June 2, 1999 WILLIAMS COMMUNICATIONS, INC. SENIOR CREDIT FACILITIES COMMITMENT LETTER Williams Communications, Inc. One Williams Center Tulsa, Oklahoma 74172 Attention: Ladies and Gentlemen: Williams Communications, Inc. ("you" or the "Borrower"), a...
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EXHIBIT 10.58
EXECUTION COPY
June 2, 1999
XXXXXXXX COMMUNICATIONS, INC.
SENIOR CREDIT FACILITIES
COMMITMENT LETTER
Xxxxxxxx Communications, Inc.
One Xxxxxxxx Center
Tulsa, Oklahoma 74172
Attention:
Ladies and Gentlemen:
Xxxxxxxx Communications, Inc. ("you" or the "Borrower"), a wholly-owned
subsidiary of Xxxxxxxx Communications Group, Inc. ("Holdings"), a wholly-owned
subsidiary of The Xxxxxxxx Companies, Inc. (the "Parent") has requested that
Chase Securities Inc. ("CSI") and Banc of America Securities LLC ("BAS") agree
to act as Joint Lead Arrangers and Joint Book Managers in structuring, arranging
and syndicating up to $1,000,000,000 in senior credit facilities (the
"Facilities"), and that each of Bank of America, N.A. (NationsBank, N.A. d/b/a
Bank of America, N.A.) ("Bank of America") and The Chase Manhattan Bank ("Chase"
and, together with Bank of America, the "Primary Lenders") commit to provide
$500,000,000 of the Facilities and to serve as Administrative Agent and
Syndication Agent, respectively, for the Facilities. Your request for the
Facilities is made in connection with (i) the contribution by the Parent of
material subsidiaries that hold interests in international communications
projects and the contribution by Holdings of all of its material subsidiaries
(other than the Borrower), in each case to the Borrower (the "Reorganization"),
and (ii) (x) the proposed issuance by Holdings of not less than $1,000,000,000
of its common stock (the "Equity Issuance") and (y) a proposed offering by
Holdings of $1,300,000,000 of high yield senior notes due 2009 (the "Notes
Offering").
CSI and BAS are pleased to advise you that they are willing to act as
joint book managers and joint lead arrangers for the Facilities. Bank of America
is pleased to advise you of its commitment to provide up to $500,000,000 of the
Facilities and
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Chase is pleased to advise you of its commitment to provide up to $500,000,000
of the Facilities (each such commitment to be allocated pro rata among each of
the Term Facility and Revolving Facility referred to below), in each case
subject to the terms and conditions set forth or referred to in this Commitment
Letter and in the Summary of Principal Terms and Conditions attached hereto as
Exhibit A (the "Term Sheet"). Subject to the terms of this Commitment Letter and
the Term Sheet, the Facilities will consist of (i) a $500,000,000 7-year senior
multi-draw amortizing term loan facility (the "Term Facility") and (ii) a
$500,000,000 6-year senior reducing revolving credit facility (with a letter of
credit sub-limit and a swingline loan sub-limit) (the "Revolving Facility").
It is agreed that Bank of America and Chase will act as the sole and
exclusive Administrative Agent and Syndication Agent, respectively, and that CSI
and BAS will act as the sole and exclusive advisors, book managers and arrangers
(in such capacity, the "Arrangers") for the Facilities, and each will, in such
capacities, perform the duties and exercise the authority customarily performed
and exercised by it in such roles. You agree that no other agents, co-agents or
arrangers will be appointed, no other titles will be awarded (other than the
appointment of certain institutions previously agreed upon as Co-Documentation
Agents and the appointment of Managing Agents to be mutually agreed upon) and
no compensation (other than that expressly contemplated by the Term Sheet and
the Fee Letter referred to below) will be paid in connection with the Facilities
unless you and we shall so agree.
CSI and BAS intend to syndicate the Facilities (including, in their
discretion, all or part of Bank of America's and Xxxxx'x commitments hereunder)
to a group of financial institutions (together with Bank of America and Chase,
the "Lenders") identified by them in consultation with you. CSI and BAS intend
to commence syndication efforts in respect of the Facilities promptly upon the
execution of this Commitment Letter and you agree actively to assist CSI and BAS
in completing such syndication satisfactorily to them. Such assistance shall
include (a) your and the Parent's using commercially reasonable efforts to
ensure that the syndication efforts benefit materially from your existing
lending relationships, (b) direct contact between senior management and advisors
of the Parent and the Borrower and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with CSI and BAS, of one or more meetings of prospective Lenders.
It is understood and agreed that CSI and BAS, in consultation with you,
will manage and control all aspects of the syndication, including decisions as
to the selection of the proposed Lenders and any titles offered to the proposed
Lenders,
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when commitments will be accepted, the final allocations of the commitments
among the Lenders and the amount and distribution of fees among the Lenders.
Upon the acceptance of the commitment of any Lender to provide a portion of any
of the Facilities, Bank of America and Chase shall be released pro rata from a
portion of their commitments with respect to such Facility in an aggregate
amount equal to the commitment of such Lender. In acting as Arrangers, CSI and
BAS will have no responsibility other than to arrange the syndications.
To assist CSI and BAS in their syndication efforts, you agree promptly
to prepare and provide to CSI and BAS all information with respect to the
Parent, Holdings, the Borrower and their respective subsidiaries and affiliates,
the Equity Issuance, the Notes Offering and the other transactions contemplated
hereby, including all financial information and Projections (the "Projections"),
as we may reasonably request in connection with the arrangement and syndication
of the Facilities. You hereby represent and covenant that (a) all information
other than the Projections (the "Information") that has been or will be made
available to CSI, BAS or any of the Lenders by you or any of your
representatives, taken as a whole, is or will be, when furnished, complete and
correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (b) the Projections that have been or will be made available to CSI, BAS or
any of the Lenders by you or any of your representatives have been or will be
prepared in good faith based upon reasonable assumptions. You understand that in
arranging and syndicating the Facilities, we may use and rely on the Information
and Projections without independent verification thereof.
As consideration for each Primary Xxxxxx's commitment hereunder and
CSI's and BAS's agreement to perform the services described herein, you agree to
pay to the Administrative Agent, for the accounts of the Arrangers and the
Primary Lenders, the nonrefundable fees set forth in Annex I to the Term Sheet
and in the Fee Letter dated the date hereof and delivered herewith (the "Fee
Letter").
