SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 3, 1996
(September 26, 1996)
MCI COMMUNICATIONS CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-6457 52-0886267
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (202) 872-1600.
<PAGE>
PAGE 2
Item 5. Other Events.
The registrant, on September 26, 1996, entered into a Revolving Credit
Agreement with Bank of America National Trust and Savings Association, as agent
("Bank of America"), and the several financial institutions parties thereto (the
"Revolving Credit Agreement"), under which the registrant may borrow up to
$2,000,000,000. The Revolving Credit Agreement replaces the $2,000,000,000
revolving credit agreement, dated as of July 8, 1994, among the registrant, Bank
of America and the several financial institutions parties thereto.
In addition, the registrant has registered an additional $1,000,000,000
aggregate principal amount of debt securities pursuant to Registration Statement
on Form S-3 (File No. 333-11193), as amended by Post-Effective Amendment No. 1,
filed by the registrant with the Securities and Exchange Commission (the
"Commission") on September 30, 1996 and declared effective by the Commission on
October 2, 1996. The Registration Statement covers fixed rate and floating rate
debt securities which the registrant may issue from time to time, including, but
not limited to, fixed and floating rate senior debt securities, the forms of
which are filed herewith.
Item 7. Financial Statements and Exhibits.
Exhibit No. Description
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4 (a) Form of Senior Fixed Rate Medium-Term Note.
4 (b) Form of Senior Floating Rate Medium-Term Note.
10 $2,000,000,000 Revolving Credit Agreement,
dated as of September 26, 1996, among the
registrant, Bank of America National Trust and
Savings Association, as agent, and the several
financial institutions parties thereto.
<PAGE>
PAGE 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCI COMMUNICATIONS CORPORATION
/s/ Jonelle St. John
------------------------------
Jonelle St. John
Vice President and Treasurer
Date: October 3, 1996
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -------------------------------------
4 (a) Form of Senior Fixed Rate Medium-Term Note.
4 (b) Form of Senior Floating Rate Medium-Term Note.
10 $2,000,000,000 Revolving Credit Agreement,
dated as of September 26, 1996, among the
registrant, Bank of America National Trust and
Savings Association, as agent, and the several
financial institutions parties thereto.
EXHIBIT 4(a)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR ONE OR MORE NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK (THE
"DEPOSITARY"), TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OF
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND UNLESS ANY NOTE ISSUED UPON SUCH TRANSFER OR EXCHANGE IS REGISTERED
IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
REGISTERED REGISTERED
No. SR-FXR CURRENCY/PRINCIPAL AMOUNT
CUSIP No.
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE:
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION PERCENTAGE:
PERCENTAGE REDUCTION:
REPAYMENT DATE(S): INTEREST PAYMENT DATE: REGULAR RECORD DATE:
o SEE ADDENDUM FOR ADDITIONAL OR OTHER PROVISIONS
-1-
<PAGE>
MCI COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"),
for value received, hereby promises to pay to
, or registered assigns, the principal sum of
on the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon at the
Interest Rate per annum specified above, semiannually on June 1 and December 1,
unless otherwise specified above (each an "Interest Payment Date") in each year
commencing on the first Interest Payment Date next succeeding the Original Issue
Date specified above, unless the Original Issue Date occurs between a Regular
Record Date (as defined below) and the next succeeding Interest Payment Date, in
which case commencing on the second Interest Payment Date succeeding the
Original Issue Date, to the Holder of this Note as of the close of business on
the Regular Record Date with respect to such Interest Payment Date, and on the
Stated Maturity Date (or any earlier date of redemption or repayment) (the
Stated Maturity Date or date of earlier redemption or repayment is referred to
herein as the "Maturity Date" with respect to the principal repayable on such
date), until the principal hereof and premium, if any, hereon is paid or duly
made available for payment. Interest payable on this Note on any Interest
Payment Date or the Maturity Date will include interest accrued from and
including the most recent Interest Payment Date to which interest has been paid
or duly made available for payment or, if no interest has been paid or duly made
available for payment, from the Original Issue Date to but excluding such
Interest Payment Date or Maturity Date, as the case may be. If the Maturity Date
or an Interest Payment Date falls on a day which is not a Business Day (as
defined below), the required payment of principal, premium, if any, and interest
due on the Maturity Date or Interest Payment Date will be paid on the next
succeeding Business Day with the same force and effect as if made on the
Maturity Date or Interest Payment Date, as the case may be, and no interest on
such payment shall accrue for the period from and after the Maturity Date or
Interest Payment Date to the next succeeding Business Day. Interest hereon will
be computed and paid on the basis of a 360-day year of twelve 30-day months. The
interest so payable, and punctually paid or duly made available for payment, on
any Interest Payment Date will, subject to certain exceptions, be paid to the
Holder in whose name this Note (or one or more predecessor Senior Medium-Term
Notes, as defined on the reverse hereof) is registered as of the close of
business on the "Regular Record Date" for such interest, which shall be the May
15 or November 15 immediately preceding the June 1 or December 1 Interest
Payment Date, unless otherwise specified above (whether or not a Business Day);
provided, however, that interest payable on the Maturity Date will be payable to
the person to whom the principal hereof shall be payable. As used herein,
"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions are authorized or required
by law or executive order to close in The City of New York; provided, however,
that, if any payment hereon is to be made in a currency or composite currency
other than United States dollars, such day is also not a day on which banking
institutions are authorized or required by law or executive order to close in
the Principal Financial Center of the country issuing such currency or composite
currency (or, in the case of the European Currency Units ("ECU"), is not a day
that appears as an ECU non-settlement day on the display designated as "ISDE" on
the Reuter Monitor Money Rates Service (or a day so designated by the ECU
Banking Association) or, if ECU non-settlement days do not appear on that page
(and are not so designated), is not a day on which payments in ECU cannot be
settled in the international interbank market). "Principal Financial Center"
means the capital city of the country issuing the currency or composite currency
in which any payment in respect of this Note is to be made, except that with
respect to the United States dollars, Deutsche Marks, Dutch Guilders, Italian
Lire, Swiss Francs and ECU, the Principal Financial Center shall be The City of
New York, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
Payment of the principal of, and premium, if any, and interest on, this
Note on the Maturity Date will be made in immediately available funds against
presentation of this Note at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York. Payment of
interest on any Interest Payment Date other than the Maturity Date may be made
at the option of the Company by check mailed to the address of the Holder
entitled thereto at such address as shall appear in the Security Register;
provided, however, that any Holder of $10,000,000 (or the equivalent thereof in
foreign or composite currencies) or more in aggregate principal amount of Senior
Medium-Term Notes (whether having identical or different terms and provisions)
shall be entitled to receive payments of interest (other than interest due on
the Maturity Date) by wire transfer of immediately available funds if
appropriate written wire transfer instructions have been received by the Trustee
under the Senior Indenture, as defined on the reverse hereof, at its corporate
trust office in The City of New York on or prior to the Regular Record Date
immediately preceding the applicable Interest Payment Date.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by
the Trustee under the Senior Indenture, directly or through an Authenticating
Agent, by the manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Senior Indenture or be valid or
obligatory for any purpose.
-2-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
Dated: MCI COMMUNICATIONS CORPORATION
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities issued under
the within-mentioned Senior Indenture. Vice President
CITIBANK N.A., as Trustee
By:
Attest:
Authorized Signatory Secretary
-3-
<PAGE>
This Note is one of a duly authorized series of Senior Securities (the
"Securities") of the Company issued and to be issued under an Indenture dated as
of February 17, 1995, as supplemented by Supplement No. 1, dated October 4,
1996 (collectively, called the "Senior Indenture"), between the
Company and Citibank, N.A., as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Senior Indenture), to which Senior
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Company, the Trustee and
the Holders of the Securities and the terms upon which the Securities are, and
are to be, authenticated and delivered. This Note is part of the series of
Securities designated as "Senior Medium-Term Notes".
