall accept, pursuant to paragraph (d)(B) above,
one or more of the offers made by any Bank or Banks to make a
Competitive Bid Eurodollar Advance, the Competitive Bid Agent will
solicit from the Reference Banks information for determining the
Competitive Bid Eurodollar Rate applicable to such Competitive Bid
Eurodollar Advance. The Competitive Bid Eurodollar Rate for the
Interest Period of any Competitive Bid Eurodollar Advance shall be
determined in the manner in which the Eurodollar Rate would be
determined for such Interest Period if the Advance were a
Eurodollar Rate Advance to be made by the applicable Reference Bank
but with the margin set forth in the offer of the relevant Bank.
Each Reference Bank agrees promptly to furnish to the Competitive
Bid Agent information for the purpose of determining the relevant
Competitive Bid Eurodollar Rate. If any of the Reference Banks
shall not furnish such timely information to the Competitive Bid
Agent for determination of such Competitive Bid Eurodollar Rate,
the Competitive Bid Agent shall, subject to the provisions of
clause (h) below, determine such Competitive Bid Eurodollar Rate on
the basis of timely information furnished by the remaining
Reference Banks. The Competitive Bid Agent shall as soon as
practicable notify the Company and the relevant Banks of each
determination of a Competitive Bid Eurodollar Rate; provided, that
any failure to do so shall not relieve the Company of any liability
hereunder. Each determination of an interest rate by the
Competitive Bid Agent pursuant to this paragraph (g) shall be
conclusive and binding on the Company and the Banks in the absence
of manifest error. The Competitive Bid Agent shall, at the request
of the Company or any relevant Bank, deliver to the Company or such
Bank, as the case may be, a statement showing the quotations used
by the Competitive Bid Agent in determining any interest rate
pursuant to this paragraph (g).
(h) Inability to Determine Competitive Bid Eurodollar
Rate. If, on or before any date on which a Competitive Bid
Eurodollar Rate is to be determined pursuant to paragraph (g)
above, (i) the Competitive Bid Agent shall receive notice from two
or more Reference Banks that, because of reasons affecting
generally the London interbank Eurodollar market, deposits in
<PAGE> Exhibit 10(a)
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Dollars are not being offered by such Reference Banks to prime
banks in the London interbank Eurodollar market for the applicable
Interest Period or in the applicable amounts or (ii) the
Competitive Bid Agent shall receive notice at least one day prior
to the proposed borrowing date from the Banks which are obligated
to make at least 66-2/3% of the relevant Competitive Bid Eurodollar
Advances that such Competitive Bid Eurodollar Rate will not
adequately reflect the cost to such Banks of making, funding or
maintaining for the applicable Interest Period the Competitive Bid
Eurodollar Advances to which such Interest Period shall relate, the
Competitive Bid Agent shall forthwith give notice of such event to
the Company and to each relevant Bank, whereupon such Competitive
Bid Eurodollar Advances shall not be made.
(i) Borrowing and Reborrowing. Within the limits and
on the conditions set forth in this Section 2.02, the Company may
from time to time borrow under this Section 2.02, repay pursuant to
paragraph (j) below and reborrow under this Section 2.02.
(j) Repayments. The Company shall repay to the
Operating Agent, at the Payment Office and otherwise in accordance
with Section 2.14, for account of each Bank which shall have made
a Competitive Bid Advance and on the date for the repayment thereof
(as specified by the Company in the related Competitive Bid
Borrowing Request delivered pursuant to paragraph (b) above) the
principal amount of such Competitive Bid Advance. The Company
shall not have the right to prepay any Competitive Bid Advance.
(k) Interest. The Company shall pay to the Operating
Agent, at the Payment Office and otherwise in accordance with
Section 2.14, for account of each Bank which shall have made a
Competitive Bid Advance, interest on the unpaid principal amount of
such Competitive Bid Advance from the date of such Competitive Bid
Advance to the date the principal of such Competitive Bid Advance
shall become due, at the rate of interest for such Competitive Bid
Advance specified therefor in the notice with respect thereto
delivered pursuant to paragraph (c) above, or calculated pursuant
to paragraph (g) above with respect to Competitive Bid Eurodollar
Advances, payable on the interest payment date or dates specified
by the Company for such Competitive Bid Advance in the related
Competitive Bid Borrowing Request delivered pursuant to paragraph
(b) above.
(l) Insufficient Competitive Bid Advances. If the
aggregate principal amount of offered Competitive Bid Advances
accepted by the Company shall be less than the aggregate principal
amount of the Competitive Bid Advances requested by the Company for
the date designated in a Competitive Bid Borrowing Request, the
Company may borrow a Reference Rate Advance (in an amount equal to
the difference between the aggregate principal amount of the
Competitive Bid Advances requested by the Company and the aggregate
<PAGE> Exhibit 10(a)
-------------
( 23 of 152)
principal amount of Competitive Bid Advances accepted by the
Company for such date)under the Commitments on the terms and
conditions hereof on the date designated in such Competitive Bid
Borrowing Request, by giving the Operating Agent irrevocable notice
in a Pro Rata Borrowing Request (which notice must be received by
the Operating Agent prior to 11:00 A.M., New York City time) on the
date designated in such Competitive Bid Borrowing Request. Upon
receipt of such notice from the Company, the Operating Agent shall
promptly notify each Bank thereof and of the amount of such Bank's
portion of the respective Pro Rata Borrowing. Subject to the
provisions of Section 2.05, each Bank will make the amount of its
pro rata share of each Borrowing available to the Operating Agent
for the account of the Company at the Payment Office by 12:00 noon
(New York City time) on the borrowing date requested by the Company
in funds immediately available to the Operating Agent. Unless any
applicable condition specified in Article IV has not been
satisfied, the proceeds of all such Advances will then be made
available to the Company by the Operating Agent at the Payment
Office by crediting the account of the Company in accordance with
the Company's payment instructions with the aggregate of the
amounts made available to the Operating Agent by the Banks and in
like funds as received by the Operating Agent.
2.03 Evidence of Debt. Each Bank, with respect to amounts
payable to it hereunder, and the Operating Agent, with respect to
all amounts payable hereunder, shall maintain on its books in
accordance with its usual practice, loan accounts and control
accounts, respectively, setting forth each Advance, the applicable
interest rate and the amounts of principal, interest and other sums
paid and payable by the Company from time to time hereunder with
respect thereto. In the case of any dispute, action or proceeding
relating to any amount payable hereunder, the entries in each such
account shall constitute prima facie evidence of the accuracy of
the information so recorded. In case of a discrepancy between the
entries in the Operating Agent's books and any Bank's books, such
Bank's books shall be considered correct in the absence of manifest
error. The obligation to repay a Pro Rata Advance or a Competitive
Bid Advance shall also be evidenced by a Pro Rata Note or a
Competitive Bid Note, as the case may be.
2.04 Procedure for Pro Rata Borrowings.
(a) The Company may make Pro Rata Borrowings under the
Commitments on any Business Day (or, in the case of any Pro Rata
Borrowing consisting of Eurodollar Rate Advances, on any Eurodollar
Business Day) during the Availability Period, provided, that the
Company shall give the Operating Agent irrevocable notice in the
form of Exhibit C-1 (a "Pro Rata Borrowing Request") (which notice
must be received by the Operating Agent prior to 11:00 A.M., New
York City time) (i) three (3) Eurodollar Business Days prior to the
requested borrowing date for Interest Periods less than or equal to
<PAGE> Exhibit 10(a)
-------------
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six (6) months or four (4) Eurodollar Business Days prior to the
requested borrowing date for Interest Periods greater than six (6)
months, in the case of Eurodollar Rate Advances, and (ii) one (1)
Business Day prior to the requested borrowing date, in the case of
Reference Rate Advances (except as otherwise provided in Section
2.02(l)), specifying:
(A) the amount of the Pro Rata Borrowing, which
shall be in an aggregate minimum principal amount of Ten
Million Dollars ($10,000,000) or any multiple of One
Million Dollars ($1,000,000) in excess thereof;
(B) the requested borrowing date;
(C) whether the Pro Rata Borrowing is to be
comprised of Eurodollar Rate Advances or Reference Rate
Advances; and
(D) in the case of Eurodollar Rate Advances, the
duration of the Interest Period applicable to such
Advances included in such notice, subject to the
definition of Interest Period. If the notice shall fail
to specify the duration of the Interest Period for any
Borrowing comprised of Eurodollar Rate Advances, such
Interest Period shall be three (3) months, subject to
the definition of Interest Period.
(b) Upon receipt of such notice from the Company, the
Operating Agent shall promptly notify each Bank thereof and of the
amount of such Bank's portion of the respective Pro Rata Borrowing.
(c) Subject to the provisions of Section 2.05, each
Bank will make the amount of its pro rata share of each Borrowing
available to the Operating Agent for the account of the Company at
the Payment Office by 11:00 A.M. (New York City time) on the
borrowing date requested by the Company in funds immediately
available to the Operating Agent. Unless any applicable condition
specified in Article IV has not been satisfied, the proceeds of all
such Advances will then be made available to the Company by the
Operating Agent at the Payment Office by crediting the account of
the Company on the books of the Payment Office with the aggregate
of the amounts made available to the Operating Agent by the Banks
and in like funds as received by the Operating Agent.
(d) The provisions of Section 2.04(a) notwithstanding,
if the Company shall not have given a timely notice of a Pro Rata
Borrowing to be made on the last day of any Interest Period for
outstanding Eurodollar Rate Advances, then unless the Operating
Agent shall have received notice that the Company elects not to
make a Pro Rata Borrowing on such day (such notice to have been
received at least one (1) Business Day prior to such day) the
Operating Agent shall be deemed to have received a notice of
<PAGE> Exhibit 10(a)
-------------
( 25 of 152)
borrowing from the Company requesting Reference Rate Advances to be
made on such day in an amount equal to the amount of such
outstanding Advances (reduced to the extent necessary to reflect
any reductions of the Commitments on or prior to such day).
2.05 Refunding Borrowings. If any Bank makes a new Advance
on a day on which the Company is to repay all or any part of any
outstanding Advance from such Bank, such Bank shall apply the
proceeds of its new Advance to make such repayment, and only an
amount equal to the difference, if any, between the amount being
borrowed and the amount being repaid shall be made available by
such Bank to the Operating Agent as provided in Section 2.04 or
remitted by the Company to the Operating Agent as provided in
Section 2.14, as the case may be.
2.06 Optional Termination or Reduction of Commitments.
During the Availability Period, the Company may, upon not less than
three (3) Business Days' prior notice to the Operating Agent,
terminate the Commitments or permanently reduce the Commitments by
an aggregate minimum amount of Ten Million Dollars ($10,000,000) or
any multiple of One Million Dollars ($1,000,000) in excess thereof,
provided that (i) no such reduction or termination shall be
permitted if, after giving effect thereto and to any prepayments of
the Advances made on the effective date thereof, the then
outstanding principal amount of the Advances would exceed the
amount of the Commitments then in effect and (ii) once reduced or
terminated pursuant to this Section 2.06, the Commitments may not
be reinstated. If the Commitments are terminated in their entirety
pursuant to this Section 2.06, all fees accrued to but not
including the effective date of such termination shall be payable
on the effective date of such termination without any premium or
penalty.
2.07 Optional Prepayments of Pro Rata Advances. The Company
may (i) upon at least two (2) Business Days' notice to the
Operating Agent, prepay Reference Rate Advances, in whole or in
part, without premium or penalty, and (ii) subject to Section 2.18,
prepay Eurodollar Rate Advances upon at least five (5) Eurodollar
Business Days' irrevocable notice to the Operating Agent,
specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Rate Advances or Reference Rate
Advances, or a combination thereof, and if a combination thereof
the amount of prepayment allocable to each. Upon receipt of such
notice, the Operating Agent shall promptly notify each Bank
thereof. If such notice shall be given, the Company shall make
such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid unless,
notwithstanding the irrevocability of its notice of prepayment, the
Company shall notify the Operating Agent prior to the date of such
prepayment that such prepayment will not be made (in which case
such amount shall not be due and payable on such date and the
provisions of Section 2.18 shall apply). Prepayments shall be in
<PAGE> Exhibit 10(a)
-------------
( 26 of 152)
a minimum amount equal to Ten Million Dollars ($10,000,000) and in
multiples of One Million Dollars ($1,000,000) in excess thereof.
2.08 Repayment of Advances. Each Pro Rata Advance shall
mature, and the principal amount thereof shall be due and payable,
on the Interest Payment Date for such Pro Rata Advance (which shall
in no event be later than the Termination Date); provided, that
each Reference Rate Advance shall mature, and the principal amount
thereof shall be due and payable on, the Termination Date. Each
Competitive Bid Advance shall mature, and the principal amount
thereof shall be due and payable, on a date determined as specified
in Section 2.02(j).
2.09 Termination Date.
(a) The Commitments shall terminate on the Termination
Date, and any Advances then outstanding (together with accrued
interest thereon) shall be due and payable on such date without
premium or penalty. Upon termination of the Commitments pursuant
to this Section 2.09, all fees and other amounts owing hereunder or
otherwise accrued to but not including the effective date of such
termination shall be payable on the effective date of such
termination without premium or penalty.
(b) The Commitments once terminated pursuant to this
Section 2.09 may not be reinstated.
2.10 Fees.
(a) Facility Fee. The Company will pay to the
Operating Agent, for the account of each Bank, a facility fee equal
to the percentage per annum set forth on the Pricing Grid for the
applicable Pricing Level and such facility fee shall begin to
accrue from and including the Effective Date to but excluding the
Termination Date on the sum of the daily average amounts of such
Bank's Commitment, regardless of utilization, payable (A) quarterly
in arrears on each February 15, May 15, August 15 and November 15,
commencing on August 15, 1994 and (B) on the Termination Date.
(b) Additional Fees. The Company will pay (i) to each
Agent an agency fee payable in the amounts and on the dates
separately agreed between such Agent and the Company, and (ii) to
the Syndication Agent, an arrangement fee in the amount and on the
date separately agreed between BA Securities and the Company.
2.11 Interest.
(a) Interest on Pro Rata Advances. Each Pro Rata
Advance shall bear interest on the unpaid principal amount thereof
from the date of such Pro Rata Advance until it shall become due at
a rate per annum equal to (i) the Eurodollar Rate for the Interest
Period therefor plus the Applicable Margin set forth on the Pricing
Grid for the applicable Pricing Level, in the case of each
<PAGE> Exhibit 10(a)
-------------
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Eurodollar Rate Advance, and (ii) the Reference Rate in effect from
time to time, in the case of each Reference Rate Advance.
(b) Interest on Competitive Bid Advances. Each
Competitive Bid Advance shall bear interest from the date of such
Competitive Bid Advance until the date it shall become due at a
rate of interest determined as specified in Section 2.02(k).
(c) Interest on Overdue Amounts. If all or a portion of
the principal amount of any Advance, any interest thereon or any
other amount payable hereunder shall not be paid when due (whether
at stated maturity, by acceleration or otherwise), such overdue
principal amount, such interest (to the extent permitted by
applicable law) or such other amount, as the case may be, shall,
without limiting the rights of any of the Banks under Article VII,
bear interest at a rate per annum equal to the Reference Rate in
effect from time to time plus 2% until paid in full and shall be
payable on demand.
(d) Additional Interest on Eurodollar Rate Advances.
The Company shall pay to each Bank, upon written notice from such
Bank at least fifteen (15) days prior to the relevant Interest
Payment Date, as long as such Bank shall, pursuant to regulations
of the Federal Reserve Board, maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Bank, from the date of such
Advance until such principal amount shall be paid in full, at an
interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing the
Eurodollar Rate for such Interest Period by a percentage equal to
100% minus the Eurodollar Reserve Percentage of such Bank for such
Interest Period, payable on the Interest Payment Date for such
Advance. If a Bank shall fail to give such notice at least fifteen
(15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt
of such notice. Such additional interest shall be determined by
such Bank in accordance with this Section 2.11(d) and reported to
the Company through the Operating Agent.
(e) Payment of Interest on Pro Rata Advances. Interest
on each Pro Rata Advance shall be payable in arrears on each
Interest Payment Date with respect thereto; provided, that with
respect to any Eurodollar Rate Advance which shall become due more
than three months after the date of such Advance, the Company shall
also pay interest on the dates falling three, six and nine months,
as the case may be, after the date of such Advance. Interest shall
also be payable on the date of any prepayment of Advances for the
portion of the Advances so prepaid and upon payment (including
prepayment) in full thereof and, if payable under Section 2.11(c),
interest shall be payable on demand.
<PAGE> Exhibit 10(a)
-------------
( 28 of 152)
(f) Maximum Interest Rate. Anything herein or in any
Note to the contrary notwithstanding, the obligations of the
Company to any Bank hereunder or under any Note shall be subject to
the limitation that payments of interest shall not be required for
any period for which interest is computed hereunder, to the extent
(but only to the extent) that contracting for or receiving such
payment by such Bank would be contrary to the provisions of any law
applicable to such Bank limiting the highest rate of interest that
may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the
highest rate permitted by applicable law.
2.12 Computation of Interest, Fees and Other Amounts.
(a) All interest payable hereunder with respect to
Reference Rate Advances shall be calculated on the basis of a year
of 365/366 days for the actual days elapsed. All other interest,
fees and other amounts payable hereunder shall be calculated on the
basis of a 360 day year for the actual days elapsed. The Operating
Agent shall, as soon as practicable, notify the Company and the
Banks of each determination of a Eurodollar Rate, provided that any
failure to do so shall not relieve the Company of any liability
under this Agreement. Any change in the interest rate applicable
to an Advance resulting from a change in the Eurodollar Reserve
Percentage or the Reference Rate shall become effective as of the
opening of business on the day on which such change in the
Eurodollar Reserve Percentage or the Reference Rate shall become
effective. Any change in any interest, fees and other amounts
payable hereunder resulting from a change in or termination of a
rating of outstanding long term senior unsecured debt of the
Company by any Rating Agency shall become effective as of the
opening of business on the day on which such change in rating is
announced by such agency. The Operating Agent shall, as soon as
practicable, notify the Company and the Banks of the effective date
and the amount of each such change; provided, that any failure to
give any such notice shall not relieve the Company of any liability
under this Agreement.
(b) Each determination of an interest rate by the
Operating Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Company and the Banks in the
absence of manifest error; and each determination by a Bank of an
amount payable by the Company under Section 2.11(d) shall be
conclusive and binding on the Company in the absence of manifest
error.
(c) If any Reference Bank's Commitment shall terminate
(otherwise than upon termination of all the Commitments) or for any
reason whatsoever such Reference Bank shall cease to be a Bank
hereunder, such Reference Bank shall thereupon cease to be a
Reference Bank, and if, as a result of the foregoing, there shall
only be one Reference Bank remaining, then the Majority Banks shall
select a Bank, acceptable to the Operating Agent and the Company,
<PAGE> Exhibit 10(a)
-------------
( 29 of 152)
to be a Reference Bank, and the Operating Agent shall, by notice to
the Company and the Banks, designate such Bank as a Reference Bank
so that there shall at all times be at least two (2) Reference
Banks; provided that such designated Bank agrees to be a Reference
Bank.
(d) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Operating Agent as contemplated
hereby. If any of the Reference Banks shall be unable or otherwise
fails to supply such rates to the Operating Agent upon its request,
the rate of interest shall be determined on the basis of the
quotations of the remaining Reference Banks or Reference Bank.
2.13 Inability to Determine Interest Rate for Pro Rata
Advances. In the event that (a) any two (2) Reference Banks or the
Operating Agent or the Majority Banks shall have determined (which
determination shall be conclusive and binding upon the Company)
that for any reason, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Pro Rata Advance that the Company has
requested be made as a Eurodollar Rate Advance, or (b) any two (2)
Reference Banks or the Operating Agent or the Majority Banks shall
determine (which determination shall be conclusive and binding upon
the Company) that the Eurodollar Rate applicable pursuant to
Section 2.11(a) for any requested Interest Period with respect to
a proposed Pro Rata Advance that the Company has requested be made
as a Eurodollar Rate Advance does not adequately and fairly reflect
the cost to the Majority Banks of funding such Pro Rata Advance,
the Operating Agent shall forthwith give notice of such
determination to the Company and each Bank at least one day prior
to the proposed borrowing date for such Eurodollar Rate Advance.
If such notice shall be given, such requested Eurodollar Rate
Advance shall be made as a Reference Rate Advance. Until such
notice shall have been withdrawn by the Operating Agent, no further
Eurodollar Rate Advances may be requested by the Company.
2.14 Pro Rata Treatment and Payments.
(a) Payments by the Company.
(i) Except as otherwise specifically provided in
this Agreement, all payments (including prepayments) to be
made by the Company on account of principal, interest and fees
shall be made without set-off or counterclaim and shall be
made to the Operating Agent for account of the Banks to which
such payments shall be owing, pro rata in accordance with the
respective amount then payable, at the Payment Office in
Dollars and in immediately available funds no later than 11:00
A.M. (New York City time). The Operating Agent shall
distribute such payments to the Banks to which such payments
shall be owing promptly upon receipt on the date of receipt
<PAGE> Exhibit 10(a)
-------------
( 30 of 152)
and in like funds as received. Any payment that shall be
received by the Operating Agent later than 11:00 A.M. (New
York City time) shall be deemed to have been received on the
immediately succeeding Business Day.
(ii) If any payment (other than a payment of
principal of or interest on a Eurodollar Rate Advance or
Competitive Bid Eurodollar Advance, which shall be due on the
last day of the applicable Interest Period) shall be stated to
be payable on a day that shall not be a Business Day, such
payment shall be due on the next succeeding Business Day, and
such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(iii) Except as provided in Section 2.04(d), unless
the Operating Agent shall have received notice from the
Company prior to the date on which any payment shall be due to
the Banks hereunder that the Company will not make such
payment in full, the Operating Agent may assume that the
Company has made such payment in full to the Operating Agent
on such date and the Operating Agent may (but it shall not be
required to), in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due to such Bank. If and to the extent that
the Company shall not have made such payment in full to the
Operating Agent, each Bank shall repay to the Operating Agent
forthwith on demand the amount distributed to such Bank,
together with interest thereon for each day, from the date
such amount shall have been distributed to such Bank until the
date such Bank shall repay such amount to the Operating Agent,
at the Federal Funds Rate as in effect on such day.
(iv) The Operating Agent shall, as soon as
practicable, notify the Company of the amounts of principal,
interest and fees payable by the Company under this Agreement;
provided, that the failure to give any such notice shall not
relieve the Company of any liability under this Agreement.
(b) Payments by the Banks to the Operating Agent.
(i) On the date of each Pro Rata Borrowing, each
Bank shall make available to the Operating Agent in
immediately available funds for the account of the Company an
amount equal to such Bank's Commitment Percentage of any Pro
Rata Borrowing as provided in Section 2.04.
(ii) Subject to the provisions of Section 2.04, the
Operating Agent may (unless notified to the contrary by a Bank
prior to a borrowing date) assume, with respect to each Pro
Rata Borrowing, that each Bank has made available an amount
equal to such Bank's Commitment Percentage of such Pro Rata
<PAGE> Exhibit 10(a)
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( 31 of 152)
Borrowing to the Operating Agent on such borrowing date, and
the Operating Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Company
a corresponding amount. If and to the extent that such Bank
shall not have made such amount available to the Operating
Agent and the Operating Agent in such circumstances makes
available such amount to the Company, such Bank shall make
such amount available to the Operating Agent within two (2)
Business Days after such borrowing date, together with
interest at the Federal Funds Rate for each day from and
including such borrowing date. A certificate of the Operating
Agent submitted to any Bank with respect to any amounts owing
under this Section 2.14(b) shall be conclusive, absent
manifest error. If an amount equal to such Bank's Commitment
Percentage of such Pro Rata Borrowing shall not be made
available to the Operating Agent by such Bank within two (2)
Business Days after such borrowing date, the Company shall pay
such amount, on demand, to the Operating Agent, with interest
thereon, from such borrowing date to the date of payment to
the Operating Agent, at the interest rate per annum applicable
at the time to the Advances comprising such Pro Rata Borrowing
(but no such payment by the Company shall be deemed to be a
prepayment of an Advance for purposes of Section 2.18).