Each Primary Lender's commitment hereunder and CSI's and BAS's
agreement to perform the services described herein is subject to (a) there not
occurring or becoming known to such person any material adverse condition or
material adverse change in or affecting the business, operations, property,
condition (financial or otherwise) or prospects of Holdings and its subsidiaries
and affiliates (including the Borrower), taken as a whole, or the Parent and its
subsidiaries and affiliates, taken as a whole, (b) such person's completion of
and satisfaction in all respects with a due
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diligence investigation of Holdings and its subsidiaries and affiliates
(including the Borrower and its domestic and foreign subsidiaries and
affiliates), including investigation as to business, financial (including
projections), legal, tax, accounting and environmental matters and other
structural and ownership matters, (c) such person's not becoming aware after the
date hereof of any information or other matter affecting Holdings or any of its
subsidiaries or affiliates (including the Borrower) which is inconsistent in a
material and adverse manner with any such information or other matter disclosed
to such person prior to the date hereof, (d) there not having occurred a
material disruption of or material adverse change in financial, banking or
capital market conditions that, in the judgment of such person, could materially
impair the syndication of the Facilities, (e) such person's satisfaction that
prior to and during the syndication of the Facilities there shall be no
competing offering, placement or arrangement of any debt securities or bank
financing (other than the Notes Offering) by or on behalf of the Parent or
Holdings or any subsidiary or affiliate thereof (including the Borrower) without
the consent of the Arrangers, (f) receipt of pro forma income statements and
balance sheets of Holdings and its consolidated subsidiaries, prepared as of the
most recent fiscal quarter ended prior to the date of execution and delivery of
the documentation referred to below having given effect to the Reorganization,
the initial borrowings under the Facilities and, if the Equity Issuance and the
Notes Offering shall have been consummated on or prior to the closing date in
respect of the Facilities, the Equity Issuance and the Notes Offering, (g) such
person's review of, and satisfaction in its sole discretion with, (i) the
arrangements with respect to the Borrower's and the Parent's agreements to
purchase at the end of the lease term (or, at their option, earlier) all of the
ADP property (but only with, in the case of the Borrower, Additional Capital (as
defined in the Term Sheet)) and, in the case of a purchase by the Parent, to
contribute such property to the Borrower in exchange for equity securities of
Holdings or Qualifying Subordinated Debt (as defined in the Term Sheet) and (ii)
the waivers obtained under, and the amendments effected to, the ADP, (h) the
negotiation, execution and delivery on or before September 1, 1999 of definitive
documentation with respect to the Facilities satisfactory to such person and its
counsel, (i) the consummation of the Reorganization, (j) either (x) (1) the
receipt by Holdings of gross proceeds from the Equity Issuance of not less than
$1,000,000,000 and (2) the receipt by Holdings of gross proceeds from the Notes
Offering of not less than $1,300,000,000 or (y) a guarantee by the Parent of all
of the obligations of the Borrower in respect of the Facilities, in form and
substance satisfactory to the Primary Lenders, and (k) the other conditions set
forth or referred to in the Term Sheet. The terms and conditions of the Primary
Lenders' commitments hereunder, CSI's and BAS's agreement to perform the
services described herein and of the Facilities are not limited to those set
forth herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are
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subject to the approval and agreement of the Primary Lenders, CSI, BAS and the
Borrower.
You agree (a) to indemnify and hold harmless CSI, BAS, each Primary
Lender, their respective affiliates and their respective officers, directors,
employees, advisors, and agents (each, an "indemnified person") from and against
any and all losses, claims, damages and liabilities to which any such
indemnified person may become subject arising out of or in connection with this
Commitment Letter, the Fee Letter, the Facilities, the use of the proceeds
thereof or any related transaction or any claim, litigation, investigation or
proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person
upon demand for any legal or other expenses incurred in connection with
investigating or defending any of the foregoing, provided that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a
final, nonappealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and (b) to reimburse CSI, BAS,
each Primary Lender and their respective affiliates on demand for all reasonable
out-of-pocket expenses (including due diligence expenses, syndication expenses,
reasonable travel expenses, and reasonable fees, charges and disbursements of
counsel) incurred in connection with the Facilities and any related
documentation (including this Commitment Letter, the Term Sheet, the Fee Letter
and the definitive credit documentation) or the administration, amendment,
modification or waiver thereof. No indemnified person shall be liable for any
indirect or consequential damages in connection with its activities related to
the Facilities. No indemnified person shall be liable for any damages arising
from the use by others of Information or other materials obtained through
electronic, telecommunications or other information transmission systems or for
any special, indirect, consequential, exemplary or punitive damages in
connection with the Facilities.
This Commitment Letter shall not be assignable by you without the prior
written consent of CSI, BAS and the Primary Lenders (and any purported
assignment without such consent shall be null and void), is intended to be
solely for the benefit of the parties hereto and is not intended to confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto and, in the case of the preceding paragraph, the indemnified
parties. This Commitment Letter may not be amended or waived except by an
instrument in writing signed by you, CSI, BAS and each Primary Lender. This
Commitment Letter may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Commitment
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Letter by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. This Commitment Letter (including the Term Sheet
annexed hereto) and the Fee Letter are the only agreements that have been
entered into among us with respect to the Facilities and set forth the entire
under standing of the parties with respect thereto. This Commitment Letter, the
Term Sheet and the Fee Letter shall be governed by, and construed in accordance
with, the laws of the State of New York. Each of the Borrower, CSI, BAS and the
Primary Lenders hereby submits to the jurisdiction of the United States District
Court for the Southern District of New York and of any New York State court
sitting in New York City for the purpose of all legal proceedings arising out of
or relating to this Commitment Letter, the Term Sheet, the Fee Letter or the
transactions contemplated hereby or thereby. Each of the Borrower, CSI, BAS and
the Primary Lenders hereby irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum and
to the right to have a trial by jury.
This Commitment Letter is delivered to you on the understanding that
none of this Commitment Letter, the Term Sheet or the Fee Letter or any of their
terms or substance shall be disclosed, directly or indirectly, to any other
person except (a) to your or the Parent's officers, agents and advisors who are
directly involved in the consideration of this matter or (b) as may be compelled
in a judicial or administrative proceeding or as otherwise required by law (in
which case you agree to inform us promptly thereof), provided, that the
foregoing restrictions shall cease to apply (except in respect of the Fee Letter
and its terms and substance) after this Commitment Letter has been accepted by
you.
You acknowledge that CSI, BAS and each Primary Lender may be providing
debt financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you may have conflicting
interests regarding the transactions described herein and otherwise. None of
CSI, BAS or either Primary Lender will use confidential information obtained
from you by virtue of the transactions contemplated by this letter or their
other relationships with you in connection with the performance by it of
services for other companies, and none of CSI, BAS or either Primary Lender will
furnish any such information to other companies. You also acknowledge that none
of CSI, BAS or either Primary Lender has any obligation to use in connection
with the transactions contemplated by this letter, or to furnish to you,
confidential information obtained from other companies. You consent to the use
by CSI, BAS and each Primary Lender of your name and a description of the amount
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and type of the Facilities in advertisements published after the date of
execution and delivery of definitive credit documentation.