The Senior Medium-Term Notes will not be subject to any sinking fund.
This Note may be redeemed by the Company on any date on or after the
Initial Redemption Date, if any, specified on the face hereof. If no Initial
Redemption Date is specified on the face hereof, this Note may not be redeemed
prior to the Stated Maturity Date. On and after the Initial Redemption Date, if
any, this Note may be redeemed at any time in whole or from time to time in part
in increments of $1,000 (provided that any remaining principal hereof shall be
at least $1,000) at the option of the Company at the applicable Redemption Price
(as defined below), together with interest thereon payable to the date fixed for
redemption, on notice given not more than 60 nor less than 30 days prior to the
date fixed for redemption. In the event of redemption of this Note in part only,
a new Note for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof of the principal amount of this Note to be redeemed
and shall decline at each anniversary of the Initial Redemption Date, if any,
specified on the face hereof, by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal amount to be redeemed until
the Redemption Price is 100% of such principal amount.
This Note may be subject to repayment at the option of the Holder hereof on
the Repayment Date(s), if any, specified on the face hereof. If no such date is
specified on the face hereof, this Note may not be so repaid at the option of
the Holder hereof prior to the Stated Maturity Date. On each Repayment Date, if
any, this Note shall be repayable, in whole or in part, in increments of $1,000
(provided that any remaining principal hereof shall be at least $1,000) at the
option of the Holder hereof at a repayment price equal to 100% of the principal
amount to be repaid, together with interest thereon payable to the Repayment
Date. For this Note to be repaid in whole or in part at the option of the Holder
hereof, this Note must be received not more than 60 nor less than 30 days prior
to the Repayment Date, with the form entitled "Option to Elect Repayment" below
duly executed and completed, by the Trustee at its Corporate Trust Office, or
such other address of which the Trustee shall from time to time notify the
Holders of Senior Medium-Term Notes. Exercise of such repayment option by the
Holder hereof shall be irrevocable.
If an Event of Default with respect to the Senior Medium-Term Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Senior Medium-Term Notes at the time
Outstanding, as defined in the Senior Indenture, may declare the principal of
all the Senior Medium-Term Notes due and payable in the manner and with the
effect provided in the Senior Indenture.
The Senior Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The Senior
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of each series,
to waive compliance by the Company with certain provisions of the Senior
Indenture and certain past defaults under the Senior Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.
No reference herein to the Senior Indenture and no provision of this Note
or of the Senior Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and premium, if
any, and interest on, this Note at the time, place, and rate, and in the coin or
currency, herein prescribed.
The Senior Medium-Term Notes are issuable only in registered form without
coupons in denominations of $1,000 or integral multiples thereof.
As provided in the Senior Indenture, and subject to certain limitations
herein and therein set forth, the transfer of this Note may be registered on the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and this Note duly executed by, the
Holder hereof or by his attorney duly authorized in writing and thereupon one or
more new Senior Medium-Term Notes, in authorized denominations, having the same
terms and conditions and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
As provided in the Senior Indenture, and subject to certain limitations
herein and therein set forth, the Senior Medium-Term Notes are exchangeable for
a like aggregate principal amount of Senior Medium-Term Notes of the same rank
and tenor in authorized denominations, as requested by the Holder surrendering
the same.
No service charge will be made for such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
-4-
<PAGE>
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and the Company, the Trustee and
any such agent shall not be affected by notice to the contrary.
The Senior Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
All capitalized terms used in this Note and not otherwise defined or
specified herein shall have the meanings assigned to them in the Senior
Indenture.
-5-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
UNIF GIFT MIN ACT-_______________________________ Custodian _________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN COM-as tenants in common
TEN ENT-as tenants by the entireties
JT TEN-as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the
ab__________________________
-6-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfers)
unto
Please Insert Social Security or Other Identifying Number of Assignee:
- -----------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE:
the within Note and all rights hereunder, hereby irrevocably constituting and
appointing ________________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
Dated: __________________________
NOTICE: The
signature to this
assignment must
correspond with
the name as
written upon the
face of this Note
in every
particular,
without alteration
or enlargement or
any change
whatever.
-7-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to the principal amount hereof, together with interest to the date
of repayment, to
---------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Trustee must receive at 111 Wall Street, New
York, New York, Corporate Trust Services, 5th Floor, or at such other place or
places of which the Trustee shall from time to time notify the Holder of this
Note, not more than 60 nor less than 30 days prior to a Repayment Date (or, if
either such day is not a Business Day, the next succeeding Business Day), if
any, shown on the face of this Note, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be an increment of $1,000) which the
Holder elects to have repaid: $__________, and specify the denomination or
denominations (which shall be $1,000 or an integral multiple thereof) of the
Senior Medium-Term Notes to be issued to the Holder for the portion of this Note
not being repaid (in the absence of any such specification, one such Note will
be issued for the portion not being repaid): $
Dated:________________
------------------------------------------
NOTICE: The signature on
this Option to Elect
Repayment must correspond
with the name as written
upon the face of this Note
in every particular,
without alteration or
enlargement or any change
whatever.
-8-
EXHIBIT 4(b)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR ONE OR MORE NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK (THE
"DEPOSITARY"), TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OF
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND UNLESS ANY NOTE ISSUED UPON SUCH TRANSFER OR EXCHANGE IS REGISTERED
IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSI TARY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
REGISTERED REGISTERED
No. SR-FLR CURRRENCY/PRINCIPAL AMOUNT
CUSIP No.
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Floating Rate)
ORIGINAL ISSUE DATE:
INTEREST RATE BASIS(ES): STATED MATURITY DATE:
IF LIBOR: CALCULATION AGENT:
o LIBOR TELERATE OR o LIBOR REUTERS
INTEREST PAYMENT DATES:
INDEX CURRENCY: INITIAL INTEREST RESET DATE:
DESIGNATED LIBOR PAGE: INITIAL INTEREST RATE:
IF CMT RATE: SPREAD:
CMT MATURITY INDEX: SPREAD MULTIPLIER:
DESIGNATED CMT TELERATE PAGE: INTEREST RESET DATES:
INDEX MATURITY: FIXED RATE COMMENCEMENT DATE:
MAXIMUM INTEREST RATE: FIXED INTEREST RATE:
MINIMUM INTEREST RATE: REPAYMENT DATE(S):
INITIAL REDEMPTION PERCENTAGE: INITIAL REDEMPTION DATE:
ANNUAL REDEMPTION PERCENTAGE REDUCTION:
o SEE ADDENDUM FOR ADDITIONAL OR OTHER PROVISIONS
<PAGE>
MCI COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"),
for value received, hereby promises to pay to
, or registered assigns, the principal sum of
on the Stated Maturity Date specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date) and to pay interest thereon at a rate
per annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions on the reverse hereof, depending upon the
Interest Rate Basis or Bases specified above, until the principal hereof and
premium, if any, hereon is paid or duly made available for payment. The Company
will pay interest on each Interest Payment Date specified above, commencing with
the first Interest Payment Date next succeeding the Original Issue Date
specified above, and on the Stated Maturity Date (or any earlier date of
redemption or repayment) (the Stated Maturity Date or date of earlier redemption
or repayment is referred to herein as the "Maturity Date" with respect to the
principal repayable on such date); provided, however, that if the Original Issue
Date occurs between a Regular Record Date (as defined below) and an Interest
Payment Date, interest payments will commence on the Interest Payment Date
following the next succeeding Regular Record Date and be payable to the person
that is the Holder as of such next succeeding Regular Record Date; and provided,
further, that if an Interest Payment Date other than the Maturity Date would
fall on a day that is not a Business Day (as defined on the reverse hereof),
such Interest Payment Date shall be the next succeeding Business Day, except
that in case the Interest Rate Basis is LIBID or LIBOR, if such next succeeding
Business Day falls in the next calendar month, such Interest Payment Date will
be the immediately preceding Business Day. If the Maturity Date would fall on a
day that is not a Business Day, the required payment of principal, premium, if
any, and interest shall be made on the next succeeding Business Day, and no
interest on such payment shall accrue for the period from and after the Maturity
Date to such next succeeding Business Day.