(iii) Nothing in this Section 2.14(b) shall relieve
any Bank of its obligation to make available an amount equal
to its Commitment Percentage of any Pro Rata Advance, but no
Bank shall be responsible for the failure of any other Bank to
make the Pro Rata Advance to be made by such other Bank on the
date of any Pro Rata Borrowing.
2.15 Taxes.
(a) Subject to Section 2.15(g), any and all payments by
the Company to the Banks or the Agents under this Agreement or
any Notes shall be made free and clear of, and without
deduction or withholding for, any and all present or future
taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the
case of each Bank and each Agent, such taxes (including income
taxes or franchise taxes) as shall be imposed on or measured
by the net income of such Bank or such Agent by the
jurisdiction under the laws of which such Bank or Agent, as
the case may be, is organized or maintains a Lending Office or
by any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Company agrees to pay any present
or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any
payment made hereunder or under any Notes or from the
execution,
<PAGE> Exhibit 10(a)
-------------
( 32 of 152)
delivery or registration of, or otherwise with respect to, this
Agreement or any Notes (hereinafter referred to as "Other Taxes").
(c) Subject to Section 2.15(g), the Company will
indemnify and hold harmless each Bank and each Agent for the full
amount of Taxes or Other Taxes (including without limitation any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.15), as well as any recording or filing fees
paid in connection with this Agreement or any other Loan Document,
paid by such Bank or such Agent, as the case may be, and any
liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes or recording or filing fees were
correctly or legally asserted. This indemnification shall be made
within thirty (30) days from the date such Bank or such Agent, as
the case may be, shall make written demand therefor.
(d) If the Company shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Bank or Agent, then, subject to Section
2.15(g),
(i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.15) such Bank or Agent, as the case may
be, receives an amount equal to the sum it would have received
had no such deductions been made,
(ii) the Company shall make such deductions, and
(iii) the Company shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable law.
Without limiting or restricting any Bank's right to payments under
this Section 2.15(d) from the Company upon satisfaction of such
Bank's obligations under Section 2.15(f) hereof, if any Bank is
entitled to a reduction in the applicable withholding tax solely by
reason of a filing of a Form 1001 or other documentation referred
to in Section 2.15(f) hereof, the Company may withhold from any
interest payment to such Bank an amount equivalent to the
applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by Section
2.15(f) are not delivered to the Operating Agent, then the Company
may withhold from any interest payment to such Bank not providing
such forms or other documentation an amount equivalent to the
applicable withholding tax. In addition, the Company may also
withhold from periodic payments to such Bank (other than principal
payments), to the extent the United States withholding tax is not
eliminated by obtaining a Form 4224 or a Form 1001.
<PAGE> Exhibit 10(a)
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( 33 of 152)
(e) Within thirty (30) days after the date of any
payment by the Company of Taxes or Other Taxes, the Company will
furnish to the Operating Agent the original or a certified copy of
a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Operating Agent.
(f) Each Bank which shall be a foreign person (a person
other than a United States person for United States Federal income
tax purposes) hereby agrees that:
(i) it shall, no later than the Effective Date
(or, in the case of a Bank which shall become a party hereto
pursuant to Section 9.07 after the Effective Date, the date
upon which such Bank shall become a party hereto) deliver to
the Operating Agent (I) if any Lending Office is located in
the United States, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 (or any
successor thereto) ("Form 4224"), and/or (II) if any Lending
Office is located outside the United States, two (2) accurate
and complete signed originals of Internal Revenue Service Form
1001 (or any successor thereto) ("Form 1001"), in each case
indicating that such Bank is on the date of delivery thereof
entitled to receive payments of principal, interest and fees
for the account of such Lending Office or Lending Offices
under this Agreement free from withholding of United States
Federal income tax, in the case of Form 1001, pursuant to a
United States tax treaty currently in effect and for which
notice of termination has not been given (and, if any
political subdivision of the United States shall impose
similar reporting requirements with respect to payments to
such Bank under this Agreement and such Bank shall receive
notice from the Company of the same, such Bank shall deliver
any applicable forms to the Operating Agent promptly after
receipt of such notice);
(ii) if at any time such Bank shall change its
Lending Office or Lending Offices or select an additional
Lending Office as herein provided, it shall, at the same time
or reasonably promptly thereafter, deliver to the Operating
Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder (I) if such changed or
additional Lending Office is located in the United States, two
(2) accurate and complete signed originals of Form 4224 or
(II) otherwise, two (2) accurate and complete signed originals
of Form 1001, in each case indicating that such Bank is on the
date of delivery thereof entitled to receive payments of
principal, interest and fees for the account of such changed
or additional Lending Office under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence
of any event (including the passing of time but excluding any event
mentioned in (ii) above) requiring a
<PAGE> Exhibit 10(a)
-------------
( 34 of 152)
change in the most recent Form 4224 or Form 1001 previously
delivered by such Bank and if the delivery of the same be lawful,
deliver to the Operating Agent two (2) accurate and complete
original signed copies of Form 4224 or Form 1001 in replacement for
the forms previously delivered by such Bank;
(iv) if such Bank claims exemption from withholding
tax under a United States tax treaty by providing a Form 1001
and such Bank sells or grants a participation of all or part
of its rights under this Agreement, such Bank shall notify the
Operating Agent of the percentage amount in which it is no
longer the beneficial owner under this Agreement. To the
extent of this percentage amount, the Operating Agent shall
treat such Bank's Form 1001 as no longer in compliance with
this Section 2.15(f). In the event a Bank claiming exemption
from United States withholding tax by filing Form 4224 with
the Operating Agent, sells or grants a participation in its
rights under this Agreement, such Bank agrees to undertake
sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code;
(v) if the Internal Revenue Service or any
authority of the United States of America or other
jurisdiction successfully asserts a claim that the Operating
Agent or the Company did not properly withhold tax from
amounts paid to or for the account of any Bank (because the
appropriate form was not delivered, was not properly executed,
or because such Bank failed to notify the Operating Agent of
a change in circumstances which rendered the exemption from
withholding tax ineffective), such Bank shall indemnify the
Operating Agent and/or the Company, as applicable, fully for
all amounts paid, directly or indirectly, by the Operating
Agent and/or the Company, as applicable, as tax or otherwise,
including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the
Operating Agent and/or the Company, as applicable under this
paragraph (f), together with all costs, expenses and
attorneys' fees (including the reasonable allocated costs for
in-house staff counsel); and
(vi) it shall, promptly upon the Operating Agent's
or the Company's reasonable request to that effect, deliver to
the Operating Agent such other forms or similar documentation
as may be required from time to time by any applicable law,
treaty, rule or regulation in order to establish such Bank's
tax status for withholding purposes.
(g) The Company will not be required to pay any
additional amounts in respect of United States Federal income tax
pursuant to Section 2.15(d) (i), (ii) and (iii) to any Bank for the
account of any Lending Office of such Bank:
<PAGE> Exhibit 10(a)
-------------
( 35 of 152)
(i) if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to
comply with its obligations under Section 2.15(f) in respect of
such Lending Office;
(ii) if such Bank shall have delivered to the
Company a Form 4224 in respect of such Lending Office pursuant
to Section 2.15(f) and such Bank shall not at any time be
entitled to exemption from deduction or withholding of United
States Federal income tax in respect of payments by the
Company hereunder for the account of such Lending Office for
any reason other than a change in United States law or
regulations or in the official interpretation of such law or
regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such
Form 4224; or
(iii) if such Bank shall have delivered to the
Company a Form 1001 in respect of such Lending Office pursuant
to Section 2.15(f) and such Bank shall not at any time be
entitled to exemption from deduction or withholding of United
States Federal income tax in respect of payments by the
Company hereunder for account of such Lending Office for any
reason other than a change in United States law or regulations
or any applicable tax treaty or regulations or in the official
interpretation of any such law, treaty or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
(h) If, at any time, the Company shall request any Bank
to deliver any forms or other documentation pursuant to Section
2.15(f)(iv), then the Company shall, on demand of such Bank through
the Operating Agent, reimburse such Bank for any reasonable costs
or expenses incurred by such Bank in the preparation or delivery of
such forms or other documentation.
(i) Any Bank requesting payment under this Section 2.15
shall notify the Company by providing the Company with written
details of the relevant Taxes or Other Taxes or recording or filing
fees as promptly as practicable under the circumstances with a view
to avoiding or mitigating any Taxes or Other Taxes or recording or
filing fees that shall be capable of being avoided or mitigated.
(j) If the Company shall be required to pay additional
amounts to any Bank pursuant to Section 2.15(d), then such Bank
shall use its best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so
as to eliminate any such additional payment by the Company which
may thereafter accrue if such change in the judgment of such Bank
shall not otherwise be disadvantageous to such Bank.
<PAGE> Exhibit 10(a)
-------------
( 36 of 152)
(k) Each Bank also agrees to take any other action
(including, without limitation, properly claiming the benefit of
any exemption from or reduction of such Taxes) which in its
judgment is reasonable to avoid or reduce any Taxes or Other Taxes
(including penalties, interest additions to tax and expenses) that
might otherwise be payable; provided that such Bank shall not be
required to (i) take any action which in the reasonable judgment of
such Bank could directly or indirectly result in any increased cost
or expense or in any loss of opportunity to such Bank unless the
Company shall have provided to such Bank indemnity or reimbursement
therefor in form and substance reasonably satisfactory to such Bank
or (ii) claim or apply any tax credit or deduction against or in
respect of such Taxes.
(l) The Operating Agent shall, (i) promptly after
receiving from any Bank any form or other document required under
this Section 2.15, send a copy thereof to the Company and (ii)
promptly after receiving from the Company any document required
under this Section 2.15 in respect of any Bank, send a copy thereof
to such Bank.
(m) The obligations of the Company under this Section
2.15 shall not apply to Taxes or Other Taxes arising in respect of
Competitive Bid Advances except to the extent that such Taxes or
Other Taxes shall be the subject of Section 2.17.
(n) Notwithstanding anything in Section 2.15(c) to the
contrary, the Company shall not be liable to any Bank for any fees
or liabilities under this Section 2.15 resulting from any delay in
paying any Taxes or Other Taxes or recording or filing fees, if
such fees or liabilities accrued after the Company has paid to such
Bank the full amount of such Taxes or Other Taxes and any and all
such fees or liabilities accrued to the date of such payment by the
Company.
(o) The agreements and obligations of the Company
contained in this Section 2.15 shall survive for ten (10) years
after the termination of the Commitments and the payment of the
Advances and all other amounts payable under this Agreement.
2.16 Illegality.
(a) If the introduction of any Requirement of Law or
any change therein or in the interpretation or application thereof
shall make it unlawful for any Bank to make or maintain Eurodollar
Rate Advances or Competitive Bid Eurodollar Advances, then on
notice thereof by such Bank to the Company through the Operating
Agent, the Commitment of such Bank hereunder to make Eurodollar
Rate Advances and the obligation, if any, of such Bank under a
LIBOR Bid made under Section 2.02 to make Competitive Bid
Eurodollar Advances shall forthwith be suspended until such
notifying Bank shall have notified the Operating Agent and the
<PAGE> Exhibit 10(a)
-------------
( 37 of 152)
Company that the circumstances giving rise to such determination no
longer exist (and if such notifying Bank shall determine that such
circumstances no longer exist it shall so notify the Operating
Agent and the Company promptly after determining the same). During
such period of suspension as to any Bank, any Pro Rata Borrowing
consisting of Eurodollar Rate Advances by other Banks shall, if the
Company shall so request, include a Reference Rate Advance rather
than a Eurodollar Rate Advance by the Bank subject to such
suspension.
(b) If it shall be unlawful to maintain any Eurodollar
Rate Advance or Competitive Bid Eurodollar Advance until the
maturity date thereof, the Company shall prepay such Eurodollar
Rate Advance or Competitive Bid Eurodollar Advance, and shall pay
to such Bank such amounts, if any, as may be required pursuant to
Section 2.18, no later than the last day on which such Advance
could be lawfully maintained. Concurrently with any prepayment of
any Eurodollar Rate Advance pursuant hereto to any Bank, the
Company may borrow from such Bank a Reference Rate Advance for a
period ending on the same day as the then current Interest Period
for the Eurodollar Rate Advance so prepaid.
(c) Before giving any notice pursuant to this Section
2.16, the affected Bank shall use its best efforts to designate a
new Lending Office if such designation will avoid the need for
giving such notice or making such demand and will not, in the
judgment of such Bank, subject such Bank to additional costs or
otherwise be disadvantageous to such Bank.
2.17 Requirements of Law.
(a) In the event that any Requirement of Law or any
change therein or in the interpretation or application thereof by
any Governmental Authority or compliance by any Bank with any
directive, guideline or request from any Governmental Authority of
or in the United States, the United Kingdom or the jurisdiction in
which such Bank shall maintain its headquarters or any Lending
Office, whether or not having the force of law:
(i) shall after the date hereof subject any Bank
to any tax or taxes (including, without limitation, Taxes) of
any kind whatsoever (except for taxes on or measured by the
overall net income of such Bank or its applicable Lending
Office and taxes otherwise unrelated to the transactions
contemplated by this Agreement) with respect to this
Agreement, any Note or any Eurodollar Rate Advances or
Competitive Bid Advances made by it, or change the basis of
taxation of payments to such Bank of principal, fees, interest
or any other amount payable hereunder (other than with respect
to taxes unrelated to the transactions contemplated by this
Agreement); or
<PAGE> Exhibit 10(a)
-------------
( 38 of 152)
(ii) shall after the date hereof impose, modify or
hold applicable any reserve, special deposit, compulsory loan
or similar requirement (other than reserve requirements to
which Section 2.11(d) shall apply) against assets held by,
deposits in or other liabilities for the account of, advances
or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Bank which are not
otherwise included in the determination of the interest rate
applicable to any Competitive Bid Advance and are not included
within the scope of paragraph (i) of this Section 2.17(a),
and the result of any of the foregoing is to increase the cost to
such Bank (or its Lending Office) of making, renewing or
maintaining any Eurodollar Rate Advance or Competitive Bid Advance
or to reduce the amount received or receivable hereunder by such
Bank (or its Lending Office) by or in an amount that such Bank
shall deem material, then, within thirty (30) days after demand by
such Bank (with a copy to the Operating Agent), the Company shall
promptly pay such Bank any additional amounts necessary to
compensate such Bank for such additional cost or reduction. A
certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by any such Bank to the Company and
containing a description of the applicable Requirement of Law,
interpretation, application, directive, guideline or request and a
calculation of such additional amounts shall be conclusive in the
absence of manifest error. If the Company shall be required to pay
any amount to any Bank pursuant to this Section 2.17(a), then such
Bank shall use its best efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending
Office so as to eliminate any such payment by the Company which may
thereafter accrue if such change in the judgment of such Bank shall
not otherwise be disadvantageous to such Bank. This covenant shall
survive for five (5) years (or, in the case of the matters referred
to in (i) above, ten (10) years) after the termination of the
Commitments and payment of the Advances and all other amounts
payable under this Agreement.
(b) If any Bank shall have determined that the
introduction of any applicable law, rule or regulation regarding
capital adequacy, or any change therein or any change in
administration thereof by any Governmental Authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or the compliance by any Bank (or its
Lending Office) or any corporation controlling such Bank with any
request, guideline or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank
or comparable agency, whether introduced, adopted, promulgated or
issued before, on or after the date hereof, affects or would affect
the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank and such Bank (taking
<PAGE> Exhibit 10(a)
-------------
( 39 of 152)
into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's or such corporation's
desired return on capital) determines that the amount of such
capital is increased or such Bank's or such corporation's return on
capital is reduced as a consequence of such Bank's obligations
under this Agreement, then, upon demand of such Bank, the Company
shall immediately pay to such Bank, from time to time as specified
by such Bank, additional amounts sufficient to compensate such Bank
for such increase or reduction, as the case may be. A certificate
as to any additional amounts payable pursuant to the foregoing
sentence submitted by any such Bank to the Company and containing
a description of such law, rule, regulation, change, request,
guideline or directive and a calculation of such additional amounts
shall be conclusive in the absence of manifest error. The Company
shall pay such Bank the amount shown as due on any such certificate
within thirty (30) days after its receipt of the same. This
covenant shall survive for five (5) years after the termination of
the Commitments and payment of the Advances and all other amounts
payable under this Agreement.
(c) In the event that the Company becomes obligated to
pay additional amounts to any Bank pursuant to Section 2.17(b)
then, unless such Bank has theretofore removed or cured the
conditions creating the cause for such obligation to pay such
additional amounts, after payment by the Company of all amounts
owing to such Bank under Section 2.17(b) hereof, the Company may
designate a Bank (not similarly affected under Section 2.17(b)
hereof) or another bank which is willing to become a Bank and is
acceptable (which acceptance shall not be unreasonably withheld) to
the Operating Agent (such Bank or bank being herein called a
"Replacement Bank") to purchase the Advances of such Bank and such
Bank's rights hereunder, without recourse to or warranty by, or
expense to, such Bank for a purchase price equal to the outstanding
principal amount of the Advances payable to such Bank plus any
accrued but unpaid interest on such Advances and accrued but unpaid
fees and any other amounts payable to such Bank under this
Agreement, and to assume the obligations of such Bank hereunder
pursuant to Section 9.07(a) hereof, and, upon such purchase, such
Bank shall no longer be a party hereto or have any rights hereunder
and shall be relieved of all obligations to the Company hereunder
(except for such rights as survive repayment of the Advances), and
the Replacement Bank shall succeed to the rights (except for such
rights of the assigning Bank as survive repayment of the Advances)
and obligations of such Bank hereunder.
2.18 Funding Losses. The Company agrees to reimburse each
Bank and hold such Bank harmless from any loss or expense which
such Bank may sustain or incur as a direct consequence of:
<PAGE> Exhibit 10(a)
-------------
( 40 of 152)
(a) default by the Company in the payment when due of
the principal amount of or interest on any Eurodollar Rate Advance
or Competitive Bid Advance of such Bank,
(b) failure by the Company to make a Borrowing (except
to the extent that any Bank shall fail to perform its obligation to
make funds available to the Company for such Borrowing) after the
Company has given (or is deemed to have given) a notice of
borrowing in accordance with Section 2.02 or 2.04,
(c) failure by the Company to make any prepayment of an
Advance after the Company has given a notice in accordance with
Section 2.07, and/or
(d) the making by the Company of a prepayment of a
Eurodollar Rate Advance or a Competitive Bid Advance on a day which
is not the last day of the Interest Period with respect thereto,
including, without limitation, an amount equal to the excess, if
any, as reasonably determined by such Bank, of (i) its cost of
obtaining funds for the Advance not paid when due, or not borrowed
or prepaid as scheduled, or prepaid on a day other than the last
day of its Interest Period (based on the Eurodollar Rate or
Competitive Bid Eurodollar Rate or interest rate based on an
Absolute Bid, as applicable) for the period from the date of such
nonpayment, failure to borrow or prepay, or prepayment, as the case
may be, to the last day of the Interest Period for such Advance
(or, in the case of a failure to borrow, the Interest Period for
such Advance which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined
by such Bank) that would be realized by such Bank in reemploying
the funds so prepaid or not paid, borrowed or prepaid for such
period or Interest Period, as the case may be. A certificate of
any Bank setting forth any amount or amounts which such Bank shall
be entitled to receive pursuant to this Section shall be delivered
to the Company, together with a reasonable explanation thereof, and
shall be conclusive absent manifest error. The Company shall pay
such Bank the amount shown as due on any such certificate within
thirty (30) days after its receipt of the same. This covenant
shall survive for two (2) years after termination of the
Commitments and payment of the Advances and all other amounts
payable under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to each Agent and
each Bank that:
<PAGE> Exhibit 10(a)
-------------
( 41 of 152)
3.01 Corporate Existence and Power. Each of the Company and
its Subsidiaries:
(a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the corporate power and authority and the legal
right to own and operate its property, to lease any property it
operates as lessee and to conduct the business in which it is
currently engaged;
(c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification; and
(d) is in compliance with all Requirements of Law,
except, in the case of the Company or Subsidiaries of the Company
and in each case referred to in paragraph (c) or paragraph (d), to
the extent that the failure to do so would not have a material
adverse effect on the business, operations, properties or condition
(financial or otherwise) of the Company and its Subsidiaries taken
as a whole.
3.02 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company of this
Agreement and the Notes and the performance by the Company of its
obligations hereunder:
(a) are within the corporate power and authority of the
Company and have been duly authorized by all necessary corporate
action; and
(b) do not contravene the terms of the Company's
Certificate of Incorporation or By-Laws, or any amendment thereof.
3.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority is necessary or required in
connection with the execution, delivery, performance or (with
respect to any Governmental Authority of the United States charged
with regulating telecommunications) enforcement against the Company
of this Agreement or the Notes, except such governmental
authorizations which have been duly obtained and are in full force
and effect.
3.04 Binding Effect. This Agreement, and the Notes when
executed, constitute the legal, valid and binding obligations of
the Company enforceable against the Company in accordance with
<PAGE> Exhibit 10(a)
-------------
( 42 of 152)
their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
3.05 No Legal Bar. The execution, delivery and performance
of this Agreement and the Notes, the borrowings hereunder and the
use of the proceeds thereof as presently contemplated, will not
violate any Requirement of Law or any Contractual Obligation of the
Company and will not, pursuant to any Requirement of Law or
Contractual Obligation, result in, or require, the creation or
imposition of any Lien on any property or revenues of the Company
or any of its Subsidiaries to an extent that is material in
relation to the Company and its Subsidiaries taken as a whole.
3.06 Litigation.
(a) Except as set forth in Schedule III hereto, there
are no actions, suits, proceedings, claims or disputes pending, or
to the best knowledge of the Company, threatened or contemplated at
law, in equity, in arbitration or before any Governmental Authority
against the Company or any of its Subsidiaries or any of their
respective properties:
(i) with respect to this Agreement or any Note or
any other transaction contemplated hereby or thereby; or
(ii) which have a reasonable possibility of being
determined adversely to the Company or such Subsidiary and if
so determined would have a material adverse effect on the
business, operations, properties or financial condition of the
Company and its Subsidiaries taken as a whole or could have a
material adverse effect on the ability of the Company to
perform its obligations under this Agreement and the Notes.
(b) To the best knowledge of the Company, no
injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery and
performance of this Agreement or any Note or directing that the
transactions provided for herein not be consummated as herein
provided.
3.07 No Default. No event has occurred and is continuing or
would result from the incurring of obligations by the Company under
this Agreement or any other Loan Document which constitutes a
Default or an Event of Default. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any Contractual
Obligation or any order of any court, arbitrator or Governmental
Authority in any respect which, individually or together with all
<PAGE> Exhibit 10(a)
-------------
( 43 of 152)
such defaults, could be materially adverse to the business,
operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole or which could materially
adversely affect the ability of the Company to perform its
obligations under this Agreement and the Notes.