The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter, the Primary Lenders' commitments hereunder or CSI's and BAS's agreement
to perform the services described herein.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to Bank of America and Chase executed counterparts hereof and of the
Fee Letter not later than 5:00 p.m., New York City time, on June 4, 1999. Each
Primary Xxxxxx's commitment and CSI's and BAS's agreements herein will expire at
such time in the event Bank of America and Chase have not received such executed
counterparts in accordance with the immediately preceding sentence.
Bank of America, Chase, CSI and BAS are pleased to have been given the
opportunity to assist you in connection with this important financing.
Very truly yours,
BANK OF AMERICA, N.A.
(NATIONSBANK, N.A. d/b/a BANK
OF AMERICA, N.A.)
By:
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Name:
Title:
THE CHASE MANHATTAN BANK
By:
------------------------------------
Name:
Title:
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CHASE SECURITIES INC.
By:
------------------------------------
Name:
Title
BANC OF AMERICA
SECURITIES LLC
By:
------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first written above by:
XXXXXXXX COMMUNICATIONS, INC.
By:
--------------------------------
Name:
Title:
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EXHIBIT A
SENIOR CREDIT FACILITIES
Summary of Principal Terms and Conditions
June 2, 1999
I. PARTIES
Borrower: Xxxxxxxx Communications, Inc.
(the "Borrower"), a wholly-owned
subsidiary of Xxxxxxxx
Communications Group, Inc.
("Holdings").
Joint Book Managers
and Joint Lead Arrangers: Chase Securities Inc. and Banc of
America Securities LLC (in such
capacities, the "Arrangers").
Administrative Agent: Bank of America, N.A.
(NationsBank, N.A. d/b/a Bank of
America, N.A.) ("Bank of
America").
Syndication Agent: The Chase Manhattan Bank
("Chase").
Managing Agents: A group of financial institutions
reasonably accept able to the
Arrangers and the Borrower.
Lenders: A syndicate of banks, financial
institutions and other entities,
including Bank of America and
Chase, arranged by the Arrangers
(collectively, the "Lenders").
Letter of Credit
Issuing Banks: Bank of America and Chase (each,
an "Issuer").
Swingline Lenders: Bank of America and Chase (the
"Swingline Lenders").
II. SENIOR CREDIT FACILITIES
Type and Amount of
Facilities: (i) A multi-draw 7-year
amortizing senior term loan
facility in an aggregate
principal amount of
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$500,000,000 (the "Term Facility"
and the loans thereunder, the
"Term Loans").
(ii) A 6-year senior reducing
revolving credit facility (the
"Revolving Facility") in the
amount of $500,000,000 (the loans
thereunder, the "Revolving
Loans", and together with the
Term Loans and any loans under
any Incremental Facility (as
defined below), the "Loans").
(iii) The Borrower may request,
by notice to the Administrative
Agent and the Syndication Agent
at any time prior to the second
anniversary of the Closing Date,
at which time no default or event
of default shall have occurred
and be continuing, one or more
additional facilities each of
which shall be in an aggregate
principal amount of not less than
$100,000,000 and all of which
together shall not exceed
$500,000,000 in aggregate
principal amount (any such
additional facility, an
"Incremental Facility" and
together with the Term Facility
and the Revolving Facility, the
"Facilities"). The terms and
conditions of any such
Incremental Facility shall be as
agreed by the Borrower, the
Arrangers, the Syndication Agent
and the Administrative Agent,
provided that the average life
to maturity of the loans and
commitments under any such
Incremental Facility shall not be
less than the then existing
average life to maturity of the
Term Facility or the Revolving
Facility. Any such Incremental
Facility shall be offered, first,
on a pro rata basis to existing
Lenders and, to the extent that
the existing Lenders do not elect
to subscribe for any such
Incremental Facility, to such
other financial institutions as
the Borrower, the Syndication
Agent, the Administrative Agent
and the Arrangers shall agree. No
Lender shall have any obligation
to participate in any such
Incremental Facility.
Letters of Credit: A portion of the Revolving
Facility, not in excess of
$100,000,000, shall be available
for the issuance of
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letters of credit (the "Letters
of Credit") by the Issuers. No
Letter of Credit shall have an
expiration date after the earlier
of (a) one year after the date of
issuance and (b) five business
days prior to the Revolving
Facility Termination Date,
provided that any Letter of
Credit with a one-year tenor may
provide for the renewal thereof
for additional one-year periods
(which shall in no event extend
beyond the date referred to in
clause (b) above).
Drawings under any Letter of
Credit shall be reimbursed by
the Borrower (whether with its
own funds or with the proceeds of
Revolving Loans) on the same
business day. To the extent that
the Borrower does not so
reimburse the applicable Issuer,
the Lenders under the Revolving
Facility shall be irrevocably and
unconditionally obligated to
reimburse such Issuer on a pro
rata basis.
Swingline Loans: A portion of the Revolving Credit
Facility not in excess of
$50,000,000 shall be available
for swingline loans (the
"Swingline Loans") ratably from
the Swingline Lenders on same-day
notice to the Administrative
Agent. Any such Swingline Loans
will re duce availability under
the Revolving Credit Facility on
a dollar-for-dollar basis. Each
Lender under the Revolving Credit
Facility shall acquire, under
certain circumstances, an
irrevocable and unconditional pro
rata participation in each
Swingline Loan.
Availability: The Term Facility will be
available on a non-revolving
basis in multiple drawdowns (each
of which shall be in a minimum
amount to be agreed) occurring
during the period commencing on
the Closing Date and ending on
the date immediately prior to the
first anniversary of the Closing
Date (the "Term Facility
Termination Date").
The Revolving Facility will be
available on a revolving basis
during the period commencing on
the Closing
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Date and ending on the date
immediately prior to the sixth
anniversary of the Closing Date
(the "Revolving Facility
Termination Date").
Final Maturities: (i) Term Loans shall mature on
the seventh anniversary of the
Closing Date.
(ii) The commitments in respect
of the Revolving Facility shall
terminate, and all Revolving
Loans shall mature, on the sixth
anniversary of the Closing Date.
Purpose: The proceeds of the Term
Facilities and the Revolving
Facility shall be used (i) to
refinance the Existing Revolver
(as defined under "Initial
Conditions" be low), (ii) to make
capital expenditures and for
working capital requirements and
general corporate purposes of
the Borrower and its
subsidiaries, (iii) to repay the
Intercompany Note, to the extent
permitted herein, (iv) to pay the
fees and expenses associated with
the Facilities and (v) to make
permitted acquisitions.