Interest payable on this Note on any Interest Payment Date or Maturity Date
will include interest accrued from and including the Original Issue Date, or the
most recent date in respect of which interest has been paid or duly made
available for payment, to but excluding such Interest Payment Date or Maturity
Date, as the case may be. Accrued interest hereon shall be an amount calculated
by multiplying the principal amount hereof by an accrued interest factor. Such
accrued interest factor shall be computed by adding the interest factor
calculated for each day in the period for which accrued interest is being
calculated. The interest factor for each such day shall be computed by dividing
the interest rate applicable to such day by 360 if the applicable Interest Rate
Basis is the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBID,
LIBOR or the Prime Rate, or by the actual number of days in the year if the
applicable Interest Rate Basis is the CMT Rate or the Treasury Rate.
The interest so payable, and punctually paid or duly made available for
payment, on any Interest Payment Date will, subject to certain exceptions, be
paid to the Holder in whose name this Note (or one or more predecessor Senior
Medium-Term Notes, as defined on the reverse hereof) is registered at the close
of business on the date 15 calendar days prior to such Interest Payment Date
(whether or not a Business Day) (the "Regular Record Date"); provided, however,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof shall be payable.
Payment of the principal of, and premium, if any, and interest on, this Note
on the Maturity Date will be made in immediately available funds against
presentation of this Note at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York. Payment of
interest on any Interest Payment Date other than the Maturity Date may be made
at the option of the Company by check mailed to the address of the Holder
entitled thereto as such address shall appear in the Security Register;
provided, however, that any Holder of $10,000,000 (or the equivalent thereof in
foreign or composite currencies) or more in aggregate principal amount of Senior
Medium-Term Notes (whether having identical or different terms and provisions)
shall be entitled to receive payments of interest (other than interest due on
the Maturity Date) by wire transfer of immediately available funds if
appropriate written wire transfer instructions have been received by the Trustee
under the Senior Indenture, as defined on the reverse hereof, at its corporate
trust office in The City of New York on or prior to the Regular Record Date
immediately preceding the applicable Interest Payment Date.
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Senior Indenture, directly or through an Authenticating Agent,
by the manual signature of one of its authorized signatories, this Note shall
not be entitled to any benefit under the Senior Indenture or be valid or
obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
Dated: MCI COMMUNICATIONS CORPORATION
By:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION:
This is one of the Securities
issued under the within-men-
tioned Senior Indenture.
Vice President
CITIBANK, N.A., as Trustee By:
Attest:
Authorized Signatory Secretary
<PAGE>
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Floating Rate)
This Note is one of a duly authorized series of Securities (the "Securities")
of the Company issued and to be issued under an Indenture, dated as of February
17, 1995, as supplemented by Supplement No. 1, dated October 4, 1996
(collectively called the "Senior Indenture"), between the Company and
Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Senior Indenture), to which Senior Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of the
Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. This Note is part of the series of Securities
designated as "Senior Medium-Term Notes".
The Senior Medium-Term Notes will not be subject to any sinking fund.
This Note may be redeemed by the Company on any date on or after the Initial
Redemption Date, if any, specified on the face hereof. If no Initial Redemption
Date is specified on the face hereof, this Note may not be redeemed prior to the
Stated Maturity Date. On and after the Initial Redemption Date, if any, this
Note may be redeemed at any time in whole or from time to time in part in
increments of $1,000 (provided that any remaining principal amount hereof shall
be at least $1,000) at the option of the Company at the applicable Redemption
Price (as defined below), together with interest thereon payable to the date
fixed for redemption, on notice given not more than 60 nor less than 30 days
prior to the date fixed for redemption. In the event of redemption of this Note
in part only, a new Note for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption Percentage,
specified on the face hereof, of the principal amount of this Note to be
redeemed and shall decline at each anniversary of the Initial Redemption Date,
if any, specified on the face hereof, by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof, of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount.
This Note may be subject to repayment at the option of the Holder hereof on
the Repayment Date(s), if any, specified on the face hereof. If no such date is
specified on the face hereof, this Note may not be so repaid at the option of
the Holder hereof prior to the Stated Maturity Date. On each Repayment Date, if
any, this Note shall be repayable, in whole or in part, in increments of $1,000
(provided that any remaining principal amount hereof shall be at least $1,000)
at the option of the Holder hereof at a repayment price equal to 100% of the
principal amount to be repaid, together with interest thereon payable to the
date of repayment. For this Note to be repaid in whole or in part at the option
of the Holder hereof, this Note must be received not more than 60 nor less than
30 days prior to the Repayment Date, with the form entitled "Option to Elect
Repayment" below duly executed and completed, by the Trustee at its Corporate
Trust Office, or such other address of which the Trustee shall from time to time
notify the Holders of Senior Medium-Term Notes. Exercise of such repayment
option by the Holder hereof shall be irrevocable.
This Note will bear interest at the rate determined by reference to one or
more Interest Rate Bases specified on the face hereof (i) plus or minus the
Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if any,
specified on the face hereof. The Interest Rate Basis or Bases shall be the rate
or rates determined in accordance with the applicable provision below.
Commencing on the Initial Interest Reset Date, the rate at which interest on
this Note accrues shall be reset as of each Interest Reset Date specified on the
face hereof; provided, however, that (x) the interest rate in effect for the
period from the Original Issue Date to the Initial Interest Reset Date will be
the Initial Interest Rate, (y) if a Fixed Rate Commencement Date is specified on
the face hereof, the interest rate in effect for the period from the Fixed Rate
Commencement Date to the Maturity Date shall be the Fixed Interest Rate, if such
rate is specified on the face hereof, or, if no such Fixed Interest Rate is so
specified, the interest rate in effect thereon on the day immediately preceding
the Fixed Rate Commencement Date and (z) the interest rate hereon will not be
less than zero.
Except as set forth in the preceding paragraph, the interest rate in effect
on each day shall be (a) if such day is an Interest Reset Date, the interest
rate determined as of the Interest Determination Date (as defined below)
immediately preceding such Interest Reset Date or (b) if such day is not an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date. If
any Interest Reset Date would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding Business Day,
except that if the Interest Rate Basis specified on the face hereof is LIBOR or
LIBID, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.
The "Interest Determination Date" with respect to the CD Rate, the Commercial
Paper Rate, the Federal Funds Rate, the CMT Rate and the Prime Rate shall be the
second Business Day immediately preceding the applicable Interest Reset Date.
The "Interest Determination Date" with respect to LIBID and LIBOR shall be the
second London Banking Day (as defined below) immediately preceding the
applicable Interest Reset Date, unless the Index Currency is British pounds
Sterling, in which case the "Interest Determination Date" will be the applicable
Interest Reset Date. The "Interest Determination Date" with respect to the
Treasury Rate shall be the day of the week on which the applicable Interest
Reset Date falls on which Treasury bills normally would be auctioned; provided,
however, that if as a result of a legal holiday an auction is held on the Friday
of the week preceding an Interest Reset Date, the related Interest Determination
Date shall be such preceding Friday; and provided, further, that if an auction
shall fall on the applicable Interest Reset Date, then the Interest Reset Date
shall instead be the first Business Day following such auction. If the interest
rate of this Note is determined with reference to two or more Interest Rate
Bases, the "Interest Determination Date" will be the most recent Business Day
which is at least two Business Days prior to the applicable Interest Reset Date
on which each Interest Rate Basis shall be determinable. Each Interest Rate
Basis shall be determined and compared on such date, and the applicable interest
rate shall take effect on the related Interest Reset Date.
The "Calculation Date", where applicable, pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after such
Interest Determination Date, or, if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
Interest Payment Date or the Maturity Date next succeeding such Interest
Determination Date.
All percentages resulting from any calculation on this Note will be rounded,
if necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward, and all dollar amounts
used in or resulting from such calculation on this Note will be rounded to the
nearest cent (with one-half cent being rounded upward).