3.08 ERISA Compliance.
(a) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan;
(b) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series for 1992) with respect to
each Plan, copies of which have been filed with the Internal
Revenue Service, is complete and accurate in all material respects
and fairly presents the funding status of such Plan, and since the
date of such Schedule B there has been no material adverse change
in such funding status;
(c) Neither the Company nor any ERISA Affiliate has
incurred or reasonably expects to incur any withdrawal liability
under ERISA to any Multiemployer Plan; and
(d) Neither the Company nor any ERISA Affiliate
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 a
participant after such participant's termination of employment,
except (i) as may be required by the Consolidated Budget
Reconciliation Act of 1985, as amended ("COBRA") and the
regulations thereunder, (ii) at the expense of the participant or
the beneficiary of the participant, (iii) welfare benefit plans
maintained by WUI for retiree participants presently numbering up
to 313, and (iv) severance pay plans covering employees of the
Company and its Subsidiaries; and the Company and each of its ERISA
Affiliates that maintains a welfare benefit plan within the meaning
of Section 3(1) of ERISA has complied in all material respects with
the notice and continuation coverage requirements of COBRA and the
regulations thereunder;
to the extent that (a), (b), (c) or (d), as the case may be, would
have a material adverse effect on the business, operations,
properties or financial or other condition of the Company and its
Subsidiaries taken as a whole or could have a material adverse
effect on the ability of the Company to perform its obligations
under this Agreement and the Notes.
3.09 Use of Proceeds; Margin Regulations. The proceeds of
the Advances shall be used for general corporate purposes,
including without limitation possible liquidity support for the
<PAGE> Exhibit 10(a)
-------------
( 44 of 152)
suance of commercial paper by the Company. No portion of the
Advances will be used, directly or indirectly, in any manner which
might cause such Advances or the application of the proceeds
thereof to violate Regulation U, Regulation T or Regulation X of
the Federal Reserve Board as in effect on the date of such
Advances. Following the application of the proceeds of each
Advance, not more than twenty-five percent (25%) of the value of
the assets (either of the Company only or of the Company and its
Subsidiaries on a consolidated basis) subject to the provisions of
Sections 6.01 or 6.02 will be Margin Stock.
3.10 Title to Properties. Except as set forth in the second
and third sentences of this Section 3.10, each of the Company and
its Subsidiaries has good record and marketable title in fee simple
to, valid leasehold interests or other valid rights in all their
respective properties, except for such defects in title as could
not, individually or in the aggregate, have a materially adverse
effect on the business, operations, property, prospects or
financial condition of the Company and its Subsidiaries taken as a
whole or the ability of the Company to perform its obligations
under this Agreement or the Notes. Significant portions of the
fiber optic systems which comprise a material part of the
communications system of the Company and its Subsidiaries are
constructed in or on real property (primarily devoted to railways,
powerlines, pipelines and highways) to which the Company and
certain of its Subsidiaries have been granted various rights
pursuant to easement, license or other agreements (collectively,
the "Right of Way Agreements"), which Right of Way Agreements
generally do not contain warranties of title in favor of the
Company or any of its Subsidiaries. Neither the Company nor any
such Subsidiary has performed any investigation into the title of
the grantors of such rights in and to such real property or into
the sufficiency of such title to enable such grantors to grant such
rights to the Company and such Subsidiaries under the Right of Way
Agreements. The properties of the Company and its Subsidiaries are
free and clear of all security interests, Liens or rights of
others, except as permitted by Section 6.01.
3.11 Taxes. The Company and its Subsidiaries have filed all
material Federal and other tax returns and reports required to be
filed and have paid all material Federal and other taxes,
assessments, fees and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and
payable except those for which adequate reserves have been
provided.
3.12 Financial Condition. (a) The audited consolidated
balance sheet of the Company and its Subsidiaries as at December
31, 1993 and the related consolidated income statement and
<PAGE> Exhibit 10(a)
-------------
( 45 of 152)
statement of cash flows for the fiscal year ended on such date,
accompanied by the opinion thereon of Price Waterhouse, independent
accountants:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except
as otherwise noted therein;
(ii) are complete and accurate in all material
respects and a fair presentation of the financial condition of the
Company and its Subsidiaries as of the date thereof and of the
results of operations for the period covered thereby; and
(iii) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date thereof (including, without limitation,
liabilities for taxes and material commitments) to the extent
required under GAAP to be disclosed therein.
(b) Since December 31, 1993, there has been no material
adverse change in the business, operations, properties or condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole from those set forth in the financial
statements referred to in Section 3.12(a).
3.13 Environmental Matters. Except as set forth in
Schedule IV, to the best knowledge of the Company after reasonable
inquiry:
(a) the operations of the Company and each of its
Subsidiaries comply in all material respects with all applicable
Hazardous Materials Laws;
(b) none of the operations of the Company or any of its
Subsidiaries is the subject of federal or state investigation
evaluating whether any remedial action, involving expenditures, is
needed to respond to a release of any Hazardous Materials into the
environment; and
(c) neither the Company nor any of its Subsidiaries has
any material contingent liability in connection with any release of
any Hazardous Materials into the environment,
except, in each case referred to above, to the extent that any
noncompliance, remedial action or liability would not have a
material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
<PAGE> Exhibit 10(a)
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( 46 of 152)
3.14 Investment Company Act. The Company is not an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940,
as amended.
3.15 Communications Act. Neither any Bank nor either of the
Agents nor any Affiliate of any thereof will become, solely by
reason of entering into this Agreement or the consummation of any
of the transactions contemplated thereby, subject to regulation
under (i) the Communications Act of 1934, as amended, or the rules,
regulations and policies of the Federal Communications Commission
thereunder (except for direct or derivative obligations to furnish
nonburdensome information routinely required of similarly situated
Persons) or (ii) any other present Federal or state laws relating
to communications services or the use or operation of apparatus for
the transmission of energy, communications or signals by radio.
3.16 Senior Indebtedness. All of the obligations of the
Company under this Agreement and the Notes shall constitute "Senior
Indebtedness" as defined in the Indenture and such obligations
shall rank prior in right of payment, to the extent and in the
manner set forth in the Indenture, to the payment of the Company's
obligations under, or under any securities or evidences of
indebtedness issued pursuant to the terms and provisions of, the
Indenture. The obligations of the Company under this Agreement and
the Notes shall rank senior to or at least pari passu with all
other unsecured indebtedness of the Company now or hereafter
existing.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions to Initial Advances. The obligation of each
Bank to make the initial Advance hereunder is subject to the
condition that the Operating Agent shall have received on or before
the first borrowing date all of the following, in form and
substance satisfactory to the Operating Agent, its counsel and the
Banks and in sufficient copies for each Bank:
(a) Credit Agreement and the Notes. This Agreement,
the Pro Rata Notes and the Competitive Bid Notes executed and
delivered by a Responsible Officer of the Company;
(b) Corporate Documents of the Company. Certified
copies of the Certificate of Incorporation of the Company together
with a good standing certificate from the Secretary of State of
Delaware, each dated a recent date prior to the Effective Date;
<PAGE> Exhibit 10(a)
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( 47 of 152)
(c) By-Laws of the Company. Copies of the By-Laws of
the Company certified as of the Effective Date as true and complete
by its Secretary or an Assistant Secretary;
(d) Board Resolutions of the Company. Certified copies
of the resolutions of the Board of Directors of the Company
approving and authorizing the execution, delivery and performance
by the Company of this Agreement and the Notes and authorizing the
borrowing of Advances, certified as of the Effective Date by the
Secretary or an Assistant Secretary of the Company;
(e) Incumbency Certificate for the Company. A
certificate of the Secretary or Assistant Secretary of the Company
certifying as of the Effective Date the names and true signatures
of the officers of the Company authorized to execute, deliver and
perform this Agreement and any Notes and to deliver notices and
requests and other documents to be delivered on behalf of the
Company hereunder;
(f) Legal Opinion for the Company. An opinion of John
R. Worthington, Esq., General Counsel to the Company, dated the
Effective Date and substantially in the form of Exhibit F-1, and an
opinion of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel,
special New York counsel to the Company, dated the Effective Date
and substantially in the form of Exhibit F-2, but in each case also
covering such other matters incident to the transactions
contemplated by this Agreement as the Operating Agent shall
reasonably require;
(g) Payment of Fees and Expenses. Evidence that the
fees payable to the Agents and to the Syndication Agent, as
provided in Section 2.10, and any costs, expenses and allocated
cost payable under Section 9.04(a) and billed at least fifteen (15)
days prior to the Effective Date, have been paid on the Effective
Date;
(h) Certificate. A certificate signed by a Responsible
Officer, dated as of the Effective Date, stating that:
(i) the representations and warranties of the
Company contained in Article III are true and correct on and
as of such date, as though made on and as of such date; and
(ii) no event has occurred and is continuing, or
would result from the initial Borrowing, which would
constitute a Default or Event of Default;
(i) Financial Statements. Copies of all financial
statements referred to in Section 3.12(a);
<PAGE> Exhibit 10(a)
-------------
( 48 of 152)
(j) MCI Telecom Certificate. A certificate signed by a
Responsible Officer setting forth the aggregate book value of the
assets of MCI Telecom as of December 31, 1993;
(k) Existing Agreement. Evidence that (i) the
principal of and accrued and unpaid interest on all "Advances" (as
defined in the Existing Agreement), if any, outstanding under the
Existing Agreement, and all accrued but unpaid facility and
commitment fees under the Existing Agreement, have been paid in
full and (ii) the commitments of the financial institutions party
to the Existing Agreement have been terminated, in each case, on or
before the Effective Date; and
(l) Other Documents. Such other approvals, opinions or
documents as the Operating Agent or the Majority Banks may
reasonably request.
4.02 Additional Conditions Precedent. The obligation of each
Bank to make the initial Advance hereunder is subject to the
further conditions precedent that:
(a) Margin Regulations. No portion of the Advances
will be used, directly or indirectly, in any manner which might
cause such Advances or the application of the proceeds thereof to
violate Regulation U, Regulation T or Regulation X of the Federal
Reserve Board as in effect on the date of such Advances. The
Company shall have delivered to the Operating Agent an executed
Form U-1.
(b) No Material Adverse Change. Since December 31,
1993, no adverse change which the Majority Banks deem material has
occurred in the financial condition of the Company and its
Subsidiaries taken as a whole or which the Majority Banks deem to
have a material adverse effect on the ability of the Company to
perform its obligations with respect to this Agreement.
(c) Litigation. There shall be no claim, action, suit,
investigation, litigation or proceeding (including, without
limitation, shareholder or derivative litigation) pending or
existing in any court or before any arbitrator or governmental
instrumentality which relates to this Agreement which has any
reasonable likelihood of having a material adverse effect on the
business, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole or on the ability of
the Company to perform its obligations with respect to this
Agreement.
<PAGE> Exhibit 10(a)
-------------
( 49 of 152)
4.03 Conditions to All Advances. The obligation of each Bank
to make any Advance to be made by it hereunder (including its
initial Advance and any Competitive Bid Advance that such Bank
shall have agreed to make pursuant to Section 2.02) is subject to
the satisfaction of the following conditions precedent on the
relevant borrowing date:
(a) Borrowing Notice. In the case of each Pro Rata
Borrowing, the Operating Agent shall have received, or be deemed to
have received, a notice of borrowing, as required by Section
2.04(a).
(b) Continuation of Representations and Warranties.
The representations and warranties of the Company contained in
Article III (except, (i) in the case of any Borrowing other than
the initial Pro Rata Borrowing, the representations and warranties
of the Company contained in Section 3.12(b) and (ii) in the case of
a Refunding Borrowing other than any by which a Competitive Bid
Borrowing shall be refinanced by a Pro Rata Borrowing, the
representations and warranties of the Company contained in Sections
3.06, 3.07, 3.08, 3.13 and 3.15) shall be true and correct on and
as of such borrowing date with the same effect as if made on and as
of such borrowing date.
(c) No Existing Default. No Default or Event of
Default shall have occurred and be continuing hereunder on the
borrowing date with respect to such Advance or after giving effect
to the Advance to be made on such borrowing date, except in the
case of a Refunding Borrowing (other than any by which a
Competitive Bid Borrowing is refinanced by a Pro Rata Borrowing)
provided that the Commitments have not been terminated by the
Majority Banks pursuant to Article VII.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company hereunder as of the date
of each such borrowing that the conditions in this Section 4.03
have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Bank shall have any Commitment hereunder, or any Advance or other
amount payable hereunder shall remain unpaid, unless the Majority
Banks waive compliance in writing:
5.01 Financial Statements. The Company shall deliver to the
Operating Agent, with copies for each Bank in form and substance
reasonably satisfactory to them:
<PAGE> Exhibit 10(a)
-------------
( 50 of 152)
(a) as soon as available, but not later than one
hundred (100) days after the end of each fiscal year of the
Company, a copy of the audited consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such
year and the related consolidated income statement and statement of
cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, all in
reasonable detail and accompanied by the report of Price Waterhouse
or another nationally recognized independent public accounting
firm, which report shall state that such consolidated financial
statements fairly present the financial position and results of
operations of the Company and its consolidated Subsidiaries in
respect of such fiscal year in conformity with GAAP applied on a
basis consistent with prior years, except as otherwise noted
therein.
(b) as soon as available, but in any event not later
than fifty-five (55) days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, a copy of the
unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such quarter and the
related consolidated income statement and statement of cash flows
for such quarter and (in the case of the second and third quarters)
for the period from the beginning of the current fiscal year to the
end of such quarter, setting forth in each case in comparative form
the figures for the corresponding periods of the previous year, all
in reasonable detail and certified on behalf of the Company by an
appropriate Responsible Officer as being complete and correct in
all material respects and fairly presenting, in accordance with
GAAP except as otherwise noted therein, the consolidated financial
position and results of operations of the Company and its
consolidated Subsidiaries in respect of such quarter, subject to
changes resulting from normal year-end audit adjustments.
5.02 Certificates; Other Information. The Company shall
furnish to the Operating Agent, with copies for each Bank:
(a) concurrently with the delivery of the financial
statements referred to in Sections 5.01(a) and 5.01(b), a
certificate of a Responsible Officer on behalf of the Company
(i) stating that, to the best of such officer's knowledge, no
Default or Event of Default has occurred and is continuing except
as specified in such certificate, and (ii) setting forth in
reasonable detail the calculations required to establish whether
the Company was in compliance with Section 6.07; provided, however,
that such certificate shall not be required to include such
calculations if, as of the date of the applicable financial
statements, the ratio referred to in Section 6.07 is less than or
equal to 0.60 to 1.00;
<PAGE> Exhibit 10(a)
-------------
( 51 of 152)
(b) promptly after the same are sent, copies of all
financial statements and reports which the Company sends to its
stockholders, and promptly after the same are filed, copies of all
financial statements and all publicly available regular, periodic
or special reports which the Company shall make to, or file with,
the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(c) promptly and in any event within five (5) Business
Days after receipt thereof by the Company or any ERISA Affiliate
from a Multiemployer Plan, a copy of each notice received by the
Company or any ERISA Affiliate asserting a withdrawal liability
pursuant to Section 4202 of ERISA with respect to the Company or
any ERISA Affiliate; and
(d) promptly, such additional financial and other
information as the Operating Agent or the Majority Banks may from
time to time reasonably request.
5.03 Preservation of Corporate Existence, etc. The Company
shall, and shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its
respective state of incorporation;
(b) preserve and maintain in full force and effect all
rights, privileges, qualifications, rights of way, licenses and
franchises necessary or desirable in the normal conduct of its
business; and
(c) comply with all of its Contractual Obligations,
except, (i) as permitted by Section 6.03, (ii) in the case of
Subsidiaries in each case referred to in paragraphs (a), (b) and
(c) above, and in the case of the Company in each case referred to
in paragraphs (b) and (c) above, to the extent that failure to do
so would not, in the aggregate, have a material adverse effect on
the business, operations or financial or other condition of the
Company and its Subsidiaries taken as a whole or on the ability of
the Company to pay and perform its obligations under this Agreement
and the Notes and (iii) the Company may liquidate or dissolve
Subsidiaries which have no significant assets and do not function
or produce any goods or services.
5.04 Maintenance of Property. The Company shall, and shall
cause each of its Subsidiaries to, maintain and preserve all of its
property which is used or useful in its business in good working
order and condition, ordinary wear and tear excepted, and make all
necessary repairs thereto and renewals and replacements thereof,
<PAGE> Exhibit 10(a)
-------------
( 52 of 152)
except where the failure to do so would not, in the aggregate, have
a material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries
taken as a whole or on the ability of the Company to pay and
perform its obligations under this Agreement and the Notes.
5.05 Insurance. The Company shall, and shall cause each of
its Subsidiaries to, maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to
its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other
Persons, including without limitation, workers' compensation
insurance, public liability insurance, property and casualty
insurance and (to the extent required by law) flood insurance on
its improved real estate, except where the failure to do so would
not, in the aggregate, have a material adverse effect on the
business, operations, property or financial or other condition of
the Company and its Subsidiaries taken as a whole or on the ability
of the Company to pay and perform its obligations under this
Agreement and the Notes.
5.06 Payment of Obligations. The Company shall, and shall
cause each of its Subsidiaries to, pay and discharge, as the same
shall become due and payable, all their respective obligations and
liabilities, including without limitation all tax liabilities,
assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such
Subsidiary, except where the failure to do so would not, in the
aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole or on the ability of the
Company to pay and perform its obligations under this Agreement and
the Notes.
5.07 Compliance with Laws. The Company shall, and shall
cause each of its Subsidiaries to, comply in all material respects
with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business, except such
(a) as may be contested in good faith or as to which a
bona fide dispute may exist, or
<PAGE> Exhibit 10(a)
-------------
( 53 of 152)
(b) as to which such failure to comply would not have
a material adverse effect on the business, operations, properties,
assets or conditions (financial or otherwise) of the Company and
its Subsidiaries taken as a whole or on the ability of the Company
to pay and perform its obligations under this Agreement and the
Notes.
5.08 Inspection of Property and Books and Records. The
Company shall, and shall cause each of its Subsidiaries to,
maintain adequate books of record and account in which entries that
are full, true and correct in all material respects in conformity
with GAAP consistently applied (with such exceptions as may be
noted in the financial statements provided to the Operating Agent
pursuant to Section 5.01 or in notices provided to the Operating
Agent pursuant to Section 5.10(h)) shall be made of all financial
transactions, assets and business of the Company and such
Subsidiaries. After the occurrence of any Default or Event of
Default, the Company shall, and shall cause each of its
Subsidiaries to, permit representatives of the Operating Agent or
any Bank to visit and inspect any of their respective properties,
to examine their respective corporate, financial and operating
records and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their
respective directors, officers and independent public accountants,
all at the expense of the Company, at any time (during normal
business hours) and as often as may be desired, without advance
notice to the Company.
5.09 Hazardous Materials. The Company shall, and shall cause
each of its Subsidiaries to, conduct its operations and keep and
maintain its property in compliance with all Hazardous Materials
Laws, except where the failure to do so would not, in the
aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole or on the ability of the
Company to pay and perform its obligations under this Agreement and
the Notes.
5.10 Notices. The Company shall promptly give notice to the
Operating Agent:
(a) of the occurrence of any Default or Event of
Default of which any officer responsible for any part of the
business of the Company and its Subsidiaries involved in such
Default or Event of Default shall have knowledge, specifying the
nature of such Default or Event of Default, the period of existence
thereof and the action that the Company has taken or proposes to
take with respect thereto;
<PAGE> Exhibit 10(a)
-------------
( 54 of 152)
(b) of any (i) default or event of default under any
material Contractual Obligation of the Company or any of its
Subsidiaries or (ii) dispute, litigation, investigation, proceeding
or suspension which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority if such
default or event of default or an adverse determination of such
dispute, litigation, investigation, proceeding or suspension could
materially adversely affect the ability of the Company to pay and
perform its obligations under this Agreement and the Notes;
(c) of the commencement of, or any material development
in, any litigation or proceeding (excluding any proceeding with
respect to a proposed or non-final tax assessment) affecting the
Company or any Subsidiary (i) which, if adversely determined, could
have a material adverse effect on the business, operations or
financial or other condition of the Company and its Subsidiaries
taken as a whole or the ability of the Company to pay and perform
its obligations under any Loan Document; or (ii) in which the
relief sought is an injunction or other stay of the performance of
any Loan Document;
(d) upon, but in no event later than fifteen (15) days
after, becoming aware of (i) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted,
completed or threatened against the Company or any Subsidiary or
any of their properties pursuant to any applicable Hazardous
Materials Laws, (ii) all claims made or threatened by any third
party against the Company or any Subsidiary with respect to or
because of its or their property relating to damage,
responsibility, contribution, cost recovery compensation, loss or
injury resulting from any Hazardous Materials (the matters set
forth in clauses (i) and (ii) above are hereinafter referred to as
"Hazardous Materials Claims"), and (iii) any environmental or
similar condition on any real property adjoining or in the vicinity
of the property of the Company or any Subsidiary that could
reasonably be anticipated to cause such property or any part
thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any
Hazardous Materials Laws; provided, that no notice of any such
action, claim or condition shall be required under this paragraph
(d) unless it could have a material adverse effect on the business,
operations, properties or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or on the ability of
the Company to pay and perform its obligations under this Agreement
and the Notes;
(e) of any other litigation or proceeding affecting the
Company or any of its Subsidiaries which the Company would be
required to report to the Securities and Exchange Commission
<PAGE> Exhibit 10(a)
-------------
( 55 of 152)
pursuant to the Securities Exchange Act of 1934, within four (4)
days after reporting the same to the Securities and Exchange
Commission;
(f) of any ERISA Event affecting the Company or any
ERISA Affiliate promptly after the occurrence thereof (but in no
event more than ten (10) days after the Company shall obtain
knowledge of such ERISA Event) together with (i) a certificate of
the Company setting forth the details of such ERISA Event and the
action which the Company or such ERISA Affiliate proposes to take
with respect thereto, (ii) a copy of any notice with respect to
such ERISA Event that may be required to be filed with the PBGC, or
(iii) any notice delivered by the PBGC to the Company or any ERISA
Affiliate with respect to such ERISA Event;
(g) of any change in Pricing Level promptly after the
occurrence thereof (but in no event more than five (5) days after
such change in Pricing Level); and
(h) of any change in GAAP that would materially affect
the calculation of the financial covenant in Section 6.07.
Each notice pursuant to this Section shall be accompanied by a
statement by a Responsible Officer of the Company setting forth
details of the occurrence referred to therein and describing the
action which the Company proposes to take with respect thereto.
5.11 Consultation after GAAP Changes. The Company shall,
promptly after delivering any notice pursuant to Section 5.10(h),
consult in good faith with the Operating Agent and the Banks as to
the appropriateness of amending any of the covenants contained in
Article VI to reflect the changes in GAAP described in such notice;
provided, that neither the Company nor the Operating Agent nor any
Bank shall be obligated to agree to any such amendment.
5.12 Maintenance of Telecommunications Business. The
Company shall maintain the business of providing telecommuni-
cations services as a major business of the Company and its
Subsidiaries taken as a whole and shall cause MCI Telecom to
maintain such business as its principal business.
ARTICLE VI
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any
Bank shall have any Commitment hereunder, or any Advance or other
amount payable hereunder shall remain unpaid, unless the Majority
Banks waive compliance in writing:
<PAGE> Exhibit 10(a)
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( 56 of 152)
6.01 Limitation on Liens. The Company shall not, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien
upon or with respect to any of the capital stock of MCI Telecom,
nor shall it permit MCI Telecom to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with
respect to any part of its property or assets, whether now owned or
hereafter acquired, except for:
(a) any Lien existing on the property of MCI Telecom on
the date of this Agreement and set forth in Schedule V securing
Indebtedness outstanding on such date (or the refinancing or
refunding of such Indebtedness);
(b) Liens for taxes, assessments or other governmental
charges which are not delinquent or remain payable without material
penalty, or the validity of which is contested in good faith by
appropriate proceedings (to the extent that it would be appropriate
to contest the levy or imposition of such tax as an alternative to
payment) upon stay of execution or the enforcement thereof and for
which adequate reserves or other appropriate provision has been
made in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not material or, if material,
are not delinquent or remain payable without penalty or which are
being contested in good faith and by appropriate proceedings;
(d) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount, and do not
materially detract from the overall value to MCI Telecom of all
property and assets of MCI Telecom subject to such Liens or
interfere with the ordinary conduct of the business of MCI Telecom;
(g) Liens on assets which shall be acquired by MCI
Telecom either directly or through the acquisition of the owner of
such assets after the date of this Agreement, if such Liens shall
have existed at the time the assets or the owner of such assets
were acquired and shall not have been created in anticipation
thereof by or with the agreement of MCI Telecom;
<PAGE> Exhibit 10(a)
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( 57 of 152)
(h) Liens on assets (other than current assets) which
shall be acquired by MCI Telecom after the date of this Agreement
if such Liens shall have been created solely for the purpose of
securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost of the acquisition of such assets or
shall otherwise be created in anticipation of such acquisition by
or with the agreement of MCI Telecom; and
(i) Liens not otherwise permitted hereunder securing
obligations of MCI Telecom in an aggregate amount not to exceed an
amount equal to 10% of the total assets of MCI Telecom at any time,
provided that, at the time any such Lien is created or incurred,
the aggregate book value of the assets subject to such Lien shall
not exceed an amount equal to 125% of the amount of the obligation
secured by such assets.