III. CERTAIN PAYMENT PROVISIONS
Fees and Interest Rates: As set forth in Annex I.
Amortization Payments/
Reduction of Commitments: (i) Term Loans shall be repaid in
the aggregate percentages per
transaction year set forth below
(such amount to be paid in four
equal quarterly installments in
each transaction year).
Transaction Year Amortization Percentage
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4th Year 15%
5th Year 25%
6th Year 30%
7th Year 30%
(ii) The commitments under the
Revolving Facility shall be
permanently reduced in the
aggregate percentages
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per transaction year set forth
below (such amount to be applied
in four equal quarterly amounts
in each transaction year).
Concurrently therewith, Revolving
Loans shall be repaid (and cash
collateral will be provided in
respect of outstanding Letters of
Credit) so that the aggregate
principal amount of outstanding
Revolving Loans and
non-cash-collateralized Letters
of Credit does not exceed the
revolving commitments as so
reduced.
Commitment
Transaction Year Reduction Percentage
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4th Year 20%
5th Year 30%
6th Year 50%
Mandatory Prepayments: The Borrower shall repay
outstanding Loans under each of
the Facilities (and the
commitments under the Revolving
Facility shall be permanently
reduced and, to the extent that
the aggregate amount of
outstanding Letters of Credit
exceeds the Revolving Facility
commitments as then reduced,
shall provide cash collateral
for outstanding Letters of
Credit), in each case as set
forth below, by an amount equal
to:
(i) 100% of the net cash proceeds
received from the sale or
disposition (including by way of
casualties and condemnations) of
all or any part of the assets of
Holdings or any of its
subsidiaries (other than
permitted dark fiber sales, sales
of non-core assets or sales of
inventory in the ordinary course
of business), to the extent such
net cash proceeds are not
reinvested in core assets or
permitted acquisitions within 12
months of the receipt thereof.
(ii) 50% of excess cash flow (to
be defined) for each fiscal year,
beginning with the 2001 fiscal
year; provided that no such
prepayment shall be required if
(x) the rating assigned to the
Facilities by Standard & Poors
Ratings Service ("S&P") is not
less than BBB-
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and the rating assigned to the
Facilities by Xxxxx'x Investors
Service Inc. ("Xxxxx'x") is not
less than Baa3 or (y) the ratio
of Total Debt to Adjusted EBITDA
is less than 3.5 to 1.0 as of the
last day of the most recently
ended fiscal quarter for which
financial statements have been
delivered (after giving pro forma
effect to the issuance of any
debt after the end of such fiscal
quarter).
(iii) 100% (or, if (x) the rating
assigned to the Facilities by
S&P is not less than BBB- and the
rating assigned to the Facilities
by Xxxxx'x is not less than Baa3
or (y) the ratio of Total Debt to
Adjusted EBITDA is less than 3.5
to 1.0 as of the last day of the
most recently ended fiscal
quarter for which financial
statements have been delivered
(after giving pro forma effect to
the issuance of any debt after
the end of such fiscal quarter),
50%) of the net cash proceeds
received from the issuance of
debt by Holdings or any of its
subsidiaries after the Closing
Date (other than debt permitted
under the limitation on
indebtedness covenant).
All mandatory prepayments shall
be made without penalty or
premium (except for LIBOR
breakage costs, if any) and shall
be applied (pro rata) to prepay
outstanding Term Loans and to
reduce Revolving Facility
commitments and repay Revolving
Loans (and then to provide cash
collateral for outstanding
Letters of Credit) in excess of
the Revolving Facility
commitments as then reduced.
Mandatory prepayments of the Term
Loans and mandatory reductions
of the Revolving Facility
commitments shall reduce
subsequent scheduled amortization
payments (or permanent reductions
of commitments, as applicable) in
inverse order of maturity.
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Optional Prepayments and
Commitment Reductions: Loans may be prepaid (subject to
compensation for LIBOR breakage
costs, if any) and commitments
may be reduced by the Borrower in
minimum amounts to be agreed
upon.
Optional prepayments of Term
Loans and optional reductions of
the Revolving Facility
commitments shall reduce
subsequent scheduled amortization
payments (or permanent
reductions of commitments, as
applicable) in inverse order of
maturity.
IV. CERTAIN CONDITIONS:
Initial Conditions: The availability of the
Facilities shall be conditioned
upon satisfaction of, among other
things, the following conditions
precedent (the date upon which
all such conditions precedent
shall be satisfied, the "Closing
Date"):
(a) Holdings and its subsidiaries
(including the Borrower) shall
have executed and delivered
satisfactory definitive financing
documentation with respect to the
Facilities (the "Credit
Documentation").
(b) The Parent shall have
executed and delivered the
Intercreditor Agreement (as
defined below).
(c) The Lenders shall be
satisfied in their sole
discretion with the proposed
structure of (i) the contribution
to the Borrower by The Xxxxxxxx
Companies, Inc. (the "Parent") of
its material subsidiaries that
hold interests in international
communications projects and by
Holdings of all of its material
subsidiaries (other than the
Borrower), in each case not
currently held, directly or
indirectly, by the Borrower (the
"Reorganization") and (h) the
capital structure of Holdings and
the Borrower, both before and
after giving effect to the
foregoing transactions.
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(d) The Lenders shall have
reviewed and be satisfied in
their sole discretion with the
terms of the Intercompany Note.
(e) The Lenders shall have
reviewed and be satisfied in
their sole discretion with (i)
the arrangements with respect to
the Borrower's and the Parent's
agreement to purchase, at the end
of the lease term (or, at their
option, earlier) all of the ADP
property (but only with, in the
case of the Borrower, Additional
Capital (as defined below)) and,
in the case of a purchase by the
Parent, to contribute such
property to the Borrower in
exchange for equity securities of
Holdings or Qualifying
Subordinated Debt (as defined
below) and (ii) the waivers
obtained under, the amendments
effected to, and the
off-balance-sheet accounting
treatment of, the ADP.
(f) The commitments under the
Borrower's existing senior
revolving credit facility (the
"Existing Revolver") shall have
been terminated, all amounts
outstanding thereunder shall
have been repaid in full and all
letters of credit issued
thereunder shall have been
canceled or arrangements
satisfactory to the issuer
thereof shall have been made for
the reimbursement of amounts
drawn or to be drawn thereunder.
All guarantees of amounts
outstanding under the Existing
Revolver shall have been
released.
(g) The Lenders, the
Administrative Agent and the
Arrangers shall have received all
fees required to be paid, and all
expenses for which invoices have
been presented, on or before the
Closing Date.