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or executive order to close in The City of New
York; provided, however, if any payment hereon is to be made in a currency or
composite currency
<PAGE>
other than United States dollars, such day is also not a day on which banking
institutions are authorized or required by law or executive order to close in
the Principal Financial Center (as defined below) of the country issuing such
currency or composite currency (or, in the case of the European Currency Unit
("ECU"), is not a day that appears as an ECU non-settlement day on the display
designated as "ISDE" on the Reuter Monitor Money Rates Service (or a day so
designated by the ECU Banking Association) or, if ECU non-settlement days do not
appear on that page (and are not so designated), is not a day on which payments
in ECU cannot be settled in the international interbank market); provided,
further, that if LIBOR or LIBID is an applicable Interest Rate Basis, such day
is also a London Banking Day.
"London Banking Day" means any day (i) if the Index Currency specified on the
face hereof is other than ECU, on which dealings in such Index Currency are
transacted in the London interbank market or (ii) if the Index Currency is ECU,
that is not designated as an ECU non-settlement day on the display designated as
"ISDE" on the Reuter Monitor Money Rates Service (or a day so designated by the
ECU Banking Association) or, if ECU non-settlement days do not appear on that
page (and are not so designated), is not a day on which payments in ECU cannot
be settled in the international interbank market.
"Principal Financial Center" means the capital city of the country issuing
the currency or composite currency in which any payment in respect of this Note
is to be made or, solely with respect to the calculation of LIBOR or LIBID, the
Index Currency, except that with respect to the United States dollars, Deutsche
Marks, Dutch Guilders, Italian Lire, Swiss Francs and ECU, the Principal
Financial Center shall be The City of New York, Frankfurt, Amsterdam, Milan,
Zurich and Luxembourg, respectively.
Determination of Commercial Paper Rate. The Commercial Paper Rate means, with
respect to any Interest Determination Date (a "Commercial Paper Rate Interest
Determination Date"), the Money Market Yield (calculated as defined below) on
such date for commercial paper having the Index Maturity specified on the face
hereof as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519) Selected Interest Rates", or any successor
publication ("H.15(519)"), under the heading "Commercial Paper". In the event
such rate is not published by 3:00 P.M., New York City time, on the Calculation
Date pertaining to such Commercial Paper Rate Interest Determination Date, then
the Commercial Paper Rate shall be the Money Market Yield on such Commercial
Paper Rate Interest Determination Date of the rate for commercial paper having
the Index Maturity shown on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Commercial Paper". If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, then the Commercial Paper Rate shall be the Money Market Yield of
the arithmetic mean of the offered rates as of 11:00 A.M., New York City time,
on such Commercial Paper Rate Interest Determination Date of three leading
dealers of commercial paper in The City of New York (which may include the
Agents or their Affiliates) selected by the Calculation Agent (after
consultation with the Company) for commercial paper of the Index Maturity
specified on the face hereof placed for an industrial issuer whose bond rating
from Standard & Poor's Corporation, Moody's Investors Service, Inc., Duff &
Phelps Credit Rating Co. or another nationally recognized rating agency is the
second highest investment grade bond rating given by such agency ("AA," "Aa" or
the equivalent); provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial Paper Rate Interest
Determination Date will be the Commercial Paper Rate then in effect on such
Commercial Paper Rate Interest Determination Date.
"Money Market Yield" shall be the yield (expressed as a percentage) calculated
in accordance with the following formula
D x 360
Money Market Yield = --------- x 100
360 - (DxM)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. The "Federal Funds Rate" means, with
respect to any Interest Determination Date (a "Federal Funds Rate Interest
Determination Date"), the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)" or, if not so published
by 3:00 P.M., New York City time, on the Calculation Date pertaining to such
Federal Funds Rate Interest Determination Date, the Federal Funds Rate will be
the rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the Federal Funds Rate will
be calculated by the Calculation Agent and will be the arithmetic mean of the
rate for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent (after
consultation with the Company) as of 11:00 A.M., New York City time, on such
Federal Funds Rate Interest Determination Date; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
described above, the Federal Funds Rate in effect for such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate then in effect on
such Federal Funds Rate Interest Determination Date.
Determination of CD Rate. The "CD Rate" means, with respect to any Interest
Determination Date (a "CD Rate Interest Determination Date"), the rate on such
date for negotiable certificates of deposit having the Index Maturity specified
on the face hereof as published in H.15(519) under the heading "CDs (Secondary
Market)," or if not so published by 3:00 P.M., New York City time, on or prior
to the Calculation Date, the CD Rate will be the rate on such CD Rate Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified on the face hereof as published in Composite Quotations under the
heading "Certificates of Deposit." If such rate is not yet published in either
H.15(519) or the Composite Quotations by 3:00 P.M., New York City time, on or
prior to such Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the secondary market offered rates as of 3:00 P.M., New York
City time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in The City of New
York selected by the Calculation Agent (after consultation with the Company) for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing in the market for negotiable certificates of deposit
with a remaining maturity closest to the Index Maturity specified on the face
hereof in denominations of $5,000,000; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate will be the CD Rate then in effect on such CD Rate
Interest Determination Date.
<PAGE>
Determination of LIBOR. "LIBOR" means, with respect to any Interest Rate
Determination Date (a "LIBOR Interest Determination Date"), the rate determined
by the Calculation Agent in accordance with the following provisions:
(i) LIBOR will be either: (a) if "LIBOR Reuters" is specified on the face
hereof, the arithmetic mean of the offered rates (unless the Designated LIBOR
Page by its terms provides only for a single rate, in which case such single
rate shall be used) for deposits in the Index Currency having the Index Maturity
specified on the face hereof, commencing on the applicable Interest Reset Date,
that appear on the Designated LIBOR Page as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date, if at least two such offered rates appear
(unless, as aforesaid, only a single rate is required) on such Designated LIBOR
Page, or (b) if "LIBOR Telerate" is specified on the face hereof or if neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as the
method for calculating LIBOR, the rate for deposits in the Index Currency having
the Index Maturity specified on the face hereof commencing on such Interest
Reset Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date. If fewer than two such offered
rates appear, or if no such rate appears, as applicable, LIBOR for such LIBOR
Interest Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as applicable, for the Index
Maturity specified on the face hereof on the applicable Designated LIBOR Page,
the appropriate Calculation Agent will request the principal London offices of
each of four major reference banks in the London interbank market to provide
such Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. If at least two such quotations
are provided, LIBOR will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR in respect to the applicable Interest
Reset Date will be the arithmetic mean of the rates quoted by three major banks
in the Principal Financial Center selected by the appropriate Calculation Agent
(after consultation with the Company) at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest Determination Date
for loans in such Index Currency to leading European banks, having the Index
Maturity specified on the face hereof and in the principal amount that is
representative for a single transaction in such Index Currency in such market at
such time; provided, however, that if banks selected as aforesaid by such
Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the rate of interest in
effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified on the
face hereof with respect to which LIBOR shall be calculated. If no such currency
or composite currency is specified on the face hereof, the Index Currency shall
be United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on the face
hereof, the display on the Reuter Monitor Money Rates Service (or any successor
service) for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency, or (b) if "LIBOR Telerate" is specified on
the face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on
the face hereof as the method for calculating LIBOR, the display on the Dow
Jones Telerate Service (or any successor service) for the purpose of displaying
the London interbank rates of major banks for the applicable Index Currency.