6.02 Sale or Lease of Assets. The Company shall not,
directly or indirectly, sell, convey, transfer or otherwise dispose
of (whether in one or a series of transactions) any of the shares
of capital stock of MCI Telecom, nor shall the Company permit MCI
Telecom to, directly or indirectly, sell, lease, convey, transfer
or otherwise dispose of (whether in one or a series of
transactions) all or a material part of the assets, business or
property of MCI Telecom (including without limitation, accounts and
notes receivable, with or without recourse), whether now owned or
hereafter acquired, or enter into any agreement to do any of the
foregoing, except:
(a) dispositions by MCI Telecom of obsolete or worn-out
property or real property no longer used or useful in its business;
(b) sales to local exchange carriers, with or without
recourse, of customer receivables in the ordinary course of
business;
(c) dispositions of assets acquired, either directly or
through the acquisition of the owner of such assets, after the date
of this Agreement; provided, that each such disposition shall be
for fair and adequate consideration; and
(d) dispositions (including, without limitation, sales
pursuant to sale-leaseback transactions) by MCI Telecom not
otherwise permitted hereunder which are made for fair market value;
provided that the book value of all Disposed Assets (as hereinafter
defined) disposed of pursuant to this Section 6.02(d) after the
date of this Agreement does not exceed 20% of the greater of (i)
the book value of the assets of MCI Telecom as of December 31, 1993
and (ii) the book value of the assets of MCI Telecom as of the date
of the most recent financial statements furnished to the Banks
pursuant to Section 5.01.
<PAGE> Exhibit 10(a)
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( 58 of 152)
For purposes of Section 6.02(d), the term "Disposed Assets"
shall mean all assets of MCI Telecom other than cash and cash
equivalents, equity investments, franchises, licenses, permits,
patents, patent applications, copyrights, trademarks, trade names,
goodwill, experimental or organizational expense, and other like
intangibles (but excluding rights of way treated as assets).
6.03 Consolidations and Mergers. The Company shall not, nor
shall it permit MCI Telecom to, merge, consolidate or combine
directly or indirectly with or into any Person except:
(a) MCI Telecom may merge, consolidate or combine with
or into, or transfer assets to, any other Person, if immediately
after giving effect thereto, (i) no Default or Event of Default
would exist, and (ii) MCI Telecom shall be the surviving
corporation in such merger, consolidation or combination or, if
not, the sale of all of the assets, business or property of MCI
Telecom to such other Person would not violate Section 6.02; and
(b) subject to clause (m) of Article VII, the Company
may merge, consolidate or combine with another entity if (i) the
Company shall be the corporation surviving the merger, or the
corporation into which the Company shall be merged or formed by any
such consolidation shall assume the Company's obligations hereunder
and under the Notes in an agreement or instrument satisfactory in
form and substance to the Majority Banks and (ii) if immediately
after giving effect thereto, no Default or Event of Default would
exist.
6.04 Transactions with Affiliates. The Company shall not,
nor shall it permit any of its Subsidiaries to, enter into any
transaction with any Affiliate of the Company or of any such
Subsidiary that would be material in relation to the Company and
its Subsidiaries taken as a whole except pursuant to the reasonable
requirements of the business of the Company or such Subsidiary and
upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Company or such
Subsidiary.
6.05 Compliance with ERISA. The Company shall not directly or
indirectly and will not permit any ERISA Affiliate to directly or
indirectly (i) terminate any Plan subject to Title IV of ERISA so
as to result in any material (in the opinion of the Majority Banks)
liability of the Company or any ERISA Affiliate to the PBGC, (ii)
permit to exist any ERISA Event, or any other event or condition,
which would present the risk of a material (in the opinion of the
Majority Banks) liability of the Company or any ERISA Affiliate, or
(iii) make a complete or partial withdrawal (within the meaning of
ERISA Section 4201 from any Multiemployer Plan so as to result in
<PAGE> Exhibit 10(a)
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( 59 of 152)
any material (in the opinion of the Majority Banks) liability of
the Company or any ERISA Affiliate, (iv) 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 or as a result of an acquisition of a
corporation for appropriate consideration) which could result in
any material(in the opinion of the Majority Banks) liability of the
Company or any ERISA Affiliate, or (v) permit the present value of
all nonforfeitable accrued benefits under each Plan (using the
actuarial assumptions required under Accounting Principle 87 of the
Financial Accounting Standards Board upon termination of a Plan)
materially (in the opinion of the Majority Banks) to exceed the
fair market value of Plan assets allocable to such benefits, all
determined (in the case of (iv) and (v)) as of the most recent
valuation date for each such Plan and, as to materiality (in the
case of (i), (ii), (iii), (iv) and (v)), determined in relation to
the Company and its Subsidiaries taken as a whole.
6.06 Use of Proceeds.
(a) Upon receipt thereof, the Company shall use the
proceeds of all Advances solely for the general corporate purposes
of the Company consistent with the representations and warranties
and covenants contained in this Agreement (including liquidity
support for commercial paper issuance).
(b) The Company shall not use any portion of the
Advances, directly or indirectly: (a) in a manner which would cause
such Advances or the application of the proceeds thereof, to
violate Regulation U, Regulation T or Regulation X of the Federal
Reserve Board; (b) to buy or carry Margin Stock unless (i) the
value of all Margin Stock owned by the Company at any time shall
not exceed twenty-five percent (25%) of the aggregate value of the
assets subject to the restrictions in Sections 6.01 and 6.02 and
(ii) prior to the date of the related Advance the Company shall
have executed and delivered a duly completed purpose statement
(Form U-1) as required under Regulation U; or (c) to make an
uninvited acquisition of another corporation or business
enterprise.
(c) The Company shall not, directly or indirectly, use
any portion of the Advances (i) knowingly to purchase Ineligible
Securities from BA Securities during any period in which BA
Securities makes a market in such Ineligible Securities, (ii)
knowingly to purchase during the underwriting or placement period
Ineligible Securities being underwritten or privately placed by BA
Securities, or (iii) to make payments of principal or interest on
Ineligible Securities underwritten or privately placed by BA
Securities and issued by or for the benefit of the Company or any
Affiliate of the Company. As used in this Section, "Ineligible
Securities" means securities which may not be underwritten or dealt
<PAGE> Exhibit 10(a)
-------------
( 60 of 152)
in by member banks of the Federal Reserve System under Section 16
of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
6.07 Ratio of Total Liabilities to Total Capitalization. The
Company shall not permit at any time during the period from and
including the Effective Date to but excluding the Termination Date,
Total Liabilities, to exceed 0.68 times the sum of the Company's
Total Capital and Total Liabilities.
6.08 MCI Telecom Liabilities. The Company shall not permit
MCI Telecom to incur, create, assume or suffer to exist any MCI
Telecom Liabilities other than:
(a) Indebtedness of MCI Telecom to the Company or to
any other Subsidiary; and
(b) other MCI Telecom Liabilities in an aggregate
principal amount not to exceed an amount equal to 10% of the total
assets of MCI Telecom at any time.
6.09 No Restriction on Dividends of MCI Telecom. The Company
shall not cause or permit MCI Telecom to enter into any agreement
of any nature whatsoever that would restrict the ability of such
Person to declare or make any dividend payment or other
distribution of assets, properties or cash, rights, obligations or
securities on account of any shares of any class of capital stock
of such Person, or purchase, redeem or otherwise acquire for value
any shares of capital stock of such Person or any warrants, rights
or options to acquire such shares.
ARTICLE VII
EVENTS OF DEFAULT
Upon the occurrence and during the continuation of any of the
following events:
(a) Non-Payment of Principal. The Company shall fail
to pay when due any portion of the principal of any Advance and
such default shall continue unremedied for a period of three (3)
Business Days; provided, that if the Operating Agent or any Bank
shall give notice to the Company of such default prior to the end
of such period, such default shall become an Event of Default under
this paragraph (a) if it shall continue unremedied beyond the day
which shall be the earlier of (i) one (1) Business Day after such
notice shall be given to the Company or (ii) the last day of such
period; or
<PAGE> Exhibit 10(a)
-------------
( 61 of 152)
(b) Non-Payment of Interest and Facility Fee. The
Company shall fail to pay when due any portion of any interest on
any Advance or any facility fee payable hereunder and such default
shall continue unremedied for a period of five (5) Business Days;
provided, that if the Operating Agent or any Bank shall give notice
to the Company of such default prior to the end of such period,
such default shall become an Event of Default under this paragraph
(b) if it shall continue unremedied beyond the day which shall be
the earlier of (i) one (1) Business Day after such notice shall be
given to the Company or (ii) the last day of such period; or
(c) Non-Payment of Other Amounts. The Company shall
fail to pay when due any portion of any other amount payable under
this Agreement and not specified in paragraph (a) or (b) above and
such default shall continue unremedied for fifteen (15) days after
notice thereof shall have been given to the Company by the
Operating Agent or any Bank; or
(d) Representation or Warranty. Any representation or
warranty made or deemed made by the Company herein or which is
contained in any certificate, document or financial or other
statement furnished by the Company at any time under this Agreement
shall prove to have been incorrect in any material respect on or as
of the date made or deemed made; provided, that if the Company
shall be capable of taking action that would result in such
representation or warranty becoming correct in all material
respects at a later date such failure of the representation or
warranty to be correct shall not be an Event of Default under this
paragraph (c) until such failure shall continue for a period of
fifteen (15) days after notice thereof shall have been given to the
Company by the Operating Agent or any Bank; or
(e) Certain Article VI Defaults. The Company shall
fail to perform or observe any term, covenant or agreement
contained in Section 6.01 (other than by reason of an attachment or
involuntary lien), 6.02, 6.03, 6.06 or 6.08; or the Company shall
fail to perform or observe any term, covenant or agreement
contained in Section 6.01 (if by reason of an attachment or
involuntary Lien) or 6.07 and such default shall continue
unremedied for a period of fifteen (15) days; or
(f) Other Covenant Defaults. The Company shall fail to
perform or observe any other term, covenant or agreement contained
in Article V or Article VI, and such default shall continue
unremedied for a period of thirty (30) days; provided, that the
failure to perform or observe Section 5.12 shall not be an Event of
Default until such failure shall continue unremedied for a period
of thirty (30) days after notice thereof shall have been given to
the Company by the Majority Banks; or
<PAGE> Exhibit 10(a)
-------------
( 62 of 152)
(g) Other Defaults. The Company shall fail to perform
or observe any other term, covenant or agreement contained in this
Agreement, and such default shall continue unremedied for a period
of fifteen (15) days after notice thereof shall have been given to
the Company by the Operating Agent or any Bank; or
(h) Cross-Default. The Company or any of its
Subsidiaries shall (i) fail to make any payment in respect of any
Indebtedness or Contingent Obligation (other than Indebtedness
hereunder or under any Notes) having an aggregate principal amount
outstanding of more than Twenty-Five Million Dollars ($25,000,000)
or the equivalent in another currency or currencies when due
(whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise); (ii) default in the observance or
performance of any other condition or covenant or any other event
shall occur or any condition shall exist under any agreement or
instrument relating to any Indebtedness or Contingent Obligation
(other than Indebtedness hereunder or under any Notes) having an
aggregate principal amount outstanding of more than Fifty Million
Dollars ($50,000,000) or the equivalent in another currency or
currencies, if the effect of the event or condition referred to in
this subclause (ii) shall be to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of
such Contingent Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, after
any required giving of notice or lapse of time or both, such
Indebtedness to be declared to be due and payable prior to its
stated maturity or such Contingent Obligation to become payable; or
(iii) default in the observance or performance of any other
condition or covenant or any other event shall occur or any
condition shall exist under any agreement or instrument relating to
any Indebtedness or Contingent Obligation (other than Indebtedness
hereunder or under any Notes) having an aggregate principal amount
outstanding of more than Twenty-Five Million Dollars ($25,000,000)
or the equivalent in another currency or currencies, if the effect
of the event or condition referred to in this subclause (iii) shall
be to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity or such Contingent Obligation to
become payable; or
(i) Bankruptcy or Insolvency. The Company or any of
its Subsidiaries shall (i) become insolvent or generally fail to
pay, or admit in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise, (ii) commence any proceeding or case
or file any petition or answer under any liquidation or
reorganization with creditors or any other relief under any
bankruptcy, reorganization, arrangement, insolvency, or other
proceeding or case, whether Federal or State, relating to the
relief of debtors, (iii) acquiesce in the appointment of a
<PAGE> Exhibit 10(a)
-------------
( 63 of 152)
receiver, trustee, custodian or liquidator for itself or a
substantial portion of its property, assets or business or effect
a plan or other arrangement with its creditors, (iv) admit the
material allegations of a petition filed against it in any
bankruptcy, reorganization, arrangement, insolvency or other
proceeding or case, whether Federal or State, relating to the
relief of debtors, or (v) take action to effectuate any of the
foregoing; provided, however, that, for purposes of clause (i)
above, the insolvency of any Subsidiary (other than MCI Telecom)
(an "Insolvent Subsidiary") shall not be deemed to be an Event of
Default hereunder if, but for the existence of Indebtedness owing
by such Insolvent Subsidiary to the Company or any other
Subsidiary, such Insolvent Subsidiary would not be insolvent; or
(j) Involuntary Proceedings. Any involuntary
proceeding or case or any involuntary petition shall be commenced
or filed against the Company or any Subsidiary under any
bankruptcy, insolvency or similar law or seeking the dissolution,
liquidation or reorganization of the Company or any Subsidiary or
the appointment of a receiver, trustee, custodian or liquidator for
the Company or any Subsidiary or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied
against a substantial part of the Company's or any Subsidiary's
assets and any such proceedings or petition shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty
(60) days after commencement, filing or levy; or
(k) ERISA. (i) any ERISA Event or a failure to make a
required installment or other payment (within the meaning of
Section 412(n)(1) of the Code) with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given
to the Company by the Operating Agent or any Bank, (A) such ERISA
Event or failure to make a required payment (if correctable) shall
not have been corrected and (B) the then Unfunded Benefit
Liabilities of such Plan exceed Twenty-Five Million Dollars
($25,000,000) (or in the case of an ERISA Event involving the
withdrawal of a "substantial employer" (as defined in Section
4001(a)(2) of ERISA), the withdrawing employer's proportionate
share of such excess shall exceed such amount); or (ii) the Company
or any ERISA Affiliate as employer under a Multiemployer Plan shall
have made a complete or partial withdrawal from such Multiemployer
Plan and the Plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred
a withdrawal liability in an amount exceeding Twenty-Five Million
Dollars ($25,000,000) unless within thirty (30) days after such
notification either (a) such liability shall be paid, (b) the
Company shall have deposited with the Operating Agent an amount
sufficient (with earnings thereon) to pay such liability in the
installments required by such Multiemployer Plan when due, or (c)
<PAGE> Exhibit 10(a)
-------------
( 64 of 152)
following a request for review of such notice of withdrawal
liability, the amount demanded in such notice shall be reduced to
an amount less than Twenty-Five Million Dollars ($25,000,000); or
(l) Monetary Judgments. One or more final judgments or
decrees shall be entered by a court or courts of competent
jurisdiction against the Company or any of its Subsidiaries
involving in the aggregate a liability (not paid or fully covered
by insurance) of Twenty-Five Million Dollars ($25,000,000), or the
equivalent in another currency or currencies, or more, and the same
shall not have been discharged, vacated, stayed or bonded pending
appeal within thirty (30) days from the entry thereof; or
(m) Change in Control. (i) Any "person" or "group" of
persons shall acquire "beneficial ownership" of more than 30% of
the shares of capital stock of the Company having the power to vote
for the election of directors, or (ii) during any period of 12
consecutive months, commencing before or after the date of this
Agreement and ending after the date of this Agreement, individuals
who on the first day of such period were directors of the Company
(together with any replacement or additional directors who shall
have been nominated or elected by a majority of directors then in
office) shall cease to constitute a majority of the board of
directors of the Company;
then, and in any such event,
(A) the Operating Agent shall at the request of, or may with
the consent of, the Majority Banks declare the Commitments
terminated, whereupon the Commitments shall terminate; and in
addition,
(B) the Operating Agent shall at the request of, and may with
the consent of, the Majority Banks declare the unpaid principal
amount of all outstanding Advances, all interest incurred and
unpaid thereon and all other amounts payable hereunder and under
the Notes to be immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company;
provided, that upon the occurrence of any event specified in clause
(i) or (j) above (in the case of such clause (j) upon the
expiration of the sixty (60) day period mentioned therein), the
Commitments shall immediately terminate and the unpaid principal
amount of all outstanding Advances and all interest and other
amounts as aforesaid shall immediately become due and payable
without further act of the Operating Agent or any Bank.
<PAGE> Exhibit 10(a)
-------------
( 65 of 152)
ARTICLE VIII
THE AGENTS AND THE SYNDICATION AGENT
8.01 Appointment of the Agents; Syndication Agent to Have No
Role. Each Bank hereby irrevocably (subject to the provisions of
Section 8.09) appoints, designates and authorizes each Agent to
take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement,
together with such powers as shall be reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere
in this Agreement, the Agents shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against either
Agent. The Syndication Agent shall have no duties or
responsibilities whatsoever under this Agreement, nor shall it have
any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the
Syndication Agent.
8.02 Delegation of Duties of the Agents. Each Agent may
execute any of its respective duties under this Agreement by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to
such duties. Neither of the Agents shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact that it
selects with reasonable care.
8.03 Liability of the Agents and the Syndication Agent.
Neither of the Agents nor the Syndication Agent nor any of their
respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action
taken or omitted to be taken by any of them under or in connection
with this Agreement (except for its own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks
for any recitals, statements, representations or warranties made by
the Company or any officer thereof contained in this Agreement or
in any certificate, report, statement or other document referred to
or provided for in, or received by such Agent or the Syndication
Agent under or in connection with, this Agreement or the validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any Note or for any failure of the Company to perform
its obligations hereunder or thereunder. Neither of the Agents nor
the Syndication Agent shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any
<PAGE> Exhibit 10(a)
-------------
( 66 of 152)
of the agreements contained in, or conditions of, this Agreement or
any Note, or to inspect the properties, books or records of the
Company or any of its Subsidiaries.
8.04 Reliance by the Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation,
in-house counsel of such Agent or counsel to the Company),
independent accountants and other experts selected by such Agent.
Each Agent may deem and treat the holder of any Advance as the
owner thereof for all purposes unless an Assignment Notice and
Acceptance with respect thereto shall have been filed with the
Operating Agent. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Majority Banks as
it shall deem appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to
take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this
Agreement in accordance with a request or consent of the Majority
Banks pursuant to Article IX, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the
Banks and all future holders of the Advances.
8.05 Notice of Default. Neither of the Agents shall be
deemed to have knowledge or notice of the occurrence of any Default
or Event of Default (except that the Operating Agent shall be
deemed to have knowledge of any Event of Default occurring by
reason of a failure by the Company to make a payment to or through
the Operating Agent under this Agreement or any Note), unless such
Agent shall have received notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In
the event that the Operating Agent shall receive such a notice, the
Operating Agent shall give notice thereof to the Banks. The
Operating Agent shall take such action with respect to such Default
or Event of Default as shall be requested by the Majority Banks in
accordance with Article VII; provided, that unless and until the
Operating Agent shall have received such a request, the Operating
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests
of the Banks.
<PAGE> Exhibit 10(a)
-------------
( 67 of 152)
8.06 Credit Decision. Each Bank expressly acknowledges that
neither of the Agents nor the Syndication Agent nor any of their
respective Affiliates nor any officer, director, employee, agent or
attorney-in-fact of any of them have made any representations or
warranties to it and that no act by either of the Agents or the
Syndication Agent hereafter taken, including any review of the
affairs of the Company, shall be deemed to constitute any
representation or warranty by such Agent or the Syndication Agent
to any Bank. Each Bank represents to the Agents and the
Syndication Agent that it has, independently and without reliance
upon the Agents or the Syndication Agent or any other Bank, and
based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Company and made its own decision to make
its Advances and to enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon
either of the Agents or the Syndication Agent or any other Bank,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigations as it shall deem
necessary to inform itself as to the business, operations,
prospects, assets,properties, financial or other condition and
creditworthiness of the Company. Except for notices, reports and
other documents expressly required to be furnished to the Banks by
either of the Agents hereunder, neither of the Agents nor the
Syndication Agent shall have any duty or responsibility to provide
any Bank with any credit or other information concerning the
business, operations, prospects, properties, assets or financial
condition or otherwise or creditworthiness of the Company which may
come into the possession of either of the Agents or the Syndication
Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.07 Indemnification. The Banks agree to indemnify each
Agent and the Syndication Agent in its capacity as such (to the
extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), ratably according
to their respective Commitment Percentages (or, if the Commitments
shall have been terminated, in full, but Advances shall remain
outstanding, ratably according to the then aggregate unpaid amount
of outstanding Advances made by them), from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at
any time following the payment of the Advances) be imposed on,
incurred by or asserted against such Agent or the Syndication
Agent, as the case may be, in any way relating to or arising out of
this Agreement, or any documents contemplated by or referred to
<PAGE> Exhibit 10(a)
-------------
( 68 of 152)
herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in
connection with any of the foregoing; provided, that no Bank shall
be liable for the payment to such Agent or to the Syndication Agent
of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful
misconduct of such Agent or of the Syndication Agent as the case
may be. Without limitation of the foregoing, each Bank agrees to
reimburse each Agent and the Syndication Agent (to the extent not
reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so) promptly upon demand for its
Commitment Percentage share of any out-of-pocket expenses
(including reasonable attorneys' fees and the allocated cost of
staff counsel) incurred by such Agent or the Syndication Agent, as
the case may be, in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under,
this Agreement or any Note. The agreements in this Section 8.07
shall survive the termination of the Commitments and the payment of
the Advances and all other amounts payable under this Agreement.
8.08 Bank of America in its Individual or Separate Capacity.
Bank of America and its Affiliates may make loans to, issue letters
of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of business with the
Company as though Bank of America were not acting as Competitive
Bid Agent and Operating Agent hereunder. With respect to the
Advances made or renewed by it, Bank of America shall have the same
rights and powers under this Agreement as any Bank and may exercise
the same as though it were not acting as Competitive Bid Agent and
Operating Agent, and the terms "Bank" and "Banks" shall include
Bank of America in its individual capacity.
