<PAGE>
EXHIBIT 10.3
LOAN AND SECURITY AGREEMENT
by and among
US LEC CORP.,
as Borrower
and
US LEC of North Carolina Inc.
US LEC of Tennessee Inc.
US LEC of Georgia Inc.
US LEC of South Carolina Inc.
US LEC of Florida Inc.
US LEC of Virginia L.L.C.
US LEC of Alabama Inc.
US LEC of Pennsylvania Inc.
US LEC of Maryland Inc.
US LEC Communications Inc.
US LEC Acquisition Co.
US LEC of New York Inc.,
as Guarantors
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Lender
and
Dated: October 25, 2005
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TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS............................................................................................1
SECTION 2. CREDIT
FACILITIES.....................................................................................44
2.1 Revolving
Loans................................................................................44
2.2 Increase
of the Facility Maximum
Credit........................................................45
SECTION 3. INTEREST AND
FEES.....................................................................................46
3.1
Interest.......................................................................................46
3.2 Closing
Fee....................................................................................48
3.3 Unused
Line
Fee................................................................................48
3.4 Changes in
Laws and Increased Costs of Revolving
Loans.........................................48
SECTION 4. CONDITIONS
PRECEDENT..................................................................................50
4.1 Conditions
Precedent to Initial Revolving
Loans................................................50
4.2 Conditions
Precedent to All Revolving
Loans....................................................52
SECTION 5. GRANT AND PERFECTION OF SECURITY
INTEREST.............................................................53
5.1 Grant of
Security
Interest.....................................................................53
5.2 Perfection
of Security
Interests...............................................................54
SECTION 6. COLLECTION AND
ADMINISTRATION.........................................................................59
6.1 Borrower's
Revolving Loan
Accounts.............................................................59
6.2
Statements.....................................................................................59
6.3 Collection
of
Accounts.........................................................................59
6.4
Payments.......................................................................................60
6.5
Authorization to Make Revolving
Loans..........................................................61
6.6 Use of
Proceeds................................................................................61
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(ii)
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SECTION 7. COLLATERAL REPORTING AND
COVENANTS....................................................................62
7.1 Collateral
Reporting...........................................................................62
7.2 Accounts
Covenants.............................................................................63
7.3 Inventory
Covenants............................................................................64
7.4 Equipment
and Real Property
Covenants..........................................................64
7.5 Power of
Attorney..............................................................................64
7.6 Right to
Cure..................................................................................65
7.7 Access to
Premises.............................................................................66
SECTION 8. REPRESENTATIONS AND
WARRANTIES........................................................................66
8.1 Corporate
Existence, Power and
Authority.......................................................66
8.2 Name;
State of Organization; Chief Executive Office; Collateral
Locations......................67
8.3 Financial
Statements; No Material Adverse
Change...............................................67
8.4 Priority
of Liens; Title to
Properties.........................................................68
8.5 Tax
Returns....................................................................................68
8.6
Litigation.....................................................................................68
8.7 Compliance
with Other Agreements and Applicable
Laws...........................................68
8.8
Environmental
Compliance.......................................................................69
8.9 Employee
Benefits..............................................................................70
8.10
Bank
Accounts..................................................................................71
8.11
Intellectual
Property..........................................................................71
8.12
Subsidiaries; Affiliates; Capitalization;
Solvency.............................................71
8.13
Labor
Disputes.................................................................................72
8.14
Restrictions on
Subsidiaries...................................................................72
8.15
Material
Contracts.............................................................................73
8.16
Payable
Practices..............................................................................73
8.17
Carrier Service Agreements, IRU Agreements and Interconnection
Agreements......................73
8.18
Billing Processor
Agreements...................................................................74
8.19
Governmental
Authorizations....................................................................74
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(iii)
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8.20
No Regulatory
Event............................................................................75
8.21
Trade
Relations................................................................................75
8.22
Interrelated
Businesses........................................................................75
8.23
Accuracy and Completeness of
Information.......................................................75
8.24 Survival of
Warranties;
Cumulative.............................................................76
SECTION 9. AFFIRMATIVE AND NEGATIVE
COVENANTS....................................................................76
9.1
Maintenance of
Existence.......................................................................76
9.2 New
Collateral
Locations.......................................................................76
9.3 Compliance
with Laws, Regulations,
Etc.........................................................77
9.4 Payment of
Taxes and
Claims....................................................................77
9.5
Insurance......................................................................................78