Determination of LIBID. "LIBID" means, with respect to any Interest
Determination Date (a "LIBID Interest Determination Date"), the rate determined
by the Calculation Agent in accordance with the following provisions:
(i) LIBID will be determined on the basis of the bid rates quoted to prime
banks in the London interbank market at approximately 11:00 A.M., London time,
for deposits in United States dollars of not less than U.S. $1 million that is
representative for a single transaction in such market at such time for the
period of the Index Maturity specified on the face hereof commencing on the
second London Banking Day immediately following such LIBID Interest
Determination Date, by the London offices of four major banks in the London
interbank market named on the Reuters Screen LIBO Page and selected by the
Calculation Agent (after consultation with the Company) (the "LIBID Reference
Banks") on the LIBID Interest Determination Date. If at least two such
quotations appear on the Reuters Screen LIBO Page, LIBID for such LIBID Interest
Determination Date will be the arithmetic mean of such quotations as determined
by the Calculation Agent. If fewer than two quotations are provided, LIBID for
such LIBID Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below. "Reuters Screen LIBO Page" means the
display designated as Page - LIBO on the Reuter Monitor Money Rates Services (or
such other page as may replace the LIBO Page on that service for the purpose of
displaying the London interbank offered rates of major banks).
(ii) With respect to a LIBID Interest Determination Date on which fewer than
two such quotations are provided, the Calculation Agent will request each of the
LIBID Reference Banks to provide the Calculation Agent with a quotation of the
bid rate quoted to such bank by the head offices of leading New York City banks
for deposits in United States dollars for the period of the Index Maturity at
approximately 11:00 A.M., London time, on such LIBID Interest Determination Date
and in a principal amount equal to an amount of not less than U.S. $1 million
that is representative for a single transaction in such market at such time. If
at least two such quotations are provided, LIBID will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, LIBID in respect of
that Interest Reset Date will be the arithmetic mean of the rates quoted by
three major banks in The City of New York selected by the Calculation Agent
(after consultation with the Company), at approximately 11:00 A.M., New York
City time, on that Interest Determination Date for loans in U.S. dollars to
leading European banks, having the Index Maturity designated on the face hereof
and in the principal amount equal to an amount of not less than U.S. $1 million
that is representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the rate of interest in effect on such
LIBID Interest Determination Date.
Determination of Treasury Rate. "Treasury Rate" means, with respect to any
Interest Determination Date (a "Treasury Rate Interest Determination Date"), the
rate from the auction held on such Treasury Rate Interest Determination Date
(the "Auction") of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as such rate is published
in H.15(519) under the heading "U.S. Government Securities-Treasury Bills -
Auction Average (Investment)" or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Treasury Rate Interest
Determination Date, the applicable auction average rate of such Treasury bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) at such auction as otherwise announced
by the United States Department of the Treasury. In the event that the results
of the Auction of Treasury bills having the Index Maturity specified on the face
hereof are not reported as provided by 3:00 P.M., New York City time, on such
Calculation Date, or if no such Auction is held, then the rate of interest
hereon shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers (which may include the Agents
<PAGE>
or their affiliates) selected by the Calculation Agent (after consultation with
the Company) for the issue of Treasury bills with a remaining maturity closest
to the Index Maturity specified on the face hereof; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate with respect to such Treasury Rate
Interest Determination Date will be the rate then in effect on such Treasury
Rate Interest Determination Date.
Determination of Prime Rate. "Prime Rate" means, with respect to any Interest
Determination Date (a "Prime Rate Interest Determination Date"), the arithmetic
mean of the prime rates quoted on the basis of the actual number of days in the
year divided by 360 as of the close of business on such Prime Rate Interest
Determination Date by three major money center banks in The City of New York as
selected by the Calculation Agent (after consultation with the Company). If
fewer than three such quotations are provided, the Prime Rate shall be
calculated by the Calculation Agent and shall be determined as the arithmetic
mean on the basis of the prime rates quoted in The City of New York on such date
by such of the three major money center banks as are quoting prime rates and the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any state thereof, having total
equity capital of at least $500 million and being subject to supervision or
examination by Federal or state authority, selected by the Calculation Agent
(after consultation with the Company) to quote such rate or rates; provided,
however, that if the banks or trust companies selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
with respect to such Prime Rate Interest Determination Date will be the rate
then in effect on such Prime Rate Interest Determination Date.
Determination of CMT Rate. The "CMT Rate" means, with respect to any Interest
Determination Date (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page under the caption ". . . Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index
for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the week, or the month, as applicable, ended immediately preceding the
week in which the related CMT Rate Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page, or if not displayed by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate for
such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index as published in the relevant
H.15(519). If such rate is no longer published, or if not published by 3:00
P.M., New York City time, on the Calculation Date, then the CMT Rate for such
CMT Rate Interest Determination Date will be such treasury constant maturity
rate for the Designated CMT Maturity Index (or other United States Treasury rate
for the Designated CMT Maturity Index) for the CMT Rate Interest Determination
Date with respect to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the appropriate Calculation Agent determines to
be comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 P.M.,
New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York (which may include the Agents or their affiliates) selected by the
appropriate Calculation Agent (from five such Reference Dealers selected by such
Calculation Agent (after consultation with the Company) and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the appropriate
Calculation Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such CMT Rate Interest Determination Date will be calculated by such
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on the CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
such Calculation Agent (after consultation with the Company) and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)) for Treasury
Notes with an original maturity of the number of years that is the next highest
to the Designated CMT Maturity Index and a remaining term to maturity closest to
the Designated CMT Maturity Index and in an amount of at least $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers
selected by the Calculation Agent as aforesaid are quoting as described herein,
the CMT Rate in effect for the applicable period will be the rate of interest in
effect on such CMT Rate Interest Determination Date. If two Treasury Notes with
an original maturity as described in the second preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
will be used.
"Designated CMT Telerate Page" mans the display on the Dow Jones Telerate
Service specified on the face hereof (or any other page as may replace such page
on that service for the purposes of displaying Treasury Constant Maturities as
reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is so specified, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified on the face hereof. The interest rate on this Note will in no
event be higher than the maximum rate permitted by New York law, as the same may
be modified by United States law of general application.
The Calculation Agent shall calculate the interest rate hereon in accordance
with the foregoing provisions on or before each Calculation Date. At the request
of the Holder hereof, the Calculation Agent will provide to the Holder hereof
the interest rate hereon then in effect and, if determined, the interest rate
which will become effective as of the next Interest Reset Date.
If an Event of Default with respect to the Senior Medium-Term Notes shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Senior Medium-Term Notes at the time
Outstanding, as defined in the Senior Indenture, may declare the principal of
all the Senior Medium-Term Notes due and payable in the manner and with the
effect provided in the Senior Indenture.
The Senior Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in principal amount of the Securities at the
time Outstanding of each series affected thereby. The Senior Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of each series, to waive compliance by
the Company with certain provisions of the Senior Indenture and certain past
defaults under the Senior Indenture and their consequences.
<PAGE>
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent of waiver is made upon
this Note.
No reference herein to the Senior Indenture and no provision of this Note or
of the Senior Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and premium, if
any, and interest on, this Note at the time, place, and rate, and in the coin or
currency, herein prescribed.
The Senior Medium-Term Notes are issuable only in registered form without
coupons in minimum denominations of $1,000 or integral multiples thereof.
As provided in the Senior Indenture, and subject to certain limitations
herein and therein set forth, the transfer of this Note may be registered on the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and this Note duly executed by, the
Holder hereof or by his attorney duly authorized in writing and thereupon one or
more new Senior Medium-Term Notes in authorized denominations, having the same
terms and conditions, and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
As provided in the Senior Indenture, and subject to certain limitations
therein set forth, the Senior Medium-Term Notes are exchangeable for a like
aggregate principal amount of Senior Medium-Term Notes of the same rank and
tenor in authorized denominations, as requested by the Holder surrendering the
same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and the Company, the Trustee and
any such agent shall not be affected by notice to the contrary.
The Senior Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
All capitalized terms used in this Note and not otherwise defined or
specified herein shall have the meanings assigned to them in the Senior
Indenture.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations.