8.09 Successor Agents. Each Agent may, and at the request of
the Majority Banks shall, resign as an Agent upon thirty (30) days'
advance notice to the Banks, whereupon the Majority Banks shall,
after consultation with the Company, appoint from among the Banks
a successor agent for the Banks. If no successor Agent shall have
been so appointed by the Majority Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, having combined
capital, surplus and undivided profits of not less than Two Hundred
Million Dollars ($200,000,000) and having its principal office or
a Lending Office in the United States of America. Upon such
successor agent succeeding to the rights, powers and duties of the
resigning Agent, the term "Agent" or "Competitive Bid Agent" or
"Operating Agent" or (where applicable to its role as an Agent)
<PAGE> Exhibit 10(a)
-------------
( 69 of 152)
"Bank of America", as the case may be, shall mean such successor
agent effective upon its appointment, and the former Agent's
rights, powers and duties as an Agent shall be terminated, without
any other or further act or deed on the part of such former Agent
or any of the parties to this Agreement or any holders of the
Advances. After any retiring Agent's resignation hereunder as an
Agent, the provisions of this Section 8.09 shall inure to its
benefit as to any actions taken or omitted to be taken by it while
it was an Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
9.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement and no consent with respect to any
departure by the Company therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority
Banks and the Company and such waiver shall be effective only in
the specific instance and for the specific purpose for which given;
provided, that no such waiver, amendment, or consent shall, unless
in writing and signed by all the Banks do any of the following:
(a) increase the Commitment of any Bank or subject any
Bank to any additional obligations;
(b) postpone or extend the Termination Date or any
other scheduled maturity date for any payment of principal,
interest, fees or other amounts due hereunder or under any Note;
(c) reduce the principal of, or the rate of interest on
any Advance or of any fees or other amounts payable hereunder or
under any Note;
(d) change the Commitment Percentages or the definition
of Majority Banks or the percentage of Banks required to take any
action under any Loan Document; or
(e) amend this Section 9.01;
and provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by an Agent in addition to the
Majority Banks, affect the rights or duties of such Agent under
this Agreement.
9.02 Notices. All notices, requests and other communications
provided for hereunder shall be in writing (including telegraphic,
telex, telecopier or cable communication) and mailed, telegraphed,
telexed or delivered to the Company and the Agents as follows:
<PAGE> Exhibit 10(a)
-------------
( 70 of 152)
The Company: MCI Communications Corporation
1801 Pennsylvania Avenue N.W.
Washington, D.C. 20006
Attention: Tom Quinn, Assistant Treasurer
Telephone: (202) 887-2858
Telecopier: (202) 887-2846
with copy to: MCI Communications Corporation
1801 Pennsylvania Avenue N.W.
Washington, D.C. 20006
Attention: General Counsel
Telephone: (202) 887-2016
Telecopier: (202) 887-2047
The Banks: The addresses set forth opposite
their respective names in Schedule I.
The Operating
Agent: Bank of America National Trust
and Savings Association,
as Operating Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Dietmar Schiel, VP, Global Agency
Telephone: (415) 953-8501
Telecopier: (415) 622-4894
Telex: 3726050 BAGASFO
The Competitive
Bid Agent: Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Dietmar Schiel, VP, Global Agency
Telephone: (415) 953-8501
Telecopier: (415) 622-4894
Telex: 3726050 BAGASFO
or, as to each party at such other address as shall be designated
by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed,
telexed, cabled or sent by telecopier and confirmed by telephone,
be effective four (4) Business Days after deposit in the mails,
when delivered to the telegraph company, confirmed by telex
answerback, delivered to the cable company, transmitted by
telecopier and confirmed by telephone respectively, except that
notices pursuant to Article II or VII shall not be effective until
received by the Operating Agent or Competitive Bid Agent, as the
case may be.
<PAGE> Exhibit 10(a)
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( 71 of 152)
9.03 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of either of the Agents or
any Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided
by law.
9.04 Costs and Expenses. The Company agrees:
(a) to pay or reimburse the Agents and the Syndication
Agent, within fifteen (15) days after demand, for all their
reasonable out-of-pocket costs and expenses incurred in connection
with the preparation, execution and delivery of, and any amendment,
supplement or modification to, this Agreement and any Notes and any
other documents prepared in connection herewith or therewith, and
the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel to the Agents and the Syndication
Agent (including the allocated cost of in-house counsel) with
respect thereto; provided, that any demand for payment or
reimbursement of any of the foregoing shall be accompanied by an
itemized statement or statements covering the related costs,
expenses or allocated cost; and
(b) to pay or reimburse each Bank and each Agent, within
fifteen (15) days after demand, for all their costs and expenses
incurred in connection with the enforcement or preservation of any
rights against the Company under this Agreement or any Note,
whether related to legal actions or proceedings, bankruptcy or
reorganization proceedings or other action, including, without
limitation, the fees and out-of-pocket expenses of counsel
(including the allocated cost of in-house counsel) to each Agent
and to each of the several Banks; provided, that (i) any demand for
payment or reimbursement of any of the foregoing shall be
accompanied by an itemized statement or statements covering the
related costs, expenses or allocated cost and (ii) no such costs or
expenses shall be reimbursed for any legal action in which the
existence of any Default or Event of Default shall have been
alleged if in such action it shall have been determined that no
such Default or Event of Default existed.
9.05 Indemnity. The Company agrees to pay, indemnify, and
hold each Bank, each Agent and the Syndication Agent and each of
their respective officers, directors, agents and employees (each,
an "Indemnified Person") harmless from and against, any and all
<PAGE> Exhibit 10(a)
-------------
( 72 of 152)
other liabilities, obligations, losses, damages, penalties,
judgments, costs, expenses or disbursements of any kind or nature
whatsoever (including without limitation the fees and out-of-pocket
expenses of counsel and the allocated cost of in-house counsel)
arising from any claim, action, suit or proceeding against or
investigation of such Indemnified Person with respect to the
execution, delivery, enforcement, performance and administration of
this Agreement and any other Loan Documents or otherwise related to
this Agreement or the Advances or the use of the proceeds thereof
(whether or not any Indemnified Person is a party thereto) (all the
foregoing, collectively, the "Indemnified Liabilities"); provided,
that the Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising
from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section 9.05 shall survive
termination of the Commitments and payment of the Advances and all
other amounts payable under this Agreement.
9.06 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not
(unless permitted by Section 6.03) assign or transfer any of its
rights or obligations under this Agreement without the prior
written consent of each Bank.
9.07 Assignments, Participations, etc.
(a) Any Bank (x) may, with the written consents of the
Company and the Operating Agent, which consent of the Operating
Agent shall not be unreasonably withheld, at any time assign and
delegate to one (1) or more banks or other Banks or to an Affiliate
of such assigning Bank, which Affiliate shall not itself be a bank,
provided that such Affiliate has a net worth of at least Seventy-
Five Million Dollars ($75,000,000), and (y) may, with notice to the
Operating Agent and the Company but without the consent of the
Company or either of the Agents, assign and delegate to any
Affiliate of such Bank which shall itself be a bank having a
combined capital, surplus and undivided profits of at least
Seventy-Five Million Dollars ($75,000,000) (each such bank,
assignee Bank or Affiliate, as the case may be, being an
"Assignee"), all or any part of the Advances or the Commitments or
any other rights or obligations of such Bank hereunder in a minimum
amount of Twenty Million Dollars ($20,000,000); provided, that the
Company and the Agents shall be entitled to continue to deal solely
and directly with such assigning Bank in connection with the
interests so assigned to an Assignee until (i) the Operating Agent
shall have received an Assignment Notice and Acceptance in the form
of Exhibit G duly executed by the assigning Bank, its Assignee and
the Company, (ii) the processing fees described below shall have
been paid and (iii) the assigning Bank shall have delivered to the
<PAGE> Exhibit 10(a)
-------------
( 73 of 152)
Operating Agent any Notes that shall be subject to such assignment.
From and after the date (an "Assignment Effective Date") on which
the Operating Agent shall notify the Company and the assigning Bank
that (i), (ii) and (iii) above shall have occurred and all consents
(if any) required under the preceding sentence shall have been
given: (x) the Assignee thereunder shall be deemed to be a party
hereto and, to the extent that rights and obligations hereunder
shall have been assigned to it pursuant to such Assignment Notice
and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents (including without limitation the right to
receive any facility fee payable pursuant to Section 2.10(a)); and
(y) the assigning Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment Notice and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents (and, in the
case of an Assignment Notice and Acceptance covering all or its
remaining portion of an assigning Bank's rights and obligations
under the Loan Documents, such Bank shall cease to be a party
thereto). Within ten (10) Business Days after its receipt of
notice by the Operating Agent that it has accepted an executed
Assignment Notice and Acceptance, the Company shall execute and
deliver to the Operating Agent in exchange for any surrendered
Notes, new Notes to the order of the Assignee in an amount equal to
the Commitment assumed by it pursuant to such Assignment Notice and
Acceptance (and, if any Competitive Bid Advance shall have been
assigned, any corresponding Competitive Bid Note) and, if the
assigning Bank shall have retained a portion of its Commitment
hereunder, new Notes to the order of the assigning Bank each in an
amount equal to the amount retained by it hereunder. The assigning
Bank or Assignee shall pay a processing fee to the Operating Agent
in the amount of Two Thousand Dollars ($2,000) in respect of each
assignment. The Company shall have no responsibility for the
payment of any such fee. Notwithstanding the foregoing, any Bank,
without notice to or consent of the Company or the Operating Agent
may assign, as collateral, any of its rights (including, without
limitation, rights to payments of principal and/or interest on the
Notes) under this Agreement to any Federal Reserve Bank.
(b) Any Bank may at any time sell to one (1) or more
banks or other entities (each a "Participant") participating
interests in any Advances, the Commitment of such Bank or any other
interest of such Bank hereunder; provided, that (i) such Bank's
obligations under this Agreement shall in such event remain
unchanged, (ii) such Bank shall remain solely responsible for the
performance of such obligations, (iii) the Company and the agents
shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement, (iv) the Company shall have no responsibility for the
cost of effecting or administering any such participation and (v)
no Bank shall transfer, grant or assign any participating interest
<PAGE> Exhibit 10(a)
-------------
( 74 of 152)
under which the Participant shall have rights to approve any
amendment to, or any consent or waiver with respect to this
Agreement except to the extent such amendment, consent or waiver
would (A) postpone or extend the Termination Date or the scheduled
maturity date of any Advance or the date for the payment of the
principal of or interest on any Advance hereunder in which such
Participant shall be participating, (B) reduce any amount of
principal of any Advance hereunder in which such Participant shall
be participating, (C) reduce the interest rate applicable to any
Advance hereunder in which such Participant shall be participating,
or (D) reduce any fees payable hereunder in which such Participant
shall be participating. In the case of any such participation, the
Participant shall not have any rights under this Agreement, or any
of the Notes, and all amounts payable by the Company hereunder
shall be determined as if such Bank had not sold such
participation, except that the Company agrees that (a) if amounts
outstanding under this Agreement or any of the Notes shall be due
and unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect
of its participating interest in amounts owing under this Agreement
to the same extent as if the amount of its participating interest
were owing directly to it as a lender under this Agreement, and (b)
each Participant shall be entitled to the benefits of Sections
2.15, 2.17 and 2.18 with respect to its participating interest in
the Commitments and the Advances outstanding from time to time;
provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the selling Bank
would have been entitled to receive in respect of the amount of the
participating interest sold by such selling Bank to such
Participant had no such sale occurred.
9.08 Confidentiality. Each Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the
confidentiality of all non-public information provided to it by the
Company or by the Operating Agent on the Company's behalf in
connection with this Agreement and agrees and undertakes that
neither it nor any of its Affiliates shall use any such information
for any purpose or in any manner other than in connection with this
Agreement (for purposes of this Agreement information may be
treated by any Bank as public if such information (a) was or
becomes generally available to the public or (b) was or becomes
available on a non-confidential basis from a source other than the
Company or its advisors provided that such source is not known by
such Bank to be bound by a confidentiality agreement with, or an
obligation of confidentiality to, the Company). Any Bank may
disclose such information (i) at the request of any bank regulatory
authority or in connection with an examination of such Bank by any
such authority; (ii) pursuant to subpoena or other court process,
or to the extent required in connection with any litigation between
<PAGE> Exhibit 10(a)
-------------
( 75 of 152)
such Bank and the Company provided that such disclosure is subject
to an appropriate protective order if such protective order is
available; (iii) when otherwise required to do so in accordance
with the provisions of any applicable law; (iv) at the express
direction of any other agency of any State of the United States of
America or of any other jurisdiction in which such Bank conducts
its business; (v) to such Bank's independent auditors and other
professional advisors; and (vi) to any Participant or Assignee
(each, a "Transferee") and any prospective Transferee; provided,
that (A) prior to any disclosure by a Bank pursuant to (ii), (iii),
(iv) or (v) such Bank shall, to the extent practicable and lawful,
provide advance notice to the Company of such disclosure and (B)
any such disclosure to a Transferee or prospective Transferee shall
be subject to the condition that (I) unless a Default shall have
occurred and be continuing, the Company shall give its prior
written consent (which shall not be unreasonably withheld) to
disclosures to any particular Participant or prospective
Participant (any such consent shall apply to all such disclosures),
and (II) such Transferee or prospective Transferee shall execute
and deliver to such Bank a confidentiality agreement substantially
in the form of Exhibit H and a copy of such agreement shall be sent
by such Bank to the Company prior to such disclosure (but the
sending of such copy to the Company shall not alter the effect of
any provision of Section 9.07(b)).
9.09 Sharing; Set-off.
(a) If any Bank (a "benefited Bank") shall, at any time
after the occurrence and during the continuance of an Event of
Default, receive any payment of all or part of the principal of any
of its Advances, or of any interest thereon, or of any fee payable
hereunder, whether voluntarily or involuntarily, by set-off,
pursuant to events, cases or proceedings of the nature referred to
in paragraph (i) or (j) of Article VII, or otherwise, in a greater
proportion than that of any payment to any other Bank in respect of
the principal of such other Bank's Advances, or interest thereon,
or of any corresponding fee payable to such Bank hereunder, such
benefited Bank shall purchase for cash from each such other Bank
such portion of such other Bank's Advance or Advances as shall be
necessary to cause such benefited Bank to share the excess payment
ratably with each of the Banks; provided, that if all or any
portion of such excess payment or benefits is thereafter recovered
by or on behalf of the Company from such benefited Bank, such
purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
The Company agrees that each Bank so purchasing a portion of
another Bank's Advance may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of
such portion.
<PAGE> Exhibit 10(a)
-------------
( 76 of 152)
(b) In addition to any rights and remedies of the Banks
provided by law, upon the occurrence and during the continuance of
any Event of Default each Bank shall have the right, without prior
notice to the Company, any such notice being expressly waived by
the Company to the fullest extent permitted by applicable 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 Bank to or for the credit or
the account of the Company against any and all obligations of the
Company now or hereafter existing under this Agreement and the
Notes and Advances held by such Bank irrespective of whether or not
the Operating Agent or such Bank shall have made demand under this
Agreement or any Note and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Company and the
Operating Agent after any such set-off and application made by such
Bank; provided, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of
each Bank under this Section 9.09 are in addition to the other
rights and remedies (including without limitation, other rights of
set-off) which such Bank may have under applicable law.
9.10 Notification of Addresses, Lending Offices, etc. Each
Bank shall notify the Operating Agent in writing of any changes in
the address to which notices to such Bank should be directed, of
addresses of any of its Lending Offices, of payment instructions in
respect of all payments to be made to it hereunder and of such
other administrative information as the Operating Agent shall
reasonably request.
9.11 Delivery of Documents and Notices. Promptly after
receiving from the Company any documents or notices delivered to
the Operating Agent hereunder, the Operating Agent will deliver a
copy thereof to the Banks.
9.12 Counterparts; Effectiveness. This Agreement may be
executed by one or more of the parties to this Agreement on any
number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
This Agreement shall become effective when the Operating Agent
shall have received counterparts hereof signed by all of the
parties hereto (or, in the case of any Bank from which a
counterpart executed by it shall not have been received, the
Operating Agent shall have received telegraphic, telex or other
written confirmation from such Bank of execution of a counterpart
hereof by such Bank). A set of the copies of this Agreement signed
by all the parties shall be lodged with the Company and the
Operating Agent.
9.13 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required
<PAGE> Exhibit 10(a)
-------------
( 77 of 152)
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
9.14 Jurisdiction. The Company hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any Note, or for
recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient forum and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
postage prepaid, to the Company at its address, and to the
attention of the officer, set forth in Section 9.02 or at such
other address of which the Operating Agent shall have been notified
pursuant thereto. The Person effecting such service shall cause a
courtesy copy thereof to be delivered by hand to the receptionist
at such address as soon thereafter as shall be reasonably
practicable; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.
9.15 Waiver of Trial by Jury. THE COMPANY, THE AGENTS AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING RELATED IN ANY WAY
TO THIS AGREEMENT OR ANY OF THE NOTES IN WHICH THE COMPANY, EITHER
OF THE AGENTS OR ANY OF THE BANKS SHALL BE ADVERSE PARTIES.
9.16 Governing Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
<PAGE> Exhibit 10(a)
-------------
( 78 of 152)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
MCI COMMUNICATIONS CORPORATION
By: /s/ Jonelle St. John
Title: Vice President
and Treasurer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Competitive Bid Agent
By: /s/ Dietmar Schiel
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Operating Agent
By: /s/ Dietmar Schiel
Title: Vice President
BA SECURITIES, INC.,
as Syndication Agent
By: /s/ John A. Finan
Title: Vice President
<PAGE> Exhibit 10(a)
-------------
( 79 of 152)
Commitments THE BANKS:
$ 150,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: /s/ Doug Bontemps
Title: Vice President
$ 115,000,000 THE BANK OF NOVA SCOTIA
By: /s/ James R. Trimble
Title: Senior Relationship Manager
$ 115,000,000 CITIBANK, N.A.
By: /s/ Natica von Althann
Title: Managing Director
Attorney-in-Fact
$ 115,000,000 MELLON BANK, N.A.
By: /s/ John R. Fell, III
Title: Vice President
$ 115,000,000 NATIONSBANK OF VIRGINIA, N.A.
By: /s/ Michael R. Williams
Title: Senior Vice President
<PAGE> Exhibit 10(a)
-------------
( 80 of 152)
$ 95,000,000 THE BANK OF NEW YORK
By: /s/ Victoria Wohlsen
Title: Vice President
$ 95,000,000 CHEMICAL BANK
By: /s/ Marissa J. Harney
Title: Vice President
$ 95,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Ronald L. Coleman
Title: Assistant Vice President
$ 95,000,000 THE FUJI BANK, LIMITED,
New York Branch
By: /s/ Takashi Nagao
Title: Vice President and Manager
$ 95,000,000 THE SUMITOMO BANK, LIMITED,
New York Branch
By: /s/ Yoshinori Kawamura
Title: Joint General Manager
<PAGE> Exhibit 10(a)
-------------
( 81 of 152)
$ 70,000,000 THE CHASE MANHATTAN BANK, N.A.
By: /s/ Robert T. Smith
Title: Vice President
$ 70,000,000 FIRST INTERSTATE BANK OF CALIFORNIA
By: /s/ Peter G. Olson
Title: Senior Vice President
By: /s/ Wendy V.C. Purcell
Title: Assistant Vice President
$ 70,000,000 PNC BANK, NATIONAL ASSOCIATION
By: /s/ Marlene S. Dooner
Title: Vice President
$ 70,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ David L. Gaines
Title: Senior Vice President
$ 40,000,000 THE BANK OF TOKYO, LTD.,
New York Agency
By: /s/ Yukio Yanaka
Title: Senior Vice President
<PAGE> Exhibit 10(a)
-------------
( 82 of 152)
$ 40,000,000 CONTINENTAL BANK
By: /s/ Peggy L. Hayner
Title: Vice President
$ 40,000,000 THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ Andreas Panteli
Title: Vice President
$ 40,000,000 DEUTSCHE BANK AG, New York
and/or Cayman Islands Branch
By: /s/ Solveigh K. Marcks
Title: Director
By: /s/ Bina R. Dabbah
Title: Vice President
$ 40,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, New York Branch
By: /s/ Takeshi Kawano
Title: Senior Vice President
$ 40,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, New York Branch
By: /s/ Hiroshi Sasaki
Title: Deputy General Manager
<PAGE> Exhibit 10(a)
-------------
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$ 40,000,000 THE MITSUBISHI BANK, LIMITED
By: /s/ Frank H. Madden
Title: Joint General Manager
$ 40,000,000 THE SANWA BANK, LTD.
By: /s/ Dominic J. Sorresso
Title: Vice President
$ 40,000,000 TORONTO DOMINION (NEW YORK), INC.
By: /s/ Carol A. Clause
Title: Vice President
$ 25,000,000 BANQUE NATIONALE DE PARIS
By: /s/ Phil Truesdale
Title: Vice President
By: /s/ Barry S. Feigenbaum
Title: Senior Vice President
<PAGE> Exhibit 10(a)
-------------
( 84 of 152)
$ 25,000,000 BANQUE PARIBAS
By: /s/ Deepa Pasumarty
Title: Vice President
By: /s/ Jamie N. Manson
Title: Assistant Vice President
$ 25,000,000 BARCLAYS BANK PLC
By: /s/ Andrew M. Wynn
Title: Director
$ 25,000,000 CIBC, INC.