(h) All governmental and third
party approvals necessary or, in
the discretion of the
Administrative Agent, advisable
in connection with the
Reorganization, the financing
contemplated hereby, the
continuing operations of the
Borrower and its subsidiaries
and, if the issuance by Holdings
of its common stock to persons
8
17
other than the Parent and its
subsidiaries (the "Equity
Issuance") and the offering (the
"Notes Offering") by Holdings of
its high yield senior notes due
2009 (the "High Yield Notes") are
consummated on or prior to the
Closing Date, the Equity Issuance
and the Notes Offering shall have
been obtained and be in full
force and effect.
(i) The Lenders shall have
received (i) satisfactory audited
consolidated financial statements
of Holdings for the two most
recent fiscal years ended prior
to the Closing Date as to which
such financial statements are
available and (ii) satisfactory
unaudited interim consolidated
financial statements of the
Borrower and Holdings for each
fiscal quarterly period ended
subsequent to the date of the
latest financial statements
delivered pursuant to clause (i)
of this paragraph as to which
such financial statements are
available.
(j) The Lenders shall have
received, and shall be satisfied
with, Holdings's and the
Borrower's pro forma income
statements and balance sheets,
and Holdings's and the Borrower's
projections for the fiscal years
1999 through 2007, in each of the
foregoing cases, having given
effect to the Reorganization, the
initial borrowings under the
Facilities and, if the Equity
Issuance and the Notes Offering
are consummated on or prior to
the Closing Date, the Equity
Issuance and the Notes Offering.
(k) The Lenders shall have
received such legal opinions,
documents and other instruments
(including, without limitation,
officers' solvency certificates)
as are customary for transactions
of this type or as they may
reasonably request.
(l) There shall be no materially
adverse litigation.
(m) The Lenders shall have
received and be satisfied with
all of the terms and conditions
of the indemnity
9
18
to be provided by the Parent to
the Borrower in respect of
environmental matters.
(n) Immediately after giving
effect to the transactions
contemplated hereby to occur on
the Closing Date, there shall be
no debt of Holdings or any of its
restricted subsidiaries
outstanding other than (i) the
loans and letters of credit
outstanding under the Facilities,
(ii) if the closing in respect of
the Notes Offering shall have
occurred, the High Yield Notes,
(iii) the Intercompany Note, (iv)
outstandings under the ADP and
(v) other debt not to exceed
$35,000,000.
(o) Absence of any material
adverse change in the business,
condition (financial or
otherwise), operations,
properties, liabilities or
prospects of Holdings and its
subsidiaries, considered as a
whole, and the Parent and its
subsidiaries, considered as a
whole, in each case since the end
of the most recently ended fiscal
year for which audited financial
statements have been provided to
the Lenders.
(p) The Reorganization shall have
been consummated.
(q) either (x)(1) Holdings shall
have received gross proceeds from
(A) the Equity Issuance of not
less than $1,000,000,000 and (B)
the Notes Offering of not less
than $1,300,000,000, (2) the
terms and conditions of, and all
agreements, instruments and other
documents issued, entered into or
relating to the Equity Issuance
and the Notes Offering
(collectively, the "Other
Financing Documents") shall be in
form and substance satisfactory
to the Lenders and (3) the Equity
Issuance and the Notes Offering
shall have been consummated in
accordance with the Other
Financing Documents, without any
amendment, modification or waiver
unless consented to in writing by
the Lenders or (y) the Parent
shall have guaranteed all of the
obligations of the Borrower
under the Credit Documentation
pursuant
10
19
to a guaranty agreement in form
and substance satisfactory to the
Lenders.
On-Going Conditions: The making of each extension of
credit (including any extension
of credit made on the Closing
Date) shall be conditioned upon
(a) the accuracy of all
representations and warranties
in the Credit Documentation
(including, without limitation,
the material adverse change and
litigation representations) and
(b) there being no default or
event of default in existence at
the time of, or after giving
effect to the making of, such
extension of credit. As used
herein and in the Credit
Documentation a "material adverse
change" shall mean any event,
development or circumstance that
has had or could reasonably be
expected to have a material
adverse effect on (a) the
business, assets, property,
condition (financial or
otherwise) or prospects of
Holdings and its subsidiaries,
taken as a whole, or (b) the
validity or enforceability of any
of the Credit Documentation or
the rights or remedies of the
Administrative Agent and the
Lenders thereunder.
V. SECURITY AND GUARANTEES
Security: If, at any time on or after the
Closing Date, the rating for the
Facilities assigned by S&P is
less than BB- or by Xxxxx'x is
less than Ba3, Holdings and all
direct and indirect restricted
subsidiaries of Holdings will
provide security interests and
liens upon substantially all
assets now or hereafter owned by
Holdings and such subsidiaries,
including, not limited to, all
capital stock of the Borrower and
any other subsidiaries of
Holdings and all accounts
receivable, inventory, patents
and trademarks, other general
intangibles and other personal
property and real property of
Holdings and such subsidiaries;
provided that (x) no foreign
subsidiary of Holdings shall be
required to pledge any assets
held by it, and not more than 66%
of the voting equity interests in
any foreign subsidiary shall be
required to be pledged, unless
the Required Lenders (as
11
20
defined below) so request and (y)
no assets subject to the ADP
shall, so long as they shall be
subject thereto, be included as
collateral hereunder.
All security, if any, will be
released if (i) the Facilities
shall have terminated and all
obligations to the Lenders and
the Administrative Agent in
respect thereof shall have been
paid in full or (ii) after giving
effect to such release, the
rating for the Facilities
assigned by S&P is BB+ or greater
and by Xxxxx'x is Bal or greater.
Guarantees: The Facilities will be
guaranteed, on a joint and
several basis, by Holdings, all
of the direct and indirect
restricted subsidiaries of
Holdings and, unless the
condition set forth in clause
(q)(x) under "Initial Conditions"
above is satisfied, the Parent;
provided that no foreign
subsidiary of Holdings shall be
required to provide any such
guarantee unless the Required
Lenders so request. Such
guarantees will (i) provide for a
complete waiver by the guarantors
thereunder of any rights to
subrogation, reimbursement or
indemnification until such time
as the Facilities have been
terminated and all principal,
interest and other amounts due
thereunder have been indefeasibly
paid in full and (ii) in the case
of guarantees by subsidiaries of
Holdings, be limited to the
largest amount that would not
render the obligations subject to
avoidance under applicable
bankruptcy or fraudulent transfer
law.