UNIF GIFT MIN ACT- Custodian
(Cust) (Minor)
Under Uniform Gifts to Minors Act
(State)
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other Identifying Number of Assignee:
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE:
the within Note and all rights hereunder, hereby irrevocably constituting and
appointing _________________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
Dated:
NOTICE: The
signature to this
assignment must
correspond with the
name as written
upon the face of
this Note in every
particular, without
alteration or
enlargement or any
change whatever.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company to
repay this Note (or portion hereof specified below) pursuant to its terms at a
price equal to the principal amount hereof, together with interest to the date
of repayment, to
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Trustee must receive at 111 Wall Street, New
York, New York, Corporate Trust Services, 5th Floor, or at such other place or
places of which the Trustee shall from time to time notify the Holder of this
Note, not more than 60 nor less than 30 days prior to a Repayment Date (or, if
either such day is not a Business Day, the next succeeding Business Day), if
any, shown on the face of this Note, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be an increment of $1,000) which the
Holder elects to have repaid: $ , and specify the denomination or denominations
(which shall be $1,000 or an integral multiple thereof of the Senior Medium-Term
Notes to be issued to the Holder for the portion of this Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid): $
Dated:
NOTICE: The
signature on this
Option to Elect
Repayment must
correspond with the
name as written
upon the face of
this Note in every
particular, without
alteration or
enlargement or any
change whatever.
EXHIBIT 10
EXECUTION COPY
$2,000,000,000
REVOLVING CREDIT AGREEMENT
dated as of September 26, 1996
Among
MCI COMMUNICATIONS CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Competitive Bid Agent
and Operating Agent,
THE BANK OF NOVA SCOTIA,
THE CHASE MANHATTAN BANK,
CITIBANK, N.A.,
MELLON BANK, N.A.,
and
NATIONSBANK OF TEXAS, N.A.,
as Co-Agents,
THE SEVERAL FINANCIAL INSTITUTIONS
PARTIES HERETO
and
BA SECURITIES, INC.,
as Syndication Agent
<PAGE>
TABLE OF CONTENTS
Section
Page
ARTICLE I
DEFINITIONS
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..................................... 22
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....................................................... 25
2.11 Interest.............................................................. 25
(a) Interest on Pro Rata Advances.......................................... 25
(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................................ 26
(f) Maximum Interest Rate................................................ 27
2.12 Computation of Interest, Fees and Other
Amounts.................................................................. 27
ii
<PAGE>
Section
Page
2.13 Inability to Determine Interest Rate for Pro
Rata Advances............................................................. 28
2.14 Pro Rata Treatment and Payments........................................ 28
(a) Payments by the Company............................................... 28
(b) Payments by the Banks to the Operating
Agent...................................................................... 29
2.15 Taxes................................................................ 30
2.16 Illegality............................................................ 35
2.17 Requirements of Law.................................................. 36
2.18 Funding Losses....................................................... 38
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Corporate Existence and Power....................................... 39
3.02 Corporate Authorization; No Contravention............................ 39
3.03 Governmental Authorization.......................................... 40
3.04 Binding Effect........................................................ 40
3.05 No Legal Bar......................................................... 40
3.06 Litigation......................................................... 40
3.07 No Default............................................................. 41
3.08 ERISA Compliance...................................................... 41
3.09 Use of Proceeds; Margin Regulations................................... 42
3.10 Title to Properties.................................................. 42
3.11 Taxes................................................................ 43
3.12 Financial Condition.................................................... 43
3.13 Environmental Matters................................................. 43
3.14 Investment Company Act.............................................. 44
3.15 Communications Act............................................... 44
3.16 Senior Indebtedness............................................... 44
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions to Initial Advances........................................ 44
(a) Credit Agreement and the Notes......................................... 44
(b) Corporate Documents of the Company.................................... 45
(c) By-Laws of the Company................................................. 45
(d) Board Resolutions of the Company....................................... 45
(e) Incumbency Certificate for the Company.................................. 45
(f) Legal Opinion for the Company........................................... 45
(g) Payment of Fees and Expenses............................................ 45
(h) Certificate............................................................. 45
(i) Financial Statements.................................................... 46
(j) MCI Telecom Certificate............................................... 46
(k) Existing Agreement.................................................... 46
(l) Other Documents......................................................... 46
iii
<PAGE>
Section
Page
4.02 Conditions to All Advances......................................... 46
(a) Borrowing Notice..................................................... 46
(b) Continuation of Representations and
Warranties................................................................ 46
(c) No Existing Default.................................................... 46
ARTICLE V
AFFIRMATIVE COVENANTS
5.01 Financial Statements................................................... 47
5.02 Certificates; Other Information....................................... 48
5.03 Preservation of Corporate Existence, etc............................... 48
5.04 Maintenance of Property............................................... 49
5.05 Insurance.............................................................. 49
5.06 Payment of Obligations................................................. 49
5.07 Compliance with Laws.................................................. 50
5.08 Inspection of Property and Books and Records......................... 50
5.09 Hazardous Materials................................................... 50
5.10 Notices................................................................ 51
5.11 Consultation after GAAP Changes........................................ 52
5.12 Maintenance of Telecommunications Business............................. 52
ARTICLE VI
NEGATIVE COVENANTS
6.01 Limitation on Liens.................................................. 53
6.02 Sale or Lease of Assets............................................. 54
6.03 Consolidations and Mergers............................................ 55
6.04 Transactions with Affiliates.......................................... 55
6.05 Compliance with ERISA............................................... 55
6.06 Use of Proceeds....................................................... 56
6.07 Ratio of Total Liabilities to Total
Capitalization............................................................ 57
6.08 MCI Telecom Liabilities.............................................. 57
6.09 No Restriction on Dividends of MCI Telecom........................... 57
ARTICLE VII
EVENTS OF DEFAULT
(a) Non-Payment of Principal.............................................. 57
(b) Non-Payment of Interest and Facility Fee............................... 57
(c) Non-Payment of Other Amounts............................................ 58
(d) Representation or Warranty............................................. 58
(e) Certain Article VI Defaults............................................ 58
(f) Other Covenant Defaults............................................. 58
(g) Other Defaults........................................................ 58
(h) Cross-Default.......................................................... 58
(i) Bankruptcy or Insolvency.............................................. 59
(j) Involuntary Proceedings................................................ 59
(k) ERISA.................................................................. 60
iv
<PAGE>
Section
Page
(l) Monetary Judgments..................................................... 60
(m) Change in Control...................................................... 60
ARTICLE VIII
THE AGENTS AND THE SYNDICATION AGENT
8.01 Appointment of the Agents; Syndication Agent to
Have No Role.............................................................. 61
8.02 Delegation of Duties of the Agents.................................... 62
8.03 Liability of the Agents and the Syndication
Agent...................................................................... 62
8.04 Reliance by the Agents............................................... 62
8.05 Notice of Default..................................................... 63
8.06 Credit Decision...................................................... 63
8.07 Indemnification....................................................... 64
8.08 Bank of America in its Individual or Separate
Capacity.................................................................. 64
8.09 Successor Agents...................................................... 65
8.10 Co-Agents............................................................ 65
ARTICLE IX
MISCELLANEOUS
9.01 Amendments and Waivers............................................... 65
9.02 Notices.............................................................. 66
9.03 No Waiver; Cumulative Remedies........................................ 68
9.04 Costs and Expenses................................................... 68
9.05 Indemnity............................................................. 69
9.06 Successors and Assigns................................................ 69
9.07 Assignments, Participations, etc...................................... 69
9.08 Confidentiality....................................................... 71
9.09 Sharing; Set-off....................................................... 72
9.10 Notification of Addresses, Lending Offices,
etc....................................................................... 73
9.11 Delivery of Documents and Notices..................................... 73
9.12 Counterparts; Effectiveness......................................... 73
9.13 Severability...................................................... 73
9.14 Jurisdiction.......................................................... 73
9.15 Waiver of Trial by Jury.............................................. 74
9.16 Governing Law.......................................................... 74
v
<PAGE>
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
vi
<PAGE>
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of September 26, 1996, 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, THE BANK OF
NOVA SCOTIA, THE CHASE MANHATTAN BANK, CITIBANK, N.A., MELLON BANK, N.A. and
NATIONSBANK OF TEXAS, N.A., as Co-Agents, 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.