By: /s/ Leslie L. Rogers
Title: Vice President
$ 25,000,000 CREDIT SUISSE
By: /s/ Dawn E. Rubinstein
Title: Associate
By: /s/ Eileen O'Connell Fox
Title: Member of Senior Management
<PAGE> Exhibit 10(a)
-------------
( 85 of 152)
$ 25,000,000 THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ Lauren Johnston
Title: Corporate Banking Executive
$ 25,000,000 SIGNET BANK/VIRGINIA
By: /s/ Vincent P. Griffin
Title: Assistant Vice President
$ 25,000,000 THE TOYO TRUST AND BANKING COMPANY,
LIMITED
By: /s/ Hiroyuki Fukuro
Title: Vice President
$ 25,000,000 TRUST COMPANY BANK
By: /s/ Hollis Linginfelter
Title: Vice President
By: /s/ Raymond B. King
Title: Vice President
<PAGE> Exhibit 10(a)
-------------
( 86 of 152)
$ 25,000,000 UNION BANK OF SWITZERLAND
By: /s/ Peter B. Yearley
Title: Vice President
By: Daniel H. Perron
Title: Vice President
$ 25,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York and
Cayman Islands Branches
By: /s/ Lucie L. Guernsey
Title: Vice President
By: /s/ Kheil A. McIntyre
Title: Vice President
<PAGE> Exhibit 10(a)
-------------
( 87 of 152)
CONFORMED COPY
=================================================================
=================================================================
$2,000,000,000
REVOLVING CREDIT AGREEMENT
dated as of July 8, 1994
Among
MCI COMMUNICATIONS CORPORATION
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Competitive Bid Agent
and Operating Agent
and
THE SEVERAL FINANCIAL INSTITUTIONS
PARTIES HERETO
and
BA SECURITIES, INC.,
as Syndication Agent
==================================================================
<PAGE> Exhibit 10(a)
-------------
( 88 of 152)
<TABLE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
<S> <C>
1.01 Defined Terms 1
1.02 Other Definitional Provisions 15
ARTICLE II
THE CREDIT FACILITIES
2.01 Commitments to Make Pro Rata Advances 16
(a) Commitments 16
(b) Types of Pro Rata Advances 16
2.02 Competitive Bid Advances 16
(a) Competitive Bid Advances 16
(b) Competitive Bid Borrowing Requests 17
(c) Offers of Competitive Bid Advances 17
(d) Responses by the Company to Offers 18
(e) Notice of Cancellation 19
(f) Notice of Acceptance 19
(g) Determining the Competitive Bid Eurodollar Rate 20
(h) Inability to Determine Competitive Bid Eurodollar
Rate 21
(i) Borrowing and Reborrowing 21
(j) Repayments 21
(k) Interest 21
(l) Insufficient Competitive Bid Advances 22
2.03 Evidence of Debt 22
2.04 Procedure for Pro Rata Borrowings 23
2.05 Refunding Borrowings 24
2.06 Optional Termination or Reduction of Commitments 24
2.07 Optional Prepayments of Pro Rata Advances 24
2.08 Repayment of Advances 25
2.09 Termination Date 25
2.10 Fees 25
(a) Facility Fee 25
(b) Additional Fees 26
2.11 Interest 26
(a) Interest on Pro Rata Advances 26
(b) Interest on Competitive Bid Advances 26
(c) Interest on Overdue Amounts 26
(d) Additional Interest on Eurodollar Rate Advances 26
(e) Payment of Interest on Pro Rata Advances 27
(f) Maximum Interest Rate 27
2.12 Computation of Interest, Fees and Other Amounts 27
2.13 Inability to Determine Interest Rate for Pro Rata
Advances 28
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Section Page
2.14 Pro Rata Treatment and Payments 29
(a) Payments by the Company 29
(b) Payments by the Banks to the Operating Agent 30
2.15 Taxes 31
2.16 Illegality 36
2.17 Requirements of Law 37
2.18 Funding Losses 39
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Corporate Existence and Power 40
3.02 Corporate Authorization; No Contravention 40
3.03 Governmental Authorization 41
3.04 Binding Effect 41
3.05 No Legal Bar 41
3.06 Litigation 41
3.07 No Default 42
3.08 ERISA Compliance 42
3.09 Use of Proceeds; Margin Regulations 43
3.10 Title to Properties 43
3.11 Taxes 44
3.12 Financial Condition 44
3.13 Environmental Matters 44
3.14 Investment Company Act 45
3.15 Communications Act 45
3.16 Senior Indebtedness 45
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions to Initial Advances 45
(a) Credit Agreement and the Notes 46
(b) Corporate Documents of the Company 46
(c) By-Laws of the Company 46
(d) Board Resolutions of the Company 46
(e) Incumbency Certificate for the Company 46
(f) Legal Opinion for the Company 46
(g) Payment of Fees and Expenses 46
(h) Certificate 46
(i) Financial Statements 47
(j) MCI Telecom Certificate 47
(k) Existing Agreement 47
(l) Other Documents 47
4.02 Additional Conditions Precedent 47
(a) Margin Regulations 47
(b) No Material Adverse Change 47
(c) Litigation 47
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Section Page
4.03 Conditions to All Advances 48
(a) Borrowing Notice 48
(b) Continuation of Representations and Warranties 48
(c) No Existing Default 48
ARTICLE V
AFFIRMATIVE COVENANTS
5.01 Financial Statements 49
5.02 Certificates; Other Information 49
5.03 Preservation of Corporate Existence, etc 50
5.04 Maintenance of Property 50
5.05 Insurance 51
5.06 Payment of Obligations 51
5.07 Compliance with Laws 51
5.08 Inspection of Property and Books and Records 52
5.09 Hazardous Materials 52
5.10 Notices 52
5.11 Consultation after GAAP Changes 54
5.12 Maintenance of Telecommunications Business 54
ARTICLE VI
NEGATIVE COVENANTS
6.01 Limitation on Liens 54
6.02 Sale or Lease of Assets 56
6.03 Consolidations and Mergers 57
6.04 Transactions with Affiliates 57
6.05 Compliance with ERISA 57
6.06 Use of Proceeds 58
6.07 Ratio of Total Liabilities to Total Capitalization 58
6.08 MCI Telecom Liabilities 59
6.09 No Restriction on Dividends of MCI Telecom 59
ARTICLE VII
EVENTS OF DEFAULT
(a) Non-Payment of Principal 59
(b) Non-Payment of Interest and Facility Fee 59
(c) Non-Payment of Other Amounts 60
(d) Representation or Warranty 60
(e) Certain Article VI Defaults 60
(f) Other Covenant Defaults 60
(g) Other Defaults 60
(h) Cross-Default 60
(i) Bankruptcy or Insolvency 61
(j) Involuntary Proceedings 62
(k) ERISA 62
(l) Monetary Judgments 62
(m) Change in Control 62
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Section Page
ARTICLE VIII
THE AGENTS AND THE SYNDICATION AGENT
8.01 Appointment of the Agents; Syndication Agent to Have
No Role 63
8.02 Delegation of Duties of the Agents 64
8.03 Liability of the Agents and the Syndication Agent 64
8.04 Reliance by the Agents 64
8.05 Notice of Default 65
8.06 Credit Decision 65
8.07 Indemnification 66
8.08 Bank of America in its Individual or Separate Capacity 66
8.09 Successor Agents 67
ARTICLE IX
MISCELLANEOUS
9.01 Amendments and Waivers 67
9.02 Notices 68
9.03 No Waiver; Cumulative Remedies 69
9.04 Costs and Expenses 69
9.05 Indemnity 70
9.06 Successors and Assigns 70
9.07 Assignments, Participations, etc. 70
9.08 Confidentiality 72
9.09 Sharing; Set-off 73
9.10 Notification of Addresses, Lending Offices, etc. 74
9.11 Delivery of Documents and Notices 74
9.12 Counterparts; Effectiveness 74
9.13 Severability 75
9.14 Jurisdiction 75
9.15 Waiver of Trial by Jury 75
9.16 Governing Law 76
</TABLE>
<PAGE> Exhibit 10(a)
-------------
( 92 of 152)
SCHEDULES AND EXHIBITS
SCHEDULES:
SCHEDULE I Lending Offices, Addresses for
Notices, Etc. (9.10)
SCHEDULE II Pricing Grid
SCHEDULE III Pending Litigation (3.06)
SCHEDULE IV Environmental Matters (3.13)
SCHEDULE V Existing Liens (6.01(a))
EXHIBITS:
EXHIBIT A Form of Pro Rata Note
EXHIBIT B Form of Competitive Bid Note
EXHIBIT C-1 Form of Pro Rata Borrowing Request
EXHIBIT C-2 Form of Competitive Bid Borrowing Request
EXHIBIT D Form of Competitive Bid Advance Offer
EXHIBIT E Form of Competitive Bid Advance Confirmation
EXHIBIT F-1 Form of Opinion of the General Counsel
to the Company
EXHIBIT F-2 Form of Opinion of Special New York Counsel
to the Company
EXHIBIT G Form of Assignment Notice and Acceptance
EXHIBIT H Form of Confidentiality Agreement
<PAGE> Exhibit 10(a)
-------------
( 93 of 152)
DRAFT 7/1/94
EXHIBIT A
FORM OF PRO RATA NOTE
$ July 8, 1994
FOR VALUE RECEIVED, the undersigned, MCI COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"), hereby
promises to pay to the order of (the "Bank") the
principal sum of Dollars ($ ) or, if less,
the aggregate unpaid principal amount of all Pro Rata Advances made
by the Bank to the Company pursuant to the Revolving Credit
Agreement, dated as of July 8, 1994 (such Credit Agreement, as it
may be amended, restated, supplemented or otherwise modified from
time to time, being hereinafter called the "Agreement"), among the
Company, the Bank, the other banks parties thereto, Bank of America
National Trust and Savings Association, as Competitive Bid Agent
and as Operating Agent, and BA Securities, Inc., as Syndication
Agent, on the dates and in the amounts provided in the Agreement.
The Company further promises to pay interest on the unpaid
principal amount of the Pro Rata Advances evidenced hereby from
time to time at the rates, on the dates, and otherwise as provided
in the Agreement.
The Bank is authorized to endorse the amount and the date
on which each Pro Rata Advance is made, the maturity date therefor
and each payment of principal with respect thereto on the schedules
annexed hereto and made a part hereof, or on continuations thereof
which shall be attached hereto and made a part hereof; provided,
that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation
of the Company under the Agreement and this Note.
This Note is one of the Pro Rata Notes referred to in, and
is entitled to the benefits of, the Agreement, which 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.
<PAGE> Exhibit 10(a)
-------------
( 94 of 152)
Terms defined in the Agreement are used herein with their
defined meanings unless otherwise defined herein. This Note shall
be governed by, and construed and interpreted in accordance with,
the laws of the State of New York applicable to contracts made and
to be performed entirely within such State.
MCI COMMUNICATIONS CORPORATION
By:
Title:
<PAGE> Exhibit 10(a)
-------------
( 95 of 152)
Schedule A to Note
REFERENCE RATE ADVANCES AND REPAYMENT OF REFERENCE RATE
ADVANCES
(2) (3) (4)
Amount Maturity Amount of
of Date of Reference (5)
(1) Reference Reference Rate Notation
Date Rate Advance Rate Advance Advance Repaid Made By
<PAGE> Exhibit 10(a)
-------------
( 96 of 152)
Schedule B to Note
EURODOLLAR RATE ADVANCES AND REPAYMENT OF EURODOLLAR
RATE ADVANCES
(2) (3) (4)
Amount Maturity Amount of
of Date of Eurodollar (5)
(1) Eurodollar Eurodollar Rate Notation
Date Rate Advance Rate Advance Advance Repaid Made By
<PAGE> Exhibit 10(a)
-------------
( 97 of 152)
DRAFT 7/1/94
EXHIBIT B
FORM OF COMPETITIVE BID NOTE
$2,000,000,000 July 8, 1994
FOR VALUE RECEIVED, the undersigned, MCI COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company"), hereby
promises to pay to the order of (the "Bank")
the principal sum of each Competitive Bid Advance made by the Bank
to the Company pursuant to the Revolving Credit Agreement, dated as
of July 8, 1994 (such Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time,
being hereinafter called the "Agreement"), among the Company, the
Bank, the other banks parties thereto, Bank of America National
Trust and Savings Association, as Competitive Bid Agent and as
Operating Agent, and BA Securities, Inc., as Syndication Agent, on
the last day of the Interest Period for such Competitive Bid
Advance. The Company further promises to pay interest on the
unpaid principal amount of such Competitive Bid Advance from time
to time at the rates, on the dates, and otherwise as provided in
the Agreement.
The Bank is authorized to endorse the amount and the date
on which each Competitive Bid Advance is made, the maturity date
therefor and each payment of principal with respect thereto on the
schedules annexed hereto and made a part hereof, or on
continuations thereof which shall be attached hereto and made a
part hereof; provided, that any failure to endorse such information
on such schedule or continuation thereof shall not in any manner
affect any obligation of the Company under the Agreement and this
Note.
This Note is one of the Competitive Bid Notes referred to
in, and is entitled to the benefits of, the Agreement, which
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.
<PAGE> Exhibit 10(a)
-------------
( 98 of 152)
Terms defined in the Agreement are used herein with their
defined meanings unless otherwise defined herein. This Note shall
be governed by, and construed and interpreted in accordance with,
the laws of the State of New York applicable to contracts made and
to be performed entirely within such State.
MCI COMMUNICATIONS CORPORATION
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(99 of 152)
Schedule A to Note
COMPETITIVE BID ADVANCES AND
REPAYMENT OF COMPETITIVE BID ADVANCES
(LIBOR BID)
(3)
(2) Maturity (4) (5)
(1) Amount Date Amount of Notation
Date of Advance of Advance Advance Repaid Made By
<PAGE> Exhibit 10(a)
-------------
(100 of 152)
Schedule B to Note
COMPETITIVE BID ADVANCES AND
REPAYMENT OF COMPETITIVE BID ADVANCES
(ABSOLUTE BID)
(3)
(2) Maturity (4) (5)
(1) Amount Date Amount of Notation
Date of Advance of Advance Advance Repaid Made By
<PAGE> Exhibit 10(a)
-------------
(101 of 152)
DRAFT 7/1/94
EXHIBIT C-1
FORM OF PRO RATA BORROWING REQUEST
, 19
Bank of America National Trust
and Savings Association,
as Operating Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Global Agency
Dear Sirs:
Reference is made to the Revolving Credit Agreement,
dated as of July 8, 1994, among MCI Communications Corporation, the
Banks named therein, Bank of America National Trust and Savings
Association, as Competitive Bid Agent and as Operating Agent, and
BA Securities, Inc., as Syndication Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are
used herein as therein defined.
This is a request for Pro Rata Advances pursuant to
Section [2.04] [2.02(l)] of the Credit Agreement as follows:
Aggregate Principal Amount: $
Borrowing Date:
Type of Advances:
Maturity Date:
Interest Period Duration:
(in the case of Eurodollar Rate Advances)
<PAGE> Exhibit 10(a)
-------------
(102 of 152)
Very truly yours,
MCI COMMUNICATIONS CORPORATION
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(103 of 152)
EXHIBIT C-2
FORM OF COMPETITIVE BID BORROWING REQUEST
, 19
Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Global Agency
Dear Sirs:
Reference is made to the Revolving Credit Agreement,
dated as of July 8, 1994, among MCI Communications Corporation, the
Banks named therein, Bank of America National Trust and Savings
Association, as Competitive Bid Agent and as Operating Agent, and
BA Securities, Inc., as Syndication Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are
used herein as therein defined.
This is a Competitive Bid Borrowing Request for [Absolute
Bid] [LIBOR Bid] Competitive Bid Advances pursuant to Section 2.02
of the Credit Agreement as follows:
<TABLE>
<S> <C> <C> <C>
Aggregate Principal Amount: $ $ $
Date of Advance:
Maturity Date:
Interest Period:
Interest Payment Dates:
[Other relevant information]
</TABLE>
<PAGE> Exhibit 10(a)
-------------
(104 of 152)
Very truly yours,
MCI COMMUNICATIONS CORPORATION
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(105 of 152)
DRAFT 7/1/94
EXHIBIT D
FORM OF COMPETITIVE BID ADVANCE OFFER
, 19
Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Global Agency
Dear Sirs:
Reference is made to the Revolving Credit Agreement,
dated as of July 8, 1994, among MCI Communications Corporation, the
Banks named therein, Bank of America National Trust and Savings
Association, as Competitive Bid Agent and as Operating Agent, and
BA Securities, Inc., as Syndication Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are
used herein as therein defined.
In response to the Competitive Bid Borrowing Request of
the Company dated , 19 and in accordance with Section 2.02
of the Credit Agreement, the undersigned Bank offers to make
Competitive Bid Advances thereunder in the following amounts with
the following maturity dates:
Date of Advances: , 19
Aggregate Maximum Amount: $
Maturity Date 1 Maturity Date 2 Maturity Date 3
Maximum Amount $ Maximum Amount $ Maximum Amount $
Rate* Amount $ Rate* Amount $ Rate* Amount $
Rate* Amount $ Rate* Amount $ Rate* Amount $
<PAGE> Exhibit 10(a)
-------------
(106 of 152)
Very truly yours,
[NAME OF BIDDING BANK]
By:
Name:
Title:
Telephone No.:
Telecopier No.:
* Insert "Margin" in place of "Rate" in the case of each LIBOR
Bid.
<PAGE> Exhibit 10(a)
-------------
(107 of 152)
DRAFT 7/1/94
EXHIBIT E
FORM OF COMPETITIVE BID ADVANCE CONFIRMATION
, 19
Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Global Agency
Dear Sirs:
Reference is made to the Revolving Credit Agreement, dated
as of July 8, 1994, among MCI Communications Corporation, the Banks
named therein, Bank of America National Trust and Savings
Association, as Competitive Bid Agent and as Operating Agent, and
BA Securities, Inc., as Syndication Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are
used herein as therein defined.
In accordance with Section 2.02 of the Credit Agreement,
the undersigned accepts and confirms the offers by Bank(s) to make
Competitive Bid Advances to the undersigned on , 19
[Date of Advances] under said Section 2.02 in the (respective)
amount(s) set forth on the attached list of Competitive Bid
Advances offered.
Very truly yours,
MCI COMMUNICATIONS CORPORATION
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(108 of 152)
[Company to attach Competitive Bid Advance offer list
prepared by the Competitive Bid Agent with accepted amount entered
by the Company to right of each Competitive Bid Advance offer.]
<PAGE> Exhibit 10(a)
-------------
(109 of 152)
DRAFT 7/1/94
EXHIBIT F-1
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
July 8, 1994
To the Banks and Agents party to
the below-mentioned Credit Agreement
Dear Sirs:
I am the General Counsel of MCI Communications Corporation, a
Delaware corporation (the "Company") and have acted as such, in
connection with the execution and delivery of the Revolving Credit
Agreement, dated as of July 8, 1994 (the "Credit Agreement"), among
the Company, the banks named therein (the "Banks"), Bank of America
National Trust and Savings Association, as Competitive Bid Agent
and Operating Agent for the Banks (the "Agents"), and BA
Securities, Inc., as Syndication Agent.
This opinion is provided to the Banks and the Agents as
required pursuant to Section 4.01(f) of the Credit Agreement.
Capitalized terms not otherwise defined herein have the respective
meanings set forth in the Credit Agreement.
I have examined as such counsel: executed copies of the Credit
Agreement and the Notes; certificates of public officials from the
State of Delaware; the certificate of incorporation and by-laws of
the Company as amended to date; records of proceedings of the Board
of Directors of the Company during or by which resolutions were
adopted relating to matters covered by this opinion; and
certificates of officers of the Company as to certain factual
matters. In addition, I have made such other investigations as I
have deemed necessary to enable me to express the opinions
hereinafter set forth. In such review and investigation, I have
assumed the genuineness of all signatures of persons signing the
Credit Agreement on behalf of parties
<PAGE> Exhibit 10(a)
-------------
(110 of 152)
thereto other than the Company, the authenticity of all documents
submitted to me as originals and the conformity to authentic
original documents of all documents submitted to me as certified,
conformed or photostatic copies. As to various questions of fact
pertinent to my opinion, I have relied on statements made by
officers of the Company and the recitals and representations and
warranties (other than with respect to Sections 3.01 and 3.02)
contained in the Credit Agreement.
Based upon the foregoing, and further subject to the last two
paragraphs of this letter, I hereby advise you that in my opinion:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of
the State of Delaware.
2. The Company has the corporate power and authority to own
and operate (or lease, as the case may be) its properties, to
conduct the business in which it is currently engaged and to
execute, deliver and perform, and borrow under, the Credit
Agreement and to execute, deliver and perform the Notes.
3. The Company is duly qualified as a foreign corporation and
in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that the
failure to be so qualified would not, in the aggregate, have a
material adverse effect on the business, operations, properties or
financial or other condition of the Company and its Subsidiaries,
taken as a whole and would not materially adversely affect the
ability of the Company to perform its obligations under the Credit
Agreement.
4. The Credit Agreement and the borrowings proposed to be
made thereunder and the Notes have been duly authorized by the
Company and no further corporate action is required in connection
therewith. The Credit Agreement and the Notes have each been duly
executed and delivered on behalf of the Company.
5. No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority
is required in connection with the execution, delivery or
performance by the Company or (with respect to any Governmental
Authority of the United States charged with regulating
telecommunications) enforcement against the Company of the Credit
Agreement or the Notes or the borrowings proposed to
<PAGE> Exhibit 10(a)
-------------
(111 of 152)
be made under the Credit Agreement, except such governmental
authorizations which have been duly obtained and are in full force
and effect.
6. The execution, delivery and performance of the Credit
Agreement and the borrowings proposed to be made under the Credit
Agreement and the Notes will not (i) violate any Requirement of Law
applicable to the Company or any Contractual Obligation of the
Company, or (ii) result in, or require, the creation or imposition
of any Lien on any of its properties or revenues pursuant to such
Requirement of Law or Contractual Obligation.
7. Except as set forth in Schedule III to the Credit
Agreement, no litigation, investigation or proceedings of or before
any court, arbitrator or other Governmental Authority is pending
or, to the best of my knowledge, threatened against the Company or
any of its properties or revenues (i) with respect to the Credit
Agreement or any of the borrowings proposed to be made under the
Credit Agreement or (ii) which has a reasonable possibility of
being determined adversely to the Company and if so determined
would have a material adverse effect on the business, operations,
properties or financial condition of the Company or on the ability
of the Company to perform its obligations with respect to the
Credit Agreement.
8. The Company is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
I am a member of the Bar of the State of Illinois, and I do not
express any opinion herein concerning any law other than the
federal law of the United States and the Delaware General
Corporation Law.
This letter has been furnished to you pursuant to Article IV of
the Credit Agreement for your use in connection with the Credit
Agreement, and may not be relied upon for any other purpose without
my consent.
Very truly yours,
<PAGE> Exhibit 10(a)
-------------
(112 of 152)
DRAFT 7/5/94
EXHIBIT F-2
July 8, 1994
FORM OF OPINION OF SPECIAL NEW YORK
COUNSEL TO THE COMPANY
To the Banks listed on
Schedule I annexed hereto
Dear Sirs:
We have acted as special counsel for MCI Communications
Corporation (the "Company"), a Delaware corporation, in connection
with the Revolving Credit Agreement, dated as of July 8, 1994 (the
"Agreement"), among the Company, the several financial institutions
parties thereto (the "Banks"), Bank of America National Trust and
Savings Association, as Competitive Bid Agent and Operating Agent
for the Banks (the "Agents"), and BA Securities, Inc., as
Syndication Agent (the "Syndication Agent").
We have read a copy of an execution form of the Agreement and
have made such other investigations as we have deemed necessary for
the purpose of rendering the opinion hereinafter expressed. In
such examinations, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity to the original of all copies
submitted to us as conformed or photocopies, and the authenticity
of the originals of such latter documents. As to various questions
of fact pertinent to our opinion, we have relied upon
representations, statements or certificates of officers and
representatives of the Company and others, including
representations contained in the Agreement. Capitalized terms used
herein without definition have the respective meanings assigned
thereto in the Agreement.
We have assumed that the Company has duly authorized, executed
and delivered the Agreement and the Notes and that the Banks, the
Agents and the Syndication Agent have each duly
<PAGE> Exhibit 10(a)
-------------
(113 of 152)
executed and delivered the Agreement and that the Agreement
constitutes a legal, valid, binding and enforceable obligation of
the Banks, the Agents and the Syndication Agent.
Based upon and subject to the foregoing and to the last
paragraph hereof, we are of the opinion that:
1. Each of the Agreement and the Notes is a legal, valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as enforceability may be
limited by (i) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, liquidation, moratorium or similar laws
affecting creditors' rights generally, and (ii) general principles
of equity (regardless of whether enforcement is sought by
proceedings in equity or at law).
2. No consent, approval, authorization, registration or
filing with the State of New York is required in connection with
the execution, delivery or performance by the Company of the
Agreement or the Notes or the borrowings proposed to be made under
the Agreement, other than those which have been made or obtained
and are in full force and effect.
3. The execution, delivery and performance by the Company of
the Agreement and the Notes and the borrowings proposed to be made
under the Agreement do not violate, contravene or result in a
breach of any law of the State of New York applicable to the
Company.
This opinion is being delivered to you pursuant to
Section 4.01(f) of the Agreement and neither this opinion nor any
part thereof may be delivered to or relied on by any other person
without our prior written consent.
We are qualified to practice law only in the State of New York
and we express no opinion as to the laws of any other jurisdiction,
other than the federal laws of the United States, except that we
express no opinion as to any matters arising under the
Communications Act of 1934 or any similar state or local statute
regarding communications.
Very truly yours,
Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel
<PAGE> Exhibit 10(a)
-------------
(114 of 152)
Schedule I
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
THE BANK OF NOVA SCOTIA
CITIBANK, N.A.
MELLON BANK, N.A.
NATIONSBANK OF VIRGINIA, N.A.
THE BANK OF NEW YORK
CHEMICAL BANK
THE FIRST NATIONAL BANK OF CHICAGO
THE FUJI BANK, LIMITED, New York Branch
THE SUMITOMO BANK, LIMITED, New York Branch
THE CHASE MANHATTAN BANK, N.A.
FIRST INTERSTATE BANK OF CALIFORNIA
PNC BANK, NATIONAL ASSOCIATION
WACHOVIA BANK OF GEORGIA, N.A.
THE BANK OF TOKYO, LTD., New York Agency
CONTINENTAL BANK, N.A.
THE DAI-ICHI KANGYO BANK, LTD.