VI. INTERCREDITOR AGREEMENT
The Lenders and the Parent (as
holder of the Intercompany Note)
will enter into an Intercreditor
agreement (the "Intercreditor
Agreement"), in form and
substance reasonably satisfactory
to the Required Lenders, pursuant
to which the Parent will agree
that (i) all obligations under
the Intercompany Note shall be
subordinated in all respects to
the rights of the Lenders in any
bankruptcy, insolvency,
liquidation or
12
21
dissolution of the Borrower, (ii)
upon the occurrence and during
the continuance of a default or
event of default (with certain
exceptions to be agreed) under
the Facilities, (x) none of
Holdings, the Borrower or any
subsidiaries thereof may make
payments of principal, interest
or other amounts due or to become
due under, or in respect of, the
Intercompany Note and (y) the
Parent shall refrain from the
exercise of any and all remedies
that it could otherwise exercise
under the terms of the
Intercompany Note, by law or
otherwise, and (iii) it will not
transfer or assign the
Intercompany Note.
VII. CERTAIN DOCUMENTATION MATTERS
The Credit Documentation shall
contain representations,
warranties, covenants and events
of default customary for
financings of this type and other
terms deemed appropriate by the
Lenders (in each case applicable
to Holdings and its restricted
subsidiaries (including the
Borrower) and, if the Parent is a
guarantor, in a manner
substantially similar to its
existing credit facilities,
applicable to the Parent and its
restricted subsidiaries),
including, without limitation:
Representations and
Warranties: Financial statements; absence of
undisclosed material liabilities;
no material adverse change;
corporate existence; compliance
with law; corporate power and
authority; enforceability of
Credit Documentation; no conflict
with law or contractual
obligations; no material
litigation; no default; ownership
of property; liens; intellectual
property; no burdensome
restrictions; taxes; Federal
Reserve regulations; ERISA;
Investment Company Act; Public
Utility Holding Company Act;
subsidiaries; environmental
matters; labor matters; year 2000
compliance; and accuracy of
disclosure.
13
22
Affirmative Covenants: Delivery of financial statements,
reports, accountants' letters,
projections, officers'
certificates and other
information requested by the
Lenders; payment of other
obligations, continuation of
business and maintenance of
existence and material rights and
privileges; compliance with laws
and material contractual
obligations; maintenance of
property and insurance;
maintenance of books and records;
right of the Lenders to inspect
property and books and records;
notices of defaults, litigation
and other material events;
further assurances regarding
collateral, if any; and
compliance with environmental
laws.
Financial Covenants: Financial maintenance covenants
to be calculated on the basis of
Holdings and its restricted
subsidiaries, on a consolidated
basis, with certain definitions
set forth in summary form under
"Definitions" below and others to
be determined (and certain income
statement components thereof to
be annualized for the periods
ending prior to a date to be
determined). Financial covenants
will include, without limitation
(and applicable for the periods
referred to below):
(i) Total Debt/Contributed
Capital (applies Closing Date
through a date to be determined)
(ii) Minimum EBITDA plus dark
fiber sales cash revenues (with
limitations on the amount of dark
fiber sales revenues to be
included for particular periods
to be agreed) (applies Closing
Date through a date to be
determined)
(iii) Limitation on Capital
Expenditures (with rollover of a
portion of unexpended amounts to
the next year permitted) (applies
Closing Date and thereafter)
(iv) Total Debt/Adjusted EBITDA
(applies from a date to be
determined and thereafter)
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23
(v) Senior Debt/Adjusted EBITDA
(applies from a date to be
determined and thereafter)
(vi) Adjusted EBITDA/Interest
Expense (applies from a date to
be determined and thereafter)
Negative Covenants: Limitations on: indebtedness
(including debt and/or preferred
stock of subsidiaries and
issuance of intercompany notes,
with exceptions to be agreed);
leases; liens (including a
prohibition on liens to secure
the Intercompany Note or the High
Yield Notes); guarantee
obligations; mergers,
consolidations, liquidations and
dissolutions; sales of assets
(with exceptions for sales of
dark fiber, provided that such
sales do not reduce the owned
network fiber count below a
minimum to be agreed); dividends
and other payments in respect of
capital stock; investments, loans
and advances (with exceptions for
investments in subsidiary
guarantors, investments in the
telecommunications industry
funded with Additional Capital
and a basket of $275,000,000);
activities of Holdings other than
the issuance of the High Yield
Notes, Qualifying Subordinated
Debt and permitted equity
securities and the ownership of
Borrower capital stock; payments
and modifications of the High
Yield Notes and other debt
instruments (including, without
limitation, the limitations on
payments of principal in respect
of the Intercompany Note referred
to below); modifications of
charter documents of Holdings and
its subsidiaries; transactions
with affiliates; sale and
leasebacks; changes in fiscal
year; negative pledge clauses;
and material changes in lines of
business.
Principal payments in respect of
the Intercompany Note shall be
prohibited prior to June 30,
2000. Thereafter, so long as no
default or event of default (with
certain exceptions to be agreed)
shall then exist:
15
24
(i) principal payments in respect
of the Intercompany Note will be
permitted to be made with
Additional Capital; and
(ii) the Borrower will be
permitted to make other principal
payments in respect of the
Intercompany Note ("Other
Principal Payments") in an
aggregate amount not in excess of
$25,000,000 in any fiscal year,
provided that the aggregate
amount of such Other Principal
Payments shall not be limited so
long as if, prior to, and after
giving effect to, any such
payment, the ratio of Total Debt
to Adjusted EBITDA is less than
5.0 to 1.0.
Upon Other Principal Payment in
excess of $25,000,000 being made
in any fiscal year, the maximum
Total Debt to Adjusted EBITDA
covenant shall thereafter be
reduced (but not increased) to
5.0 to 1.0.
Events of Default: Nonpayment of principal when due;
nonpayment of interest, fees or
other amounts after a grace
period to be agreed upon;
material inaccuracy of
representations and warranties;
violation of covenants (subject,
in the case of certain
affirmative covenants, to a grace
period to be agreed upon);
cross-default; bankruptcy events;
certain ERISA events; material
judgments; ineffectiveness of
collateral documents, if any, or
guarantees; the senior unsecured
debt of the Parent shall be rated
less than BBB- by S&P or less
than Baa3 by Xxxxx'x; and a
change of control (the definition
of which is to be agreed, but
which shall include (i) failure
of Holdings to own 100% of the
outstanding capital stock of the
Borrower or failure of the Parent
to own, directly or indirectly,
more than 75% (or if (x) the
Facilities are rated at least
BBB- by S&P and Baa3 by Xxxxx'x
and (y) the condition set forth
in clause (q) (x) of "Initial
Conditions" under "Certain
Conditions" shall have been
satisfied, 35% of (1) the voting
power of all outstanding voting
stock of Holdings and (2) the
outstanding capital stock of
Holdings and (ii) any person
16
25
(other than the Parent and its
subsidiaries) or group (as
defined in Sections 13(d) and
14(d) of the Securities Exchange
Act of 1934, as amended) owning
more than 35% of (1) the voting
power of all outstanding voting
stock of Holdings or (2) the
outstanding capital stock of
Holdings).