1
<PAGE>
"Advances" means Pro Rata Advances and Competitive Bid
Advances.
"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 (10%) 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)).
"Bank of America" means Bank of America National Trust
and Savings Association.
2
<PAGE>
"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 changed 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.
"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).
3
<PAGE>
"Competitive Bid Eurodollar Advance" means a Competitive Bid
Advance that shall bear or bears 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 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.
"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 "$" each mean 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 in the United States as such
Bank may from time to time specify to the Company and the Operating Agent.
"Effective Date" means September 26, 1996.
"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.
"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 in
Dollar deposits 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 or bears 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 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 $2,000,000,000 Revolving
Credit Agreement, dated as of July 8, 1994, as amended from time to time prior
to the date hereof, among the Company, Bank of America, BA Securities, Inc. and
the several financial institutions parties thereto.
"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 thereto.
"Fitch" means Fitch Investors Service, Inc.
"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).
"Hazardous Materials Laws" means the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.ss.9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C.ss.1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C.ss.1251 et seq.), the Clean Air Act (42
U.S.C.ss.1251 et seq.), the Toxic Substances Control Act (15 U.S.C.ss.2601 et
seq. and the Occupational Safety and Health Act (29 U.S.C.ss.651 et seq.), 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 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; provided, however, that Indebtedness
shall not include obligations of a Person which are owed to a trust or other
special purpose entity all of whose common equity is beneficially owned by 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.
"Indentures" means, collectively, the Subordinated
Indenture, dated as of October 15, 1989, between the Company and Bankers Trust
Company, as Trustee, and the Junior Subordinated Indenture, dated as of May 29,
1996, between the Company and Wilmington Trust Company, as Trustee, in each case
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.
"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.
"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
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 51%
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 51% 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;
(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 Bank of America NT&SA-S.F., ABA
Routing No. 121-000-358, Credit BANCONTROL Account No. 12338-15237,
Ref.: MCI Communications Corp., or such other payment office
designated by the Operating Agent and notified to the Borrower and
the Banks.
"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,
limited liability company, 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.
"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 V 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" means, collectively, Moody's, Standard
& Poor's and Fitch.
"Reference Banks" means Bank of America, The Bank of Nova
Scotia, The Chase Manhattan Bank, Citibank, N.A., Mellon Bank, N.A.
and NationsBank of Texas, 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 plus
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 shall
bear or bears interest based on the Reference Rate.
"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 Ratings
Services, a Division of The McGraw-Hill Companies, Inc.
"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.
"Taxes" has the meaning ascribed to such term in Section
2.15(a).
"Termination Date" means the earlier to occur of:
(a) September 26, 2001; 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, service marks, 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.
"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 consolidated 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
consolidated 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.
"United States" means the United States of America.
"Withholding Form" means Internal Revenue Service Form 4224
(or any successor thereto), Internal Revenue Service Form 1001 (or any successor
thereto) or any other Internal Revenue Service form pursuant to which a Person
may claim an exemption from (or reduction of) withholding of United States
federal income tax on the receipt of payment of principal, interest or fees, as
the context may require.
"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 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.
(d) The term "including" is not limiting and means
"including without limitation."
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.
(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 V would
be effective if a Pro Rata Advance were made or outstanding 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 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) 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").
(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 (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 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 such 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 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
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 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 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
three (3) 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 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 November 15, 1996 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 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.
(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 (including
the rate for additional interest payable pursuant to Section 2.11(d)) 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 or termination
of 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, 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 the account of the Banks to which such payments shall be
owing, pro rata in accordance with the respective amounts 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 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 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, 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 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.
Notwithstanding any other provision of this Agreement, if any Bank is entitled
to a reduction in the applicable withholding tax solely by reason of a filing of
a Withholding Form, 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 Withholding Form.
(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 two (2) accurate
and complete signed originals of the relevant Withholding Form
indicating that such Bank is on the date of delivery thereof entitled
to receive payments of principal, interest and fees for the account of
its Lending Office or Lending Offices under this Agreement free from
(or at a reduced rate of) withholding of United States Federal income
tax (and, if any political subdivision of the United States shall
impose similar withholding 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 Withholding Forms previously delivered by it hereunder
two (2) accurate and complete signed originals of the relevant
Withholding Form, 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 (or at a reduced rate of) 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 change in the most recent
Withholding Form 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 the relevant Withholding Form in
replacement for the forms previously delivered by such Bank;
(iv) if such Bank claims exemption from (or a reduced rate
of) withholding tax under a United States tax treaty by providing a
Withholding Form 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
Withholding Form as no longer in compliance with this Section
2.15(f). In the event a Bank claiming exemption (other than
pursuant to a treaty) from United States withholding tax by
filing a Withholding Form 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 or 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:
(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, if any, under Section 2.15(f) in respect of such Lending
Office; or
(ii) if such Bank shall have delivered to the Company a
Withholding Form 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 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
Withholding Form.
(h) If, at any time, the Company shall request any Bank to
deliver any forms or other documentation pursuant to Section 2.15(f)(vi), 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, in the judgment of such
Bank, such change shall not otherwise be disadvantageous to such Bank.
(k) Each Bank also agrees to take any other action
(including 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 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 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
(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, in the judgment of such Bank, such
change 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 or any change in any applicable law, rule or regulation regarding capital
adequacy, 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 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 or such corporation 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), the Company may designate a
Bank (not similarly affected under Section 2.17(b)) 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), 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:
(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 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:
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
Restated Certificate of Incorporation or Amended and Restated 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 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 other 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
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 1994) 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) health care benefits for twenty-four (24) months for
covered dependents following the death of a participant in the MCI
Communications Corporation Health and Welfare Plan, (ii) as may be required by
the Consolidated Budget Reconciliation Act of 1985, as amended ("COBRA"), and
the regulations thereunder, (iii) at the expense of the participant or the
beneficiary of the participant, (iv) welfare benefit plans maintained by WUI for
retiree participants presently numbering up to 326, and (v) 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 possible liquidity
support for the issuance 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 Section 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, or 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 in accordance with GAAP.
3.12 Financial Condition.
(a) The audited consolidated balance sheet of the Company
and its Subsidiaries as of December 31, 1995 and the related consolidated income
statement and statement of cash flows for the fiscal year ended on such date,
accompanied by the opinion thereon of Price Waterhouse LLP, 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 liabilities for taxes and material commitments)
to the extent required under GAAP to be disclosed therein.
(b) Since December 31, 1995, 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.
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 (a) the Communications Act of 1934, as amended, the
Telecommunications Act of 1996, as amended, or the rules, regulations and
policies of the Federal Communications Commission under either thereof (except
for direct or derivative obligations to furnish nonburdensome information
routinely required of similarly situated Persons) or (b) 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" or "Senior
Debt", as defined in the respective Indentures and such obligations shall rank
prior in right of payment, to the extent and in the manner set forth in the
respective Indentures, 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 respective Indentures. 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;
(b) Corporate Documents of the Company. Certified copies of
the Restated 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;
(c) By-Laws of the Company. Copies of the Amended and
Restated 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 the 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 & 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);
(j) MCI Telecom Certificate. A certificate signed by a
Responsible Officer on behalf of the Company stating that the aggregate book
value of the assets of MCI Telecom (net of intercompany receivables) was equal
to at least $15,000,000,000 as of December 31, 1995;
(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 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 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 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 4.02 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:
(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 of 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 as of the end of and for the previous
year, all in reasonable detail and accompanied by the report of Price Waterhouse
LLP or another nationally recognized independent public accounting firm, which
report shall state that such consolidated financial statements fairly present
the financial condition 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 of 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 dates or 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 condition 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;
(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;
(d) annually, concurrently with the delivery of the
financial statements referred to in Section 5.01(a), a certificate of a
Responsible Officer on behalf of the Company stating that the aggregate book
value of the assets of MCI Telecom (net of intercompany receivables) as of the
last day of the applicable fiscal year was equal to at least $15,000,000,000;
and
(e) 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, 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 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 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
(b) as to which such failure to comply would not have a
material adverse effect on the business, operations, properties, assets 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.