DEUTSCHE BANK AG, New York and/or Cayman Islands Branch
THE INDUSTRIAL BANK OF JAPAN, LIMITED, New York Branch
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, New York Branch
THE MITSUBISHI BANK, LIMITED
THE SANWA BANK, LTD.
THE TORONTO-DOMINION BANK
BANQUE NATIONALE DE PARIS
BANQUE PARIBAS
BARCLAYS BANK PLC
CIBC, INC.
CREDIT SUISSE
THE FIRST NATIONAL BANK OF MARYLAND
SIGNET BANK/VIRGINIA
THE TOYO TRUST AND BANKING COMPANY, LIMITED
TRUST COMPANY BANK
UNION BANK OF SWITZERLAND
WESTDEUTSCHE LANDESBANK GIROZENTRALE, New York and
Cayman Islands Branches
<PAGE> Exhibit 10(a)
-------------
(115 of 152)
DRAFT 7/1/94
EXHIBIT G
FORM OF ASSIGNMENT NOTICE AND
ACCEPTANCE
July 8, 1994
Bank of America National Trust
and Savings Association,
as Operating Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Global Agency
MCI Communications Corporation
1133 Nineteenth Street, N.W.
Washington, D.C. 20036
Attention: Corporate Law Department
Re: Revolving Credit Agreement dated as of
July 8, 1994;
Dear Sirs:
We refer to the Revolving Credit Agreement, dated as of July 8,
1994 (the "Credit Agreement"), among MCI Communications
Corporation, the Banks referred to therein, Bank of America
National Trust and Savings Association, as Competitive Bid Agent
and Operating Agent, and BA Securities, Inc., as Syndication Agent.
Terms defined in the Credit Agreement are used herein as therein
defined.
1. We hereby give you notice of, and request your consent to,
the assignment by (the "Assignor") to
(the "Assignee") of % of the right, title and interest of
the Assignor in and to the Credit Agreement and any Note or Notes
issued to the Assignor thereunder (including without limitation the
right, title and interest of the Assignor in and to the Commitments
of the Assignor and all outstanding Advances made by the Assignor).
Before giving effect to such assignment: the aggregate amount of
the Assignor's Commitments is $ and the aggregate principal
amount of its outstanding Advances is $ .
2. The Assignee hereby represents and warrants that it has
complied with the requirements of Section 9.07(a) of the Credit
Agreement in connection with this assignment.
<PAGE> Exhibit 10(a)
-------------
(116 of 152)
3. Upon receiving your consent to such assignment, the
Assignor will surrender to the Operating Agent any Note or Notes
then held by the Assignor, whereupon the Company is to deliver to
the Operating Agent a new Note or Notes in accordance with Section
9.07(a) of the Credit Agreement reflecting such assignment.
4. The Assignee agrees that, upon receiving your consent to
such assignment and from and after the Assignment Effective Date,
the Assignee will be bound by the terms of the Credit Agreement,
with respect to the interest in the Credit Agreement, any Notes and
the Guaranties assigned to it as specified above, as fully and to
the same extent as if the Assignee were the Bank originally holding
such interest in the Credit Agreement and such Notes.
5. The following administrative details apply to the
Assignee:
(A) Eurodollar Lending Office:
Assignee name:
Address:
Attention:
Telephone: ( )
Telecopier: ( )
Telex (Answerback):
(B) Domestic Lending Office:
Assignee name:
Address:
Attention:
Telephone: ( )
Telecopier: ( )
Telex (Answerback):
(C) Notice Address:
Assignee name:
Address:
Attention:
Telephone:
Telecopier:
Telex (Answerback)
<PAGE> Exhibit 10(a)
-------------
(117 of 152)
(D) Payment Instructions:
Account No.:
At:
Ref.:
Attention:
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
this Assignment Notice and Acceptance to be executed by their
respective duly authorized officials, officers or agents as of the
date first above mentioned.
Very truly yours,
[Name of Assignor]
By:
Title:
[Name of Assignee]
By:
Title:
We hereby consent to the
foregoing assignment.
MCI COMMUNICATIONS CORPORATION
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Operating Agent
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(118 of 152)
DRAFT 7/1/94
EXHIBIT H
FORM OF CONFIDENTIALITY AGREEMENT
, 19
[Insert Name and Address
of Bank]
Ladies and Gentlemen:
You have informed us that MCI Communications Corporation (the
"Company") has entered into a Revolving Credit Agreement, dated as
of July 8, 1994 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), with you and other
Banks, Bank of America National Trust and Savings Association, as
Operating Agent and Competitive Bid Agent, and BA Securities, Inc.,
as Syndication Agent.
You have also informed us that you have agreed to keep
confidential any information concerning the Company which shall be
furnished to you by or on behalf of the Company (herein
collectively referred to as the "Information"). The term
"Information" does not include information which (i) was or becomes
generally available to the public, other than as a result of a
disclosure by us or (ii) was or becomes available on a
non-confidential basis from a source other than the Company or its
advisors provided that such source is not known by us to be bound
by a confidentiality agreement with, or an obligation of
confidentiality to, the Company.
We are requesting that you provide us with a copy of certain of
the Information. We understand that we, as a Participant (as
defined in the Credit Agreement) or prospective Participant, must
enter into this Agreement before receiving any Information. Such
Information will be made available by you upon our execution of
this Agreement and delivery of a copy of this Agreement to the
Company. In consideration thereof, we agree that the Information
provided to us will be kept confidential, in accordance with our
customary procedure for handling confidential information and in
accordance with safe and sound practices, and will not be disclosed
by us except to the extent such disclosure would be permitted under
Section 9.08 of the Credit Agreement if we were a Bank party
thereto.
<PAGE> Exhibit 10(a)
-------------
(119 of 152)
We and our affiliates, directors, officers, employees and
representatives further agree (a) to be bound by the terms of this
Agreement whether or not we elect to purchase a participation and
(b) upon our purchase of a participation in the Credit Agreement to
be bound by the confidentiality provisions of the Credit Agreement
as if we were a Bank party thereto. We further agree to return to
you promptly all written Information (and any photocopies thereof)
in the event that we elect not to purchase a participation. This
Agreement shall inure to the benefit of the Company.
This Agreement shall become effective upon your receipt
thereof, and shall not be subject to any requirement that you
acknowledge such receipt.
This Agreement shall be governed by and construed in accordance
with the law of the State of New York.
Very truly yours,
[Insert Name of Participant]
By:
Title:
<PAGE> Exhibit 10(a)
-------------
(120 of 152)
<TABLE>
SCHEDULE II
MCI COMMUNICATIONS CORPORATION
FIVE-YEAR REVOLVING CREDIT FACILITY
PRICING GRID
(percentage points)
<S>
Pricing Level I Pricing Level II Pricing Level III Pricing Level IV
---------------- --------------- ---------------- -----------------
Long Term
Senior A+ A A- BBB+
Unsecured A+ A A- BBB+
Debt A1 A2 A3 Baa1
Ratings*
- ---------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Facility Fee: .08 .10 .125 .15
- --------------------------------------------------------------------------------------------
Eurodollar
Rate Advance
Margin: .20 .20 .20 .25
- --------------------------------------------------------------------------------------------
Pricing Level V Pricing Level VI Pricing Level VII
--------------- ---------------- -----------------
Long Term Below
Senior BBB BBB- BBB-
Unsecured BBB BBB- BBB-
Debt Baa2 Baa3 Baa3
Ratings*
- -------------------------------------------------------------------------
<C> <C> <C>
Facility Fee: .17 .20 .3125
- -------------------------------------------------------------------------
Eurodollar
Rate Advance
Margin: .30 .35 .5625
- -------------------------------------------------------------------------
* Ratings shown are those of S&P, Fitch and Moody's, respectively.
In the event of split rating, the highest rating will apply.
</TABLE>
<PAGE> Exhibit 10(a)
-------------
(121 of 152)
SCHEDULE I
LENDING OFFICES, ADDRESSES
FOR NOTICES, ETC.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
DOMESTIC LENDING OFFICE:
PSO #5693
1850 Gateway Boulevard
Concord, CA 94520
Attention: K. Lynne Calica
Telephone: (415) 675-7209
Rapifax: (415) 675-7531
EURODOLLAR LENDING OFFICE:
PSO #5693
1850 Gateway Boulevard
Concord, CA 94520
Attention: K. Lynne Calica
Telephone: (415) 675-7209
Rapifax: (415) 675-7531
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
PSO #5693
1850 Gateway Boulevard
Concord, CA 94520
Attention: K. Lynne Calica
Telephone: (415) 675-7209
Rapifax: (415) 675-7531
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
555 California Street
BISD Money Market Trading 3305
San Francisco, CA 94104
Attention: Carolyn Alberts
Telephone: (415) 622-2020
Rapifax: (415) 622-2237
<PAGE> Exhibit 10(a)
-------------
(122 of 152)
Copies: Douglas Bontemps
335 Madison Avenue
New York, NY 10017
Telephone: (212) 503-8074
Rapifax: (212) 503-7771
THE BANK OF NEW YORK
DOMESTIC LENDING OFFICE:
One Wall Street
New York, NY 10286
Attention: Lorna Alleyne
Telephone: (212) 635-6737
Rapifax: (212) 635-6399
EURODOLLAR LENDING OFFICE:
One Wall Street
New York, NY 10286
Attention: Lorna Alleyne
Telephone: (212) 635-6737
Rapifax: (212) 635-6399
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One Wall Street
New York, NY 10286
Attention: Lorna Alleyne
Telephone: (212) 635-6737
Rapifax: (212) 635-6399
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One Wall Street
New York, NY 10286
Attention: Lorna Alleyne
Telephone: (212) 635-6737
Rapifax: (212) 635-6399
<PAGE> Exhibit 10(a)
-------------
(123 of 152)
Copies of all Notices to:
One Wall Street
New York, NY 10286
Attention: Victoria Wohlsen
Telephone: (212) 635-1456
Rapifax: (212) 635-6434
One Wall Street
New York, NY 10286
Attention: Julie E. Brennan
Telephone: (212) 635-6899
Rapifax: (212) 635-6434
THE BANK OF NOVA SCOTIA
DOMESTIC LENDING OFFICE:
One Liberty Plaza, 26th Floor
New York, NY 10006
Attention: Tilsa Cora
Telephone: (212) 225-5044
Rapifax: (212) 225-5145
EURODOLLAR LENDING OFFICE:
One Liberty Plaza, 26th Floor
New York, NY 10006
Attention: Tilsa Cora
Telephone: (212) 225-5044
Rapifax: (212) 225-5154
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One Liberty Plaza, 26th Floor
New York, NY 10006
Attention: Tilsa Cora
Telephone: (212) 225-5044
Rapifax: (212) 225-5145
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One Liberty Plaza, 25th Floor
New York, NY 10006
Attention: Sara Schramm/James Trimble
Telephone: (212) 225-5550/(212) 225-5011
Rapifax: (212) 225-5517
<PAGE> Exhibit 10(a)
-------------
(124 of 152)
THE BANK OF TOKYO, LTD.,
NEW YORK AGENCY
DOMESTIC LENDING OFFICE:
100 Broadway
New York, NY 10005
Attention: Rochelle Collier
Telephone: (212) 413-8714
Rapifax: (212) 732-1678
Copies: Bank of Tokyo Trust Company
2000 K Street, N.W.
Suite 701
Washington, D.C. 20006
Attention: Stanley W. Starr
Telephone: (202) 463-0177
Rapifax: (202) 293-3416
EURODOLLAR LENDING OFFICE:
100 Broadway
New York, NY 10005
Attention: Rochelle Collier
Telephone: (212) 413-8714
Rapifax: (212) 732-1678
Copies: Bank of Tokyo Trust Company
2000 K Street, N.W.
Suite 701
Washington, D.C. 20006
Attention: Stanley W. Starr
Telephone: (202) 463-0177
Rapifax: (202) 293-3416
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
100 Broadway
New York, NY 10005
Attention: Rochelle Collier
Telephone: (212) 413-8714
Rapifax: (212) 732-1678
<PAGE> Exhibit 10(a)
-------------
(125 of 152)
Copies: Bank of Tokyo Trust Company
2000 K Street, N.W.
Suite 701
Washington, D.C. 20006
Attention: Stanley W. Starr
Telephone: (202) 463-0177
Rapifax: (202) 293-3416
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
100 Broadway
New York, NY 10005
Attention: Rochelle Collier
Telephone: (212) 413-8714
Rapifax: (212) 732-1678
One Wall Street
New York, NY 10286
Attention: Lorna Alleyne
Telephone: (212) 635-6737
Rapifax: (212) 635-6399
BANQUE NATIONALE DE PARIS
DOMESTIC LENDING OFFICE:
499 Park Avenue, 2nd Floor
New York, NY 10022-1240
Attention: Roy Johnson
Telephone: (212) 415-9785
Rapifax: (212) 415-9695
EURODOLLAR LENDING OFFICE:
499 Park Avenue, 2nd Floor
New York, NY 10022-1240
Attention: Roy Johnson
Telephone: (212) 415-9785
Rapifax: (212) 415-9695
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
499 Park Avenue, 2nd Floor
New York, NY 10022-1240
Attention: Roy Johnson
Telephone: (212) 415-9785
Rapifax: (212) 415-9695
<PAGE> Exhibit 10(a)
-------------
(126 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
499 Park Avenue, 2nd Floor
New York, NY 10022-1240
Attention: Roy Johnson
Telephone: (212) 415-9785
Rapifax: (212) 415-9695
BANQUE PARIBAS
DOMESTIC LENDING OFFICE:
The Equitable Tower
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Attention: Terry Knuth
Telephone: (212) 841-2229
Rapifax: (212) 841-2217
EURODOLLAR LENDING OFFICE:
The Equitable Tower
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Attention: Terry Knuth
Telephone: (212) 841-2229
Rapifax: (212) 841-2217
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
The Equitable Tower
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Attention: Terry Knuth
Telephone: (212) 841-2396
Rapifax: (212) 841-2217
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
The Equitable Tower
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Attention: Ms. Wendy Tso
Telephone: (212) 841-2396
Rapifax: (212) 841-2555
<PAGE> Exhibit 10(a)
-------------
(127 of 152)
BARCLAYS BANK PLC
DOMESTIC LENDING OFFICE:
222 Broadway, 12th Floor
New York, NY 10038
Attention: Sandra Coye
Telephone: (212) 412-4014
Rapifax: (212) 412-5002
EURODOLLAR LENDING OFFICE:
222 Broadway, 12th Floor
New York, NY 10038
Attention: Sandra Coye
Telephone: (212) 412-4014
Rapifax: (212) 412-5002
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
222 Broadway, 12th Floor
New York, NY 10038
Attention: Sandra Coye
Telephone: (212) 412-4014
Rapifax: (212) 412-5002
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
222 Broadway, 8th Floor
New York, NY 10038
Attention: Greg Hurley
Telephone: (212) 412-2091
Rapifax: (212) 412-4020
CHEMICAL BANK
DOMESTIC LENDING OFFICE:
270 Park Avenue, 8th Floor
New York, NY 10017
Attention: Ganesh Persaud
Telephone: (212) 270-2511
Rapifax: (212) 270-4016
<PAGE> Exhibit 10(a)
-------------
(128 of 152)
EURODOLLAR LENDING OFFICE:
270 Park Avenue, 8th Floor
New York, NY 10017
Attention: Ganesh Persaud
Telephone: (212) 270-2511
Rapifax: (212) 270-4016
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
270 Park Avenue, 8th Floor
New York, NY 10017
Attention: Ganesh Persaud
Telephone: (212) 270-2511
Rapifax: (212) 270-4016
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
270 Park Avenue, 8th Floor
New York, NY 10017
Attention: Russell Gmuca
Telephone: (212) 834-3462
Rapifax: (212) 308-0163
CIBC, INC.
DOMESTIC LENDING OFFICE:
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, GA 30339
Attention: Ann Milam
Telephone: (404) 319-4831
Rapifax: (404) 319-4950
EURODOLLAR LENDING OFFICE:
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, GA 30339
Attention: Ann Milam
Telephone: (404) 319-4831
Rapifax: (404) 319-4950
<PAGE> Exhibit 10(a)
-------------
(129 of 152)
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, GA 30339
Attention: Ann Milam
Telephone: (404) 319-4831
Rapifax: (404) 319-4950
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
425 Lexington Avenue
New York, NY 10017
Attention: Carol Kizzia
Telephone: (212) 856-3693
Rapifax: (212) 856-6699
THE CHASE MANHATTAN BANK, N.A.
DOMESTIC LENDING OFFICE:
One Chase Manhattan Plaza, 4th Floor
New York, NY 10081
Attention: Connie Mandracchia
Telephone: (212) 552-1136
Rapifax: (212) 552-7623
EURODOLLAR LENDING OFFICE:
One Chase Manhattan Plaza, 4th Floor
New York, NY 10081
Attention: Connie Mandracchia
Telephone: (212) 552-1136
Rapifax: (212) 552-7623
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One Chase Manhattan Plaza, 4th Floor
New York, NY 10061
Attention: Connie Mandracchia
Telephone: (212) 552-1136
Rapifax: (212) 552-7623
<PAGE> Exhibit 10(a)
-------------
(130 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One Chase Manhattan Plaza, 35th Floor
New York, NY 10081
Attention: Frank Angelico
Telephone: (212) 552-7482
Rapifax: (212) 552-2783
CITIBANK, N.A.
DOMESTIC LENDING OFFICE:
399 Park Avenue, 4th Floor
New York, New York 10043
Attention: Sophie Tetenes
Telephone: (212) 559-5916
Rapifax: (212) 593-0054
EURODOLLAR LENDING OFFICE:
399 Park Avenue, 4th Floor
New York, New York 10043
Attention: Sophie Tetenes
Telephone: (212) 559-5916
Rapifax: (212) 593-0054
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
399 Park Avenue, 4th Floor
New York, NY 10043
Attention: Sophie Tetenes
Telephone: (212) 559-5916
Rapifax: (212) 593-0054
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One Court Square
45th Floor/Zone 8
Long Island City, NY 11101
Attention: Doris Mitchell
Telephone: (718) 248-3648
Rapifax: (718) 248-3090/3091
<PAGE> Exhibit 10(a)
-------------
(131 of 152)
CONTINENTAL BANK
DOMESTIC LENDING OFFICE:
231 S. LaSalle St.
Chicago, IL 60697-00021
Attention: Darla Collins
Telephone: (312) 828-6664
Rapifax: (312) 974-9102
EURODOLLAR LENDING OFFICE:
231 S. LaSalle Street
Chicago, IL 60697-00021
Attention: Darla Collins
Telephone: (312) 828-6664
Rapifax: (312) 974-9102
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
231 S. LaSalle Street
Chicago, IL 60697-00021
Attention: Darla Collins
Telephone: (312) 828-6664
Rapifax: (312) 974-9102
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
231 LaSalle Street
Chicago, IL 60697-00021
Attention: Darla Collins
Telephone: (312) 828-6664
Rapifax: (312) 974-9102
CREDIT SUISSE
DOMESTIC LENDING OFFICE:
12 East 49th Street
New York, NY 10017
Attention: Yvette McQueen
Telephone: (212) 238-5361
Rapifax: (212) 238-5389
<PAGE> Exhibit 10(a)
-------------
(132 of 152)
EURODOLLAR LENDING OFFICE:
12 East 49th Street
New York, NY 10017
Attention: Yvette McQueen
Telephone: (212) 238-5361
Rapifax: (212) 238-5389
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
12 East 49th Street
New York, NY 10017
Attention: Yvette McQueen
Telephone: (212) 238-5361
Rapifax: (212) 238-5389
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
12 East 49th Street
New York, NY 10017
Attention: Yvette McQueen
Telephone: (212) 238-5361
Rapifax: (212) 238-5389
THE DAI-ICHI KANGYO BANK, LTD.
DOMESTIC LENDING OFFICE:
One World Trade Center, 48th Floor
New York, NY 10048
Attention: Elsie de la Torre
Telephone: (212) 432-6644
Rapifax: (212) 524-0579
EURODOLLAR LENDING OFFICE:
One World Trade Center, 48th Floor
New York, NY 10048
Attention: Elsie de la Torre
Telephone: (212) 432-6644
Rapifax: (212) 524-0579
<PAGE> Exhibit 10(a)
-------------
(133 of 152)
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One World Trade Center, 48th Floor
New York, NY 10048
Attention: Elsie de la Torre
Telephone: (212) 432-6644
Rapifax: (212) 524-0579
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One World Trade Center, 48th Floor
New York, NY 10048
Attention: Andreas Panteli
Telephone: (212) 432-6633
Rapifax: (212) 524-0579
DEUTSCHE BANK AG,
NEW YORK AND/OR CAYMAN ISLANDS BRANCH
DOMESTIC LENDING OFFICE:
31 West 52 Street
New York, NY 10019-2601
Attention: Aloida Kohen
Telephone: (212) 474-8208
Rapifax: (212) 474-8212
EURODOLLAR LENDING OFFICE:
31 West 52 Street
New York, NY 10019-2601
Attention: Aloida Kohen
Telephone: (212) 474-8208
Rapifax: (212) 474-8212
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
31 West 52 Street
New York, NY 10019-2601
Attention: Aloida Kohen
Telephone: (212) 474-8208
Rapifax: (212) 474-8212
<PAGE> Exhibit 10(a)
-------------
(134 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
31 West 52 Street
New York, NY 10019
Attention: Aloida Kohen
Telephone: (212) 474-8208
Rapifax: (212) 474-8212
FIRST INTERSTATE BANK OF CALIFORNIA
DOMESTIC LENDING OFFICE:
1055 Wilshire Boulevard
Los Angeles, CA 90017
Attention: Denise Houston
Telephone: (213) 580-6148
Rapifax: (213) 488-9909/9959
EURODOLLAR LENDING OFFICE:
1055 Wilshire Boulevard
Los Angeles, CA 90017
Attention: Denise Houston
Telephone: (213) 580-6148
Rapifax: (213) 488-9909/9959
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
1055 Wilshire Boulevard
Los Angeles, CA 90017
Attention: Denise Houston
Telephone: (213) 580-6148
Rapifax: (213) 488-9909/9959
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
707 Wilshire Boulevard, (W16-20)
Los Angeles, CA 90017
Attention: Matthew Frey
Telephone: (213) 614-5038
Rapifax: (213) 614-2305
<PAGE> Exhibit 10(a)
-------------
(135 of 152)
THE FIRST NATIONAL BANK OF CHICAGO
DOMESTIC LENDING OFFICE:
One First National Plaza, Suite 0363, 1-10
Chicago, IL 60670-0363
Attention: Lynn Pozsgay
Telephone: (312) 732-8705
Rapifax: (312) 732-4840
EURODOLLAR LENDING OFFICE:
One First National Plaza, Suite 0363, 1-10
Chicago, IL 60670-0363
Attention: Lynn Pozsgay
Telephone: (312) 732-8705
Rapifax: (312) 732-4840
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One First National Plaza, Suite 0363, 1-10
Chicago, IL 60670-0363
Attention: Lynn Pozsgay
Telephone: (312) 732-8705
Rapifax: (312) 732-4840
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One First National Plaza, Suite 0363, 1-10
Chicago, IL 60670-0363
Attention: Lynn Pozsgay
Telephone: (312) 732-8705
Rapifax: (312) 732-4840
THE FIRST NATIONAL BANK OF MARYLAND
DOMESTIC LENDING OFFICE:
1800 K. Street, N.W.
Washington, D.C. 20006
Attention: Lauren Johnston
Telephone: (202) 775-4827
Rapifax: (202) 775-4838
<PAGE> Exhibit 10(a)
-------------
(136 of 152)
EURODOLLAR LENDING OFFICE:
1800 K. Street, N.W.
Washington, D.C. 20006
Attention: Lauren Johnston
Telephone: (202) 775-4827
Rapifax: (202) 775-4838
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
1800 K Street, N.W.
Washington, D.C. 20006
Attention: Lauren Johnston
Telephone: (202) 775-4827
Rapifax: (202) 775-4838
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
1800 K Street, N.W.
Washington, D.C. 20006
Attention: Lauren Johnston
Telephone: (202) 775-4827
Rapifax: (202) 775-4838
THE FUJI BANK, LIMITED,
NEW YORK BRANCH
DOMESTIC LENDING OFFICE:
Two World Trade Center
New York, NY 10048-0001
Attention: Kathleen Barsotti
Telephone: (212) 898-2065
Rapifax: (212) 912-0516
EURODOLLAR LENDING OFFICE:
Two World Trade Center
New York, NY 10048-0001
Attention: Kathleen Barsotti
Telephone: (212) 898-2065
Rapifax: (212) 912-0516
<PAGE> Exhibit 10(a)
-------------
(137 of 152)
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
Two World Trade Center
New York, NY 10048-0001
Attention: Kathleen Barsotti
Telephone: (212) 898-2065
Rapifax: (212) 912-0516
NOTICE ADRESS REGARDING
COMPETITIVE BID ADVANCES:
Two World Trade Center
New York, NY 10048-0001
Attention: Kathleen Barsotti
Telephone: (212) 898-2065
Rapifax: (212) 912-0516
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH
DOMESTIC LENDING OFFICE:
245 Park Avenue
New York, NY 10167
Attention: Adriene Mays
Telephone: (212) 309-6563
Rapifax: (212) 949-0134
EURODOLLAR LENDING OFFICE:
245 Park Avenue
New York, NY 10167
Attention: Adriene Mays
Telephone: (212) 309-6563
Rapifax: (212) 949-0134
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
245 Park Avenue
New York, NY 10167
Attention: Adriene Mays
Telephone: (212) 309-6563
Rapifax: (212) 949-0134
<PAGE> Exhibit 10(a)
-------------
(138 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
245 Park Avenue
New York, New York 10167
Attention: Grace Rocco
Telephone: (212) 309-6620
Rapifax: (212) 949-0134
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
NEW YORK BRANCH
DOMESTIC LENDING OFFICE:
165 Broadway
New York, NY 10006
Attention: Robert Pacifici
Telephone: (212) 335-4801
Rapifax: (212) 608-3452
EURODOLLAR LENDING OFFICE:
165 Broadway
New York, NY 10006
Attention: Robert Pacifici
Telephone: (212) 335-4801
Rapifax: (212) 608-3452
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
165 Broadway
New York, NY 10006
Attention: Robert Pacifici
Telephone: (212) 335-4801
Rapifax: (212) 608-3452
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
165 Broadway
New York, NY 10006
Attention: Robert Pacifici
Telephone: (212) 335-4801
Rapifax: (212) 608-3452
<PAGE> Exhibit 10(a)
-------------
(139 of 152)
MELLON BANK, N.A.