9.6 Financial
Statements and Other
Information.....................................................79
9.7 Limitation
on Asset
Sales......................................................................81
9.8
Encumbrances...................................................................................82
9.9
Indebtedness...................................................................................83
9.10
Merger,
Consolidation..........................................................................84
9.11
Limitation on Restricted
Payments..............................................................86
9.12
Transactions with
Affiliates...................................................................88
9.13
Compliance with
ERISA..........................................................................89
9.14
End of Fiscal Years; Fiscal
Quarters...........................................................89
9.15
Change in
Business.............................................................................89
9.16
Limitation of Restrictions Affecting
Subsidiaries..............................................90
9.17
Minimum Consolidated Cash
Flow.................................................................90
9.18
License
Agreements.............................................................................91
9.19
Foreign Assets Control Regulations,
Etc........................................................91
9.20
Carrier Service Agreements; Interconnection Agreements; IRU
Agreements.........................92
9.21 Billing Processor
Agreements...................................................................93
9.22
Senior Secured Note Permitted Indebtedness
Limit...............................................94
9.23
Modifications of Indebtedness, Organizational Documents and Certain
Other
Agreements; Certain Payments of Indebtedness,
Etc..............................................94
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(iv)
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9.24
Costs and
Expenses.............................................................................95
9.25
Further
Assurances.............................................................................96
SECTION 10. EVENTS OF DEFAULT AND
REMEDIES.......................................................................97
10.1
Events of
Default..............................................................................97
10.2
Remedies.......................................................................................99
SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS;
GOVERNING LAW........................................102
11.1
Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.........................102
11.2
Waiver of
Notices.............................................................................104
11.3
Amendments and
Waivers........................................................................104
11.4
Intentionally
Deleted.........................................................................104
11.5
Indemnification...............................................................................104
SECTION 12. TERM OF AGREEMENT;
MISCELLANEOUS....................................................................105
12.1
Term..........................................................................................105
12.2
Interpretative
Provisions.....................................................................106
12.3
Notices.......................................................................................108
12.4
Partial
Invalidity............................................................................109
12.5
Successors....................................................................................109
12.6
Confidentiality...............................................................................109
12.7
Entire
Agreement..............................................................................111
12.8
USA Patriot
Act...............................................................................111
12.9
Counterparts,
Etc.............................................................................111
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(v)
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INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A
Information Certificate
Exhibit B
Form of Compliance Certificate
Exhibit 1.16
Borrowing Base Certificate
Exhibit C
Form of Notice of Borrowing
Schedule 1.79
Initial Pledged Interests
Schedule 1.80
Initial Pledged Shares
Schedule 1.83
Intercompany Notes
Schedule 8.17(a)(i)
Carrier Out Agreements
Schedule 8.17(a)(ii)
Carrier In Agreements
Schedule 8.17(b)
Interconnection Agreements
Schedule 8.18
Billing Processor Agreements
Schedule 8.19
Governmental Authorizations
Schedule 9.8
Existing Liens
Schedule 1.139
Senior Secured Note Documents
Schedule 1.147
Merger Entities
(vi)
<PAGE>
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated October 25, 2005 (the
"Agreement") is entered into by and among Wachovia Bank, National
Association, a
national banking association ("Lender" as hereinafter further
defined) and US
LEC Corp., a Delaware corporation ("Borrower"), US LEC of North
Carolina Inc., a
North Carolina corporation ("USNC"; US LEC of Tennessee Inc., a
Delaware
corporation ("USTN"); US LEC of Georgia Inc., a Delaware
corporation ("USGA");
US LEC of South Carolina Inc., a Delaware corporation ("USSC"), US
LEC of
Florida Inc., a North Carolina corporation ("USFL"); US LEC of
Virginia L.L.C.,
a Delaware limited liability company ("USVA"); US LEC of Alabama
Inc., a North
Carolina corporation ("USAL"); US LEC of Pennsylvania Inc., a North
Carolina
corporation ("USPA"); US LEC of Maryland Inc., a North Carolina
corporation
("USMD"); US LEC Communications Inc., a North Carolina corporation
("USComm");
US LEC Acquisition Co., a North Carolina corporation ("US-AC"), and
US LEC of
New York Inc., North Carolina corporation ("USNY" and together with
USNC, USTN,
USGA, USSC, USFL, USVA, USAL, USPA, USMD, USComm and US-AC, each
individually a
"Guarantor" and collectively, "Guarantors" as hereinafter further
defined).
WITNESSETH:
WHEREAS, Borrower and Guarantors have requested that Lender enter
into
financing arrangements with Borrower pursuant to which Lender may
make Revolving
Loans and provide other financial accommodations to Borrower;
WHEREAS, under the terms of the Senior Secured Note Documents
this
Agreement will be deemed a "Credit Facility" (as such term is
defined in the
Senior Secured Note Indenture as in effect on the date hereof);
and
WHEREAS, Lender is willing to agree to make such Revolving Loans
and
provide such financial accommodations on the terms and conditions
set forth
herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable
consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto
agree as follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement, the following terms shall have
the
respective meanings given to them below:
1.1 "Accounts" shall have the meaning ascribed to such term in the
UCC.