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;
(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 pursuant to the Securities Exchange
Act of 1934, as amended, 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 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 telecommunications
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:
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 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 such assets or the owner
of such assets was acquired and shall not have been created in anticipation
thereof by or with the agreement of MCI Telecom;
(h) Liens on assets (other than current assets) 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 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 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, 1995 and (ii) the book value of
the assets of MCI Telecom as of the date of the most recent financial statements
furnished to the Operating Agent pursuant to Section 5.01.
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, intercompany receivables (but only if the receivables in question
are being transferred to the Company or any of its Subsidiaries), 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; 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) 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 shall 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 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: (i) 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; (ii) to buy or carry Margin Stock
unless (A) 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 (B) 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 (iii)
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 in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (12 U.S.C. 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
(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
(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 MCI Telecom 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 Fifty
Million Dollars ($50,000,000) 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
Seventy-Five Million Dollars ($75,000,000) 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 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 (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 MCI Telecom
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 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; or
(j) Involuntary Proceedings. Any involuntary
proceeding or case or any involuntary petition shall be commenced
or filed against the Company or MCI Telecom under any bankruptcy,
insolvency or similar law or seeking the dissolution, liquidation
or reorganization of the Company or MCI Telecom or the appointment of a
receiver, trustee, custodian or liquidator for the Company or MCI Telecom 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 MCI Telecom'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 Fifty Million Dollars ($50,000,000) (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
Fifty Million Dollars ($50,000,000) 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) 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 Fifty Million Dollars ($50,000,000); 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 MCI Telecom involving in the aggregate a liability (not paid or
fully covered by insurance) of Fifty Million Dollars ($50,000,000), 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 (within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall acquire "beneficial ownership" (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act)
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 accrued 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
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company, and without any further act of the
Operating Agent or any Bank.
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 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 agent or attorney-in-fact that it
selects with reasonable care.
8.03 Liability of the Agents and the Syndication Agent. Neither any
Agent 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 any Agent 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 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 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 (or all of the Banks if
so required by Section 9.01) as it shall deem appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense (except any such liability or expense resulting from its gross
negligence or willful misconduct) 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 (or all
of the Banks if so required by Section 9.01) 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.
8.06 Credit Decision. Each Bank expressly acknowledges that neither any
Agent 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 any Agent 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, condition
(financial 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 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 herein or the transactions contemplated
hereby 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 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, except to the extent such
expenses result from the gross negligence or willful misconduct of such Agent or
the Syndication Agent. 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) "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.
8.10 Co-Agents. None of the Banks identified on the facing page or
signature pages of this Agreement as a "co-agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified as a "co-agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
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, the Banks and the Agents as follows:
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: Notices pursuant to Article II
(with copies of notices pursuant to
Section 2.06 to the New York address
set forth below):
Bank of America National Trust
and Savings Association,
as Operating Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Agency Administrative
Services #5596
Telecopier: (415) 436-2700
All other notices:
Bank of America National Trust
and Savings Association,
as Operating Agent
335 Madison Avenue - 5th Floor
New York, New York 10017
Attention: Doug Bontemps
Telephone: (212) 503-8074
Telecopier: (212) 503-7984
The Competitive
Bid Agent: Notices pursuant to Article II:
Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
1455 Market Street - 12th Floor
San Francisco, California 94103
Attention: Agency Administrative
Services #5596
Telecopier: (415) 436-2700
All other notices:
Bank of America National Trust
and Savings Association,
as Competitive Bid Agent
335 Madison Avenue - 5th Floor
New York, New York 10017
Attention: Doug Bontemps
Telephone: (212) 503-8074
Telecopier: (212) 503-7984
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, or 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.
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 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
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, and indemnify and hold
harmless each Bank, each Agent and the Syndication Agent and each of their
respective officers, directors, agents and employees (each, an "Indemnified
Person") from and against, any and all other liabilities, obligations, losses,
damages, penalties, judgments, costs, expenses or disbursements of any kind or
nature whatsoever (including 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 Section 9.04
and 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 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 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, except as to Sections 2.15, 2.17 and 9.05). 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, a new
Pro Rata Note to the order of the Assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment Notice and Acceptance and a new
Competitive Bid Note to the order of the Assignee and, if the assigning Bank
shall have retained a portion of its Commitment hereunder, a new Pro Rata Note
to the order of the assigning Bank in an amount equal to the amount of the
Commitment 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 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
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 such Bank and the Company provided that such disclosure is subject to an
appropriate protective order (obtained by the Company) 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; (vi) to
such Bank's Affiliates and (vii) to any Participant or Assignee (each, a
"Transferee") and any prospective Transferee; provided, that (A) prior to any
disclosure by a Bank pursuant to clause (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
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 or interest or fees due 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 rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of such portion.
(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 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 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; 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
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:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Competitive Bid Agent
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Operating Agent
By:
Title:
BA SECURITIES, INC.,
as Syndication Agent
By:
Title:
5
<PAGE>
THE BANK OF NOVA SCOTIA,
as Co-Agent
By:
Title:
THE CHASE MANHATTAN BANK,
as Co-Agent
By:
Title:
CITIBANK, N.A.,
as Co-Agent
By:
Title:
MELLON BANK, N.A.,
as Co-Agent
By:
Title:
NATIONSBANK OF TEXAS, N.A.,
as Co-Agent
By:
Title:
6
<PAGE>
Commitments THE BANKS:
$ 150,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:
Title:
$ 125,000,000 THE BANK OF NOVA SCOTIA
By:
Title:
$ 125,000,000 THE CHASE MANHATTAN BANK
By:
Title:
$ 125,000,000 CITIBANK, N.A.
By:
Title:
$ 125,000,000 MELLON BANK, N.A.
By:
Title:
$ 125,000,000 NATIONSBANK OF TEXAS, N.A.
By:
Title:
$ 100,000,000 THE BANK OF NEW YORK
By:
Title:
$ 100,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By:
Title:
$ 100,000,000 THE FUJI BANK, LIMITED,
NEW YORK BRANCH
By:
Title:
$ 100,000,000 THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By:
Title:
$ 75,000,000 THE BANK OF TOKYO-MITSUBISHI,
LTD.
By:
Title:
$ 75,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Title:
$ 75,000,000 PNC BANK, NATIONAL ASSOCIATION
By:
Title:
$ 75,000,000 WELLS FARGO BANK, N.A.
By:
Title:
$ 50,000,000 COMERICA BANK
By:
Title:
$ 50,000,000 THE DAI-ICHI KANGYO BANK, LTD.
By:
Title:
$ 50,000,000 DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS BRANCHES
By:
Title:
By:
Title:
$ 50,000,000 THE SANWA BANK, LIMITED -
NEW YORK BRANCH
By:
Title:
$ 50,000,000 TORONTO DOMINION (NEW YORK),
INC.
By:
Title:
$ 50,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By:
Title:
7
<PAGE>
$ 25,000,000 BANQUE NATIONALE DE PARIS
By:
Title:
By:
Title:
$ 25,000,000 BARCLAYS BANK PLC
By:
Title:
$ 25,000,000 CIBC INC.
By:
Title:
$ 25,000,000 FIRST NATIONAL BANK OF MARYLAND
By:
Title:
$ 25,000,000 LTCB TRUST COMPANY
By:
Title:
8
<PAGE>
$ 25,000,000 SIGNET BANK
By:
Title:
$ 25,000,000 SUNTRUST BANK, ATLANTA
By:
Title:
By:
Title:
$ 25,000,000 THE TOYO TRUST & BANKING CO.,
LTD., NEW YORK BRANCH
By:
Title:
By:
Title:
$ 25,000,000 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
Title:
By:
Title:
9