Financial Covenant Default
Cure Provisions: In the event that Holdings and
its restricted subsidiaries fail
to meet any financial maintenance
covenant in any fiscal quarter on
a consolidated basis, the Parent
shall have the right, but not the
obligation, to make a cash equity
contribution to Holdings by
purchasing equity securities of
Holdings (which Holdings shall
use to purchase equity securities
of the Borrower) in an amount
sufficient to enable Holdings and
its restricted subsidiaries to
meet such financial maintenance
covenant on a consolidated basis.
Such equity securities will not
be mandatorily redeemable or
convertible into debt, and will
provide that no dividends (other
than in the form of additional
equity securities) shall be
payable, in each case, until
after the termination of the
Facilities. Such right may not be
exercised in more than two
consecutive quarters or more than
three times in the aggregate
during the term of the
Facilities. The proceeds of any
such equity securities, to the
extent used to cure any such
financial maintenance covenant,
shall not be included in the
calculation of "Additional
Capital" except under
circumstances to be agreed.
Voting: Amendments and waivers with
respect to the Credit
Documentation shall require the
approval of Lenders holding a
majority of the commitments (or,
with respect to any Facility, if
the commitments under such
Facility have expired, the loans
outstanding under such Facility)
under the Facilities (the
"Required Lenders"), except that
(a) the consent of each Lender
directly affected thereby shall
be required with respect to (i)
reductions in the amount or
extensions of the scheduled
17
26
date
of amortization or final maturity
of any Loan, (ii) reductions in
the rate of interest or any fee
or extensions of any due date
thereof, (iii) in creases in the
amount or extensions of the
expiry date of any Lender's
commitment and (iv) release of
all or substantially all of the
collateral, if any, or the
guarantors referred to above and
(b) the consent of 100% of the
Lenders shall be required with
respect to modifications to any
of the voting percentages.
Assignments
and Participations: The Lenders shall be permitted to
assign and sell participations in
their Loans and commitments,
subject, in the case of
assignments (other than to
another Lender or to an affiliate
of a Lender), to the consent of
the Administrative Agent, the
Issuers and, except during the
continuance of an event of
default, the Borrower (which
consent in each case shall not be
unreasonably withheld). Lenders
shall pay the Administrative
Agent a fee of $3,500 for each
assignment of Loans and
commitments hereunder. In the
case of partial assignments
(other than to another Lender or
to an affiliate of a Lender), the
minimum assignment amount shall
be $5,000,000 unless other wise
agreed by the Borrower and the
Administrative Agent.
Participants shall have the same
benefits as the Lenders with
respect to yield protection and
in creased cost provisions.
Voting rights of participants
shall be limited to those matters
with respect to which the
affirmative vote of the Lender
from which it purchased its
participation would be required
as described under "Voting"
above. Pledges of loans in
accordance with applicable law
shall be permitted without
restriction. Promissory notes
shall be issued under the
Facilities only upon request.
Yield Protection: The Credit Documentation shall
contain customary provisions (a)
protecting the Lenders against in
creased costs or loss of yield
resulting from changes in
reserve, tax, capital adequacy
and other requirements of
18
27
law and from the imposition of or
changes in withholding or other
taxes and (b) indemnifying the
Lenders for "breakage costs"
incurred in connection with,
among other things, any
prepayment of a Euro dollar Loan
(as defined in Annex I) on a day
other than the last day of an
interest period with respect
thereto.
Expenses and
Indemnification: The Borrower shall pay (a) all
reasonable out-of-pocket
expenses of the Administrative
Agent, the Syndication Agent and
the Arrangers associated with the
syndication of the Facilities and
the preparation, execution,
delivery and administration of
the Credit Documentation and any
amendment or waiver with respect
thereto (including the reasonable
fees, disbursements and other
charges of a single counsel (plus
any local or specialized
counsel)), (b) fees pay able by
the Administrative Agent, the
Syndication Agent or to third
parties in connection with the
satisfaction of the conditions
precedent referred to above,
regardless of whether the Credit
Documentation is signed and (c)
all out-of-pocket expenses of the
Administrative Agent, the
Syndication Agent and the Lenders
(including the fees,
disbursements and other charges
of counsel) in connection with
the enforcement of the Credit
Documentation.
The Administrative Agent, the
Syndication Agent, the Arrangers
and the Lenders (and their
affiliates and their respective
officers, directors, employees,
advisors and agents) will have
no liability for, and will be
indemnified and held harmless
against, any loss, liability,
cost or expense incurred in
respect of the financing
contemplated hereby or the use or
the pro posed use of the proceeds
thereof (except to the extent
resulting from the gross
negligence or willful misconduct
of the indemnified party).
Governing Law and Forum: State of New York.
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Counsel to the Administrative
Agent, the Syndication
Agent and Arrangers: Xxxxx Xxxx & Xxxxxxxx.
Definitions: Additional Capital = proceeds of
equity issuances by Holdings
(including the Equity Issuance) +
proceeds of offerings of debt
securities by Holdings (including
the Notes Offering) + proceeds of
Qualifying Subordinated Debt
issued after the Closing Date +
excess cash flow for fiscal years
from and after 2001 (to the
extent not required to be applied
to prepay the Facilities) -
$2,775,000,000 - any proceeds of
equity issuances used to cure
breaches of financial maintenance
covenants as provided under
"Financial Covenant Default Cure
Provisions" above, except under
circumstances to be agreed.
Adjusted EBITDA = EBITDA +
trailing four quarter dark fiber
sales cash revenues.
Contributed Capital = equity
contributed by Parent + Equity
Issuance cash proceeds + other
cash equity proceeds + Total Debt
EBITDA = net income + interest
expense (including the interest
component of rental expense under
the ADP) + income taxes +
depreciation and amortization
expense + non-cash extraordinary
or non-recurring charges - dark
fiber sales gains - amounts
attributable to affiliates that
are not consolidated restricted
subsidiaries (except to the
extent such amounts are received
in cash by the Borrower or a
consolidated restricted
subsidiary of the Borrower) -
extraordinary or non-recurring
gains.
Interest Expense = net cash
interest expense and the interest
component of rental expense under
the ADP.
Qualifying Subordinated Debt =
debt of Holdings (other than the
High Yield Notes) that matures at
least
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29
one year after the final maturity
of the Facilities, the terms and
conditions of which are
satisfactory to the Arrangers.
Senior Debt = Intercompany Note,
debt under the Facilities, any
other senior debt of the Borrower
and its restricted subsidiaries
and all outstandings under the
ADP, net of unrestricted cash and
cash equivalents in excess of
$10,000,000.