DOMESTIC LENDING OFFICE:
Three Mellon Bank Center, 23rd Floor
Pittsburgh, PA 15259
Attention: Carol Bufalini
Telephone: (412) 234-4714
Rapifax: (412) 236-2027
EURODOLLAR LENDING OFFICE:
Three Mellon Bank Center, 23rd Floor
Pittsburgh, PA 15259
Attention: Carol Bufalini
Telephone: (412) 234-4714
Rapifax: (412) 236-2027
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
Three Mellon Bank Center, 23rd Floor
Pittsburgh, PA 15259
Attention: Carol Bufalini
Telephone: (412) 234-4714
Rapifax: (412) 236-2027
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
Three Mellon Bank Center, 23rd Floor
Pittsburgh, PA 15259
Attention: Carol Bufalini
Telephone: (412) 234-4714
Rapifax: (412) 236-2027
THE MITSUBISHI BANK, LIMITED
DOMESTIC LENDING OFFICE:
225 Liberty Street
Two World Financial Center
New York, NY 10281
Attention: Frank Conigliaro, Jr.
Telephone: (212) 667-2670
Rapifax: (212) 667-3554
<PAGE> Exhibit 10(a)
-------------
(140 of 152)
EURODOLLAR/LENDING OFFICE:
225 Liberty Street
Two World Financial Center
New York, NY 10281
Attention: Frank Conigliaro, Jr.
Telephone: (212) 667-2670
Rapifax: (212) 667-3554
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
225 Liberty Street
Two World Financial Center
New York, NY 10281
Attention: Frank Conigliaro, Jr.
Telephone: (212) 667-2670
Rapifax: (212) 667-3554
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
225 Liberty Street
Two World Financial Center
New York, NY 10281
Attention: Frank Conigliaro, Jr.
Telephone: (212) 667-2670
Rapifax: (212) 667-3554
NATIONSBANK OF VIRGINIA, N.A.
DOMESTIC LENDING OFFICE:
100 N. Tryon Street
Charlotte, NC 28255
Attention: William White
Telephone: (704) 386-7891
Rapifax: (704) 386-8694
EURODOLLAR LENDING OFFICE:
100 N. Tryon Street
Charlotte, NC 28255
Attention: William White
Telephone: (704) 386-7891
Rapifax: (704) 386-8694
<PAGE> Exhibit 10(a)
-------------
(141 of 152)
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
100 N. Tryon Street
Charlotte, NC 28255
Attention: William White
Telephone: (704) 386-7891
Rapifax: (704) 386-8694
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
100 N. Tryon Street
Charlotte, NC 28255
Attention: William White
Telephone: (704) 386-7891
Rapifax: (704) 386-8694
PNC BANK, NATIONAL ASSOCIATION
DOMESTIC LENDING OFFICE:
Broad and Chestnut Streets, 9th Floor
MS 12-09-01
Philadelphia, PA 19101-0002
Attention: Diane Flannery
Telephone: (215) 585-7457
Rapifax: (215) 585-6680
EURODOLLAR LENDING OFFICE:
Broad and Chestnut Streets, 9th Floor
MS 12-09-01
Philadelphia, PA 19101-0002
Attention: Diane Flannery
Telephone: (215) 585-7457
Rapifax: (215) 585-6680
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
Broad and Chestnut Streets, 9th Floor
MS 12-09-01
Philadelphia, PA 19101-0002
Attention: Diane Flannery
Telephone: (215) 585-7457
Rapifax: (215) 585-6680
<PAGE> Exhibit 10(a)
-------------
(142 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
Broad and Chestnut Streets, 9th Floor
MS 12-09-01
Philadelphia, PA 19101-0002
Attention: Diane Flannery
Telephone: (215) 585-7457
Rapifax: (215) 585-6680
THE SANWA BANK, LTD.
DOMESTIC LENDING OFFICE:
55 E. 52nd St., 4th Floor
New York, NY 10055
Attention: Renko Hara
Telephone: (212) 339-6390
Rapifax: (212) 754-2368
EURODOLLAR LENDING OFFICE:
55 E. 52nd St., 4th Floor
New York, NY 10055
Attention: Renko Hara
Telephone: (212) 339-6390
Rapifax: (212) 754-2368
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
55 E. 52nd St., 4th Floor
New York, NY 10055
Attention: Renko Hara
Telephone: (212) 339-6390
Rapifax: (212) 754-2368
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
55 E. 52nd St., 4th Floor
New York, NY 10055
Attention: Dominic Sorresso
Telephone: (212) 339-6197
Rapifax: (212) 754-1304
<PAGE> Exhibit 10(a)
-------------
(143 of 152)
SIGNET BANK/VIRGINIA
DOMESTIC LENDING OFFICE:
7700 Wisconsin Avenue, Suite 400
Bethesda, MD 20814
Attention: Vincent P. Griffin
Telephone: (301) 961-9762
Rapifax: (301) 652-1174
EURODOLLAR LENDING OFFICE:
7700 Wisconsin Avenue, Suite 400
Bethesda, MD 20814
Attention: Vincent P. Griffin
Telephone: (301) 961-9762
Rapifax: (301) 652-1174
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
7700 Wisconsin Avenue, Suite 400
Bethesda, MD 20814
Attention: Vincent P. Griffin
Telephone: (301) 961-9762
Rapifax: (301) 652-1174
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
707 East Main Street, 12th Floor
Richmond, VA 23260
Attention: Judy Wolk
Telephone: (804) 771-7481
Rapifax: (804) 225-8225
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
DOMESTIC LENDING OFFICE:
One World Trade Center
Suite 9651
New York, NY 10048-0001
Attention: Diana Hurtzig
Telephone: (212) 553-0153
Rapifax: (212) 553-0118
<PAGE> Exhibit 10(a)
-------------
(144 of 152)
EURODOLLAR LENDING OFFICE:
One World Trade Center
Suite 9651
New York, NY 10048-0001
Attention: Diana Hurtzig
Telephone: (212) 553-0153
Rapifax: (212) 553-0118
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
One World Trade Center
Suite 9651
New York, NY 10048-0001
Attention: Diana Hurtzig
Telephone: (212) 553-0153
Rapifax: (212) 553-0118
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
One World Trade Center
Suite 9651
New York, NY 10048-0001
Attention: Diana Hurtzig
Telephone: (212) 553-0153
Rapifax: (212) 553-0118
TORONTO DOMINION (NEW YORK), INC.
DOMESTIC LENDING OFFICE:
909 Fannin Street
Houston, TX 77010
Attention: Fred Hawley
Telephone: (713) 653-8281
Rapifax: (713) 951-9921
EURODOLLAR LENDING OFFICE:
909 Fannin Street
Houston, TX 77010
Attention: Fred Hawley
Telephone: (713) 653-8281
Rapifax: (713) 951-9921
<PAGE> Exhibit 10(a)
-------------
(145 of 152)
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
909 Fannin Street
Houston, TX 77010
Attention: Fred Hawley
Telephone: (713) 653-8281
Rapifax: (713) 951-9921
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
909 Fannin Street
Houston, TX 77010
Attention: Fred Hawley
Telephone: (713) 653-8281
Rapifax: (713) 951-9921
31 West 52nd Street, 21st Floor
New York, NY 10019
Attention: Randy Namin
Telephone: (212) 468-0400
Rapifax: (212) 262-1949
THE TOYO TRUST AND BANKING
COMPANY, LIMITED
DOMESTIC LENDING OFFICE:
437 Madison Avenue
New York, NY 10022-7001
Attention: Gregory W. Blaszczynski
Telephone: (212) 371-3535
Rapifax: (212) 371-4963
EURODOLLAR LENDING OFFICE:
437 Madison Avenue
New York, NY 10022-7001
Attention: Gregory W. Blaszczynski
Telephone: (212) 371-3535
Rapifax: (212) 371-4963
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
437 Madison Avenue
New York, NY 10022-7001
Attention: Ray Valentin
Telephone: (212) 371-3535
Rapifax: (212) 371-4963
<PAGE> Exhibit 10(a)
-------------
(146 of 152)
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
437 Madison Avenue
New York, NY 10022-7001
Attention: Gregory W. Blaszczynski
Telephone: (212) 371-3535
Rapifax: (212) 371-4963
TRUST COMPANY BANK
DOMESTIC LENDING OFFICE:
S.E. Division, 23rd Floor 118
25 Park Place, N.E.
Atlanta, GA 30303-2900
Attention: Sharon Judge
Telephone: (404) 588-8341
Rapifax: (404) 588-8833
EURODOLLAR LENDING OFFICE:
S.E. Division, 23rd Floor 118
25 Park Place, N.E.
Atlanta, GA 30303-2900
Attention: Sharon Judge
Telephone: (404) 588-8341
Rapifax: (404) 588-8833
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
S.E. Division, 23rd Floor 118
25 Park Place, N.E.
Atlanta, GA 30303-2900
Attention: Sharon Judge
Telephone: (404) 588-8341
Rapifax: (404) 588-8833
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
S.E. Division, 23rd Floor 118
25 Park Place, N.E.
Atlanta, GA 30303-2900
Attention: Sharon Judge
Telephone: (404) 588-8341
Rapifax: (404) 588-8833
<PAGE> Exhibit 10(a)
-------------
(147 of 152)
UNION BANK OF SWITZERLAND
DOMESTIC LENDING OFFICE:
New York Branch
299 Park Avenue
New York, NY 10171
Attention: Mike Peterson, Loan Servicing Group
Telephone: (212) 821-3230
Rapifax: (212) 821-3259
EURODOLLAR LENDING OFFICE:
New York Branch
299 Park Avenue
New York, NY 10171
Attention: Mike Peterson, Loan Servicing Group
Telephone: (212) 821-3230
Rapifax: (212) 821-3259
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
New York Branch
299 Park Avenue
New York, NY 10171
Attention: Mike Peterson, Loan Servicing Group
Telephone: (212) 821-3230
Rapifax: (212) 821-3259
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
New York Branch
299 Park Avenue
New York,NY 10171
Attention: Peter B. Yearley/James P. Kelleher
Corporate & Institutional Banking
Telephone: (212) 821-3339/(212) 821-3484
Rapifax: (212) 821-3383
<PAGE> Exhibit 10(a)
-------------
(148 of 152)
WACHOVIA BANK OF GEORGIA, N.A.
DOMESTIC LENDING OFFICE:
191 Peachtree St., N.E.
Atlanta, GA 30303
Attention: Peaches Brown
Telephone: (404) 332-5281
Rapifax: (404) 332-1118
EURODOLLAR LENDING OFFICE:
191 Peachtree St., N.E.
Atlanta, GA 30303
Attention: Peaches Brown
Telephone: (404) 332-5281
Rapifax: (404) 332-1118
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
191 Peachtree St., N.E.
Atlanta, GA 30303
Attention: Peaches Brown
Telephone: (404) 332-5281
Rapifax: (404) 332-1118
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attention: Shawne Bailey
Telephone: (404) 332-6688
Rapifax: (404) 332-6898
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES
DOMESTIC LENDING OFFICE:
1211 Avenue of the Americas
New York, NY 10036
Attention: Joanna Yuan
Telephone: (212) 852-6155
Rapifax: (212) 302-7946
<PAGE> Exhibit 10(a)
-------------
(149 of 152)
EURODOLLAR LENDING OFFICE:
1211 Avenue of the Americas
New York, NY 10036
Attention: Joanna Yuan
Telephone: (212) 852-6155
Rapifax: (212) 302-7946
NOTICE ADDRESS REGARDING
PRO RATA ADVANCES:
1211 Avenue of the Americas
New York, NY 10036
Attention: Joanna Yuan
Telephone: (212) 852-6155
Rapifax: (212) 302-7946
NOTICE ADDRESS REGARDING
COMPETITIVE BID ADVANCES:
1211 Avenue of the Americas
New York, NY 10036
Attention: Lucie L. Guernsey
Telephone: (212) 852-6134
Rapifax: (212) 852-6307
<PAGE> Exhibit 10(a)
-------------
(150 of 152)
SCHEDULE III
Pending Litigation Against the
Company or its Subsidiaries
as of July 8, 1994
Section 3.06
NONE
<PAGE> Exhibit 10(a)
-------------
(151 of 152)
SCHEDULE IV
Environmental Matters Affecting
the Company or its Subsidiaries
as of July 8, 1994
Section 3.13
NONE
<PAGE> Exhibit 10(a)
-------------
(152 of 152)
SCHEDULE V
Liens Existing on the Property of
MCI Telecom
as of July 8, 1994
Section 6.01(a)
Liens securing the following Indebtedness:
Conditional sales agreements and other title retention agreements
of MCI Telecom or reflected on the balance sheet of the Company
as of March 31, 1994.
Other obligations to pay for deferred purchase price of property
or services of MCI Telecom as reflected on the balance
sheet of the Company as of March 31, 1994.
Other Indebtedness secured by Liens either outstanding as of
March 31, 1994 or incurred after such date, which
Indebtedness is not material to MCI Telecom.
It is understood that under the Credit Agreement, the interests
of lessors under Capitalized Lease Obligations of MCI
Telecom reflected on the balance sheet of the Company as of
March 31, 1994 are not Liens.
<PAGE> Exhibit 10(b)
-------------
( 1 of 2 )
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
August 2, 1994
British Telecommunications plc
BT Centre
81 Newgate Street
London EC1A 7AJ
England
Attention: Mr. Colin R. Green
Solicitor and Chief Legal Advisor
Dear Sirs:
Reference is made to the Amended and Restated Investment
Agreement, dated as of January 31, 1994 (the "Investment
Agreement"), between you and us. This will confirm, in
accordance with Section 14.6(b) of the Investment Agreement, our
agreement that effective as of today Section 13.1(b) of the
Investment Agreement be amended and restated to read in its
entirety as follows:
"(b) Expiration Date. By the Company or BT by written
notice to the other party at any time after November 30, 1994 if
any condition is not waived or satisfied within the period ending
on such date until such time as all conditions are waived or
satisfied; provided, however, that if any condition shall not
have been waived or satisfied within such period due to the
willful act or omission of one of the parties, that party may not
terminate this Agreement."
Except as expressly provided herein, this letter agreement
shall not be deemed to be a waiver of, or consent to, or a
modification or amendment of, any other term or condition of the
Investment Agreement.
<PAGE> Exhibit 10(b)
-------------
( 2 of 2 )
Mr. Colin R. Green -2- August 2, 1994
This letter agreement shall be governed by and construed in
accordance with the internal laws of the State of New York and
may be executed in one or more counterparts.
Very truly yours,
MCI COMMUNICATIONS
CORPORATION
By:
Title:
Accepted and Agreed:
BRITISH TELECOMMUNICATIONS plc
By:
Title:
Exhibit 11
-------------
(Page 1 of 2)
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In millions, except per share amounts)
(unaudited)
Three months Six months
ended ended
June 30, June 30,
------------- ------------
1994 1993 1994 1993
---- ---- ---- ----
Primary
- -------
Income before extraordinary item.......... $215 $178 $424 $346
Loss on early debt retirement, less
applicable income tax benefit........... - 28 - 45
---- ---- ---- ----
Net income ............................... 215 150 424 301
Dividends on preferred stock.............. 1 1 1 1
---- ---- ---- ----
Earnings applicable to common
stockholders............................ 214 149 423 300
==== ==== ==== ====
Add back:
Convertible preferred stock dividends..... 1 1 1 1
---- ---- ---- ----
Earnings as adjusted for purposes of
computing earnings per share............ $215 $150 $424 $301
==== ==== ==== ====
Adjustment of shares outstanding:
Weighted average shares of common stock
outstanding ............................ 540 541 541 535
Assumed conversion of preferred stock..... 27 8 27 4
Assumed exercise of common stock options.. 45 48 45 52
Shares of common stock assumed repurchased
for treasury(a)......................... (37) (43) (36) (46)
---- ---- ---- ----
Adjusted shares of common stock and common
stock equivalents for computation....... 575 554 577 545
==== ==== ==== ====
Earnings per common and common equivalent shares:
Income before extraordinary item.......... $.37 $.32 $.73 $.63
Loss on early debt retirement............. - .05 - .08
---- ---- ---- ----
$.37 $.27 $.73 $.55
==== ==== ==== ====
- --------------------------------
(a) At an average market price of $23.18 and $24.73 for the three and six months
ended June 30, 1994, respectively, and $25.31 and $23.07 for the three and
six months ended June 30, 1993, respectively.
<PAGE> Exhibit 11
-------------
(Page 2 of 2)
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In millions, except per share amounts)
(unaudited)
Three months Six months
ended ended
June 30, June 30,
------------- ------------
1994 1993 1994 1993
---- ---- ---- ----
Assuming Full Dilution
- ----------------------
Income before extraordinary item.......... $215 $178 $424 $346
Loss on early debt retirement, less
applicable income tax benefit........... - 28 - 45
---- ---- ---- ----
Net income ............................... 215 150 424 301
Dividends on preferred stock.............. 1 1 1 1
---- ---- ---- ----
Earnings applicable to common
stockholders............................ 214 149 423 300
==== ==== ==== ====
Add back:
Convertible preferred stock dividends..... 1 1 1 1
---- ---- ---- ----
Earnings as adjusted for purposes of
computing earnings per share............ $215 $150 $424 $301
==== ==== ==== ====
Adjustment of shares outstanding:
Weighted average shares of common stock
outstanding ............................ 540 541 541 535
Assumed conversion of preferred stock..... 27 8 27 4
Assumed exercise of common stock options.. 45 48 45 52
Shares of common stock assumed repurchased
for treasury(b)......................... (37) (38) (36) (37)
---- ---- ---- ----
Adjusted shares of common stock and common
stock equivalents for computation....... 575 559 577 554
==== ==== ==== ====
Earnings per common and common equivalent shares:
Income before extraordinary item.......... $.37 $.32 $.73 $.62
Loss on early debt retirement............. - .05 - .08
---- ---- ---- ----
$.37 $.27 $.73 $.54
==== ==== ==== ====
- --------------------------------
(b) At an average market price of $23.18 and $24.73 for the three and six months
ended June 30, 1994, which is higher than the ending market price for the
relevant periods then ended.
At the ending market price of $28.75 for the three and six months ended
June 30, 1993, which is higher than the average market price of $25.31 and
$23.07 for the three and six months ended June 30, 1993.
<PAGE>
Exhibit 12
----------
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratio amounts)
(unaudited)
Six Months Ended
June 30, Year Ended December 31,
------------------ --------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
Earnings:
Income before
income taxes and
extraordinary item
per income statement $682 $558 $1,045 $ 963 $ 848 $440 $ 804
Add:
Fixed charges 153 175 315 346 334 321 330
Less:
Capitalized interest 38 27 61 52 58 49 44
---- ---- ------ ------ ------ ---- ------
Total earnings $797 $706 $1,299 $1,257 $1,124 $712 $1,090
==== ==== ====== ====== ====== ==== ======
Fixed Charges:
Fixed charges on
indebtedness,
including amortization
of debt discount and
premium $110 $ 137 $239 $ 270 $ 270 $262 $ 282
Interest portion of
operating lease
rentals (a) 43 38 76 76 64 59 48
---- ---- ------ ------ ------ ---- ------
Total fixed charges $153 $ 175 $315 $ 346 $ 334 $321 $ 330
==== ==== ====== ====== ====== ==== ======
Ratio of earnings to
fixed charges 5.21 4.03 4.12 3.63 3.37 2.22 3.30
==== ==== ====== ====== ====== ==== ======
(a) The interest portion of operating lease rentals is calculated as one third
of rent expense which represents a reasonable approximation of the interest
factor.
<PAGE>
Exhibit 99(a)
-------------
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CAPITALIZATION SCHEDULE
(In millions)
Set forth below is the capitalization of the company as of June 30, 1994:
Debt(a):
Secured debt:
Capital lease obligations ........................... $ 637
Other secured obligations ........................... 4
------
Total secured debt ................................ 641
------
Unsecured debt:
Senior Notes, net ................................... 1,511
Senior Debentures, net............................... 884
Other unsecured debt................................. 118
------
Total unsecured debt .............................. 2,513
------
Total debt ..................................... 3,154
------
Stockholders' equity:
Series D convertible preferred stock, $.10 par value,
authorized and outstanding 13,736 shares $ 1
Common stock, $.10 par value, authorized 800 million
shares, issued 592 million shares.................. 60
Additional paid in capital........................... 2,581
Retained earnings.................................... 3,195
Treasury stock at cost, 52 million shares............ (796)
------
Total stockholders' equity...................... 5,041
------
Total capitalization............................ $8,195
======
(a) See Note 3 of Notes to Consolidated Financial Statements on pages 35 and
36 of the company's Annual Report on Form 10-K for the year ended
December 31, 1993 for additional information concerning the company's
capital lease obligations, which are obligations of subsidiaries of the
company that are guaranteed by the company. Interest rates on capital
lease obligations, on a weighted average basis, approximated 8.1% per
annum at June 30, 1994.
For additional information concerning the company's long-term debt, see
Note 4 of Notes to Consolidated Financial Statements on pages 36 through
38 of the company's Annual Report on Form 10-K for the year ended
December 31, 1993.