Total Debt = all debt of Holdings
and its restricted subsidiaries
and all outstandings under the
ADP, net of unrestricted cash and
cash equivalents in excess of
$10,000,000.
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30
Annex I
Interest and Certain Fees
Interest Rate Options: The Borrower may elect that the
loans under each Facility
comprising each borrowing bear
interest at a rate per annum
equal to:
the ABR plus the Applicable
Margin (such loans, "ABR Loans");
or
the Adjusted LIBO Rate plus the
Applicable Margin (such loans,
"Eurodollar Loans");
provided that upon the occurrence
and during the continuance of a
default, only ABR Loans will be
available and provided further
that Swingline Loans shall only
bear interest based upon the ABR.
As used herein:
"ABR" means the higher of (i) the
rate of interest publicly
announced by the Administrative
Agent from time to time as its
prime rate in effect at its
principal office in Dallas, Texas
(the "Prime Rate") and (ii) the
federal funds effective rate from
time to time plus 0.5%.
"Adjusted LIBO Rate" means the
LIBO Rate, as adjusted for
statutory reserve requirements
for eurocurrency liabilities.
"Applicable Margin" has the
meaning set forth on Schedule I
hereto.
"LIBO Rate" means the rate at
which eurodollar deposits in the
London interbank market for one,
two, three or six months (as
selected by the Borrower) are
quoted on the Telerate screen.
Interest Payment Dates: In the case of ABR Loans,
quarterly in arrears.
31
In the case of Eurodollar Loans,
on the last day of each relevant
interest period and, in the case
of any interest period longer
than three months, on each
successive date three months
after the first day of such
interest period.
Commitment Fee: The Borrower shall pay a
commitment fee to the
Administrative Agent for the
account of the Lenders ratably in
accordance with their commitments
under each of the Facilities,
from and after the Closing Date,
on the average daily amount of
the unused (other than for
Swingline Loans) commitments
under each of the Facilities.
Such commitment fees shall be
payable quarterly in arrears and,
with respect to the commitments
under any Facility, on the date
of termination of such
commitments. The rate at which
such commitment fees accrue will
be:
--------------------------------------------------
USAGE OF FACILITIES COMMITMENT FEE
--------------------------------------------------
Less than 33.3% 1.00%
--------------------------------------------------
Less than 66.6% but equal
to or greater than 33.3% .75%
--------------------------------------------------
Equal to or greater than 66.6% .50%
--------------------------------------------------
Letter of Credit Fees: The Borrowers shall pay a
commission on the undrawn amount
of all outstanding Letters of
Credit at a per annum rate equal
to the Applicable Margin then in
effect with respect to Eurodollar
Loans that are Revolving Loans.
Such commission shall be shared
ratably among the Lenders with
commitments under the Revolving
Facility in proportion to such
commitments and shall be payable
quarterly in arrears and on the
date of termination of such
commitments.
A fronting fee, calculated at a
rate per annum to be agreed
between the Borrower and the
applicable Issuer on the face
amount of each Letter of Credit
shall be payable quarterly in
arrears to such Issuer for its
own account. In addition,
customary administrative,
issuance, amendment, payment and
negotiation
2
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charges shall be payable to the
applicable Issuer for its own
account.
Default Rate: At any time when the Borrower is
in default in the payment of any
amount of principal due under the
Facilities, such amount shall
bear interest (i) in respect of
ABR Loans, at a rate per annum
equal to the sum of 2% plus the
highest Applicable Margin for ABR
Loans plus the ABR and (ii) in
respect of Eurodollar Loans, at a
rate per annum equal to the
higher of (x) 2% plus the highest
Applicable Margin for Eurodollar
Loans plus the LIBO Rate
applicable to such Loan on the
day before payment was due and
(y) the sum of 2% plus the
highest Applicable Margin for
ABR Loans plus the ABR. Overdue
interest, fees and other amounts
shall bear interest at 2% plus
the highest Applicable Margin
for ABR Loans that are Revolving
Loans plus the ABR.
Rate and Fee Basis: All per annum rates shall be
calculated on the basis of a year
of 360 days (or 365/366 days, in
the case of ABR Loans the
interest rate payable on which is
then based on the Prime Rate) for
actual days elapsed.
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Schedule I
"Applicable Margin" means, for any day, (i) the applicable rate per
annum set forth below under the caption "Eurodollar Spread" or "ABR Spread," as
the case may be, based upon the ratings by S&P and Xxxxx'x, respectively,
applicable on such date to the Facilities plus (ii) the applicable rate per
annum set forth below under the caption "Leverage Premium," unless the ratio of
Total Debt to Adjusted EBITDA, as determined by reference to the financial
statements delivered to the Administrative Agent in respect of the most recently
ended fiscal quarter of the Borrower is less than 6:00 to 1:00:
===================================================================================================================
INDEX DEBT RATING EURODOLLAR SPREAD ABR SPREAD LEVERAGE PREMIUM
-------------------------------------------------------------------------------------------------------------------
LEVEL I BBB- and Baa3 or higher 1.00% 0.00% 0.25%
-------------------------------------------------------------------------------------------------------------------
LEVEL II BB+ and Ba1 1.375% 0.375% 0.25%
-------------------------------------------------------------------------------------------------------------------
LEVEL III BB and Ba2 1.75% 0.75% 0.25%
-------------------------------------------------------------------------------------------------------------------
LEVEL IV BB- and Ba3 2.00% 1.00% 0.25%
-------------------------------------------------------------------------------------------------------------------
LEVEL V Lower than BB- or lower than Ba3 2.25% 1.25% 0.25%
===================================================================================================================
For purposes of the foregoing, (i) if neither S&P nor Xxxxx'x shall
have in effect a rating for the Facilities (other than by reason of the
circumstances referred to in the last sentence of this definition), then the
Applicable Margin shall be the rate set forth in Level V, (ii) if either S&P or
Xxxxx'x, but not both S&P and Xxxxx'x, shall have in effect a rating for the
Facilities, then the Applicable Margin shall be based on such rating, (iii) if
the ratings established by S&P and Xxxxx'x for the Facilities shall fall within
different Levels, then the Applicable Margin shall be based on the lower of the
two ratings, (iv) if the ratings established by S&P and Xxxxx'x for the
Facilities shall fall within the same Level, then the Applicable Margin shall be
based on that Level and (v) if the ratings established by S&P and Xxxxx'x for
the Facilities shall be changed (other than as a result of a change in the
rating system of S&P or Xxxxx'x), such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Margin shall apply (other than with respect to the Leverage
Premium or as described in the immediately succeeding sentence) during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of S&P or Xxxxx'x shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable
4
34
Margin shall be determined by reference to the rating most recently in effect
prior to such change or cessation.
5