1.2 "Acquired Indebtedness" means Indebtedness of a Person or any
of
its Subsidiaries existing at the time such Person becomes a
Subsidiary of
Borrower or at the time it merges or consolidates with or into
Borrower or any
of its Restricted Subsidiaries or assumed in
<PAGE>
connection with the acquisition of assets from such Person and in
each case not
incurred by such Person in connection with, or in anticipation or
contemplation
of, such Person becoming a Restricted Subsidiary of Borrower or
such
acquisition, merger or consolidation.
1.3 "Additional Pledged Interests" shall mean, collectively,
with
respect to Borrower and each Guarantor, (i) all options, warrants,
rights,
agreements, additional membership, partnership or other equity
interests of
whatever class of any issuer of Initial Pledged Interests or any
interest in any
such issuer, together with all rights, privileges, authority and
powers of
Borrower or such Guarantor relating to such interests in each such
issuer or
under any organizational document of any such issuer, and the
certificates,
instruments and agreements representing such membership,
partnership or other
interests and any and all interest of Borrower or such Guarantor in
the entries
on the books of any financial intermediary pertaining to such
membership,
partnership or other equity interests from time to time acquired by
Borrower or
such Guarantor in any manner and (ii) all membership, partnership
or other
equity interests, as applicable, of each limited liability company,
partnership
or other entity (other than a corporation) hereafter acquired or
formed by
Borrower or such Guarantor and all options, warrants, rights,
agreements,
additional membership, partnership or other equity interests of
whatever class
of such limited liability company, partnership or other entity,
together with
all rights, privileges, authority and powers of Borrower or such
Guarantor
relating to such interests or under any Organizational Document of
any such
issuer, and the certificates, instruments and agreements
representing such
membership, partnership or other equity interests and any and all
interest of
Borrower or such Guarantor in the entries on the books of any
financial
intermediary pertaining to such membership, partnership or other
interests, from
time to time acquired by Borrower or such Guarantor in any
manner.
1.4 "Additional Pledged Shares" shall mean, collectively, with
respect
to Borrower and each Guarantor, (i) all options, warrants, rights,
agreements,
additional shares of capital stock of whatever class of any issuer
of the
Initial Pledged Shares or any other equity interest in any such
issuer, together
with all rights, privileges, authority and powers of Borrower and
such Guarantor
relating to such interests issued by any such issuer under any
organizational
document of any such issuer, and the certificates, instruments and
agreements
representing such interests and any and all interest of Borrower
and such
Guarantor in the entries on the books of any financial intermediary
pertaining
to such interests, from time to time acquired by in any manner and
(ii) all the
issued and outstanding shares of capital stock of each corporation
hereafter
acquired or formed by Borrower or such Guarantor and all options,
warrants,
rights, agreements or additional shares of capital stock of
whatever class of
such corporation, together with all rights, privileges, authority
and powers of
Borrower or such Guarantor relating to such shares or under any
Organizational
Document of such corporation, and the certificates, instruments and
agreements
representing such shares and any and all interest of Borrower or
such Guarantor
in the entries on the books of any financial intermediary
pertaining to such
shares, from time to time acquired by Borrower or such Guarantor in
any manner.
1.5 "Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for
2
<PAGE>
any Eurodollar Rate Loan comprising part of the same borrowing
(including
conversions, extensions and renewals), the rate per annum
determined by dividing
(a) the London Interbank Offered Rate for such Interest Period by
(b) a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage.
For purposes
hereof, "Reserve Percentage" shall mean for any day, that
percentage (expressed
as a decimal) which is in effect from time to time under Regulation
D of the
Board of Governors of the Federal Reserve System (or any
successor), as such
regulation may be amended from time to time or any successor
regulation, as the
maximum reserve requirement (including, without limitation, any
basic,
supplemental, emergency, special, or marginal reserves) applicable
with respect
to Eurocurrency liabilities as that term is defined in Regulation D
(or against
any other category of liabilities that includes deposits by
reference to which
the interest rate of Eurodollar Loans is determined), if Lender has
any
Eurocurrency liabilities subject to such reserve requirement.
Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be
deemed subject to reserve requirements without benefits of credits
for
proration, exceptions or offsets that may be available from time to
time to
Lender. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as
of the effective date of any change in the Reserve Percentage.
1.6 "Affiliate" means, with respect to any specified Person, any
other
Person who directly or indirectly through one or more
intermediaries controls,
or is controlled by, or is under common control with, such
specified Person. The
term "control" means the possession, directly or indirectly, of the
power to
direct or cause the direction of the management and policies of a
Person,
whether through the ownership of voting securities, by contract or
otherwise;
and the terms "controlling" and "controlled" have meanings
correlative of the
foregoing. A Person shall not be deemed an "Affiliate" of Borrower
or any of its
Subsidiaries solely as a result of such Person being a joint
venture partner of
Borrower or any of its Subsidiaries.
1.7 "Asset Acquisition" means (a) an Investment by Borrower or
any
Restricted Subsidiary of Borrower in any other Person pursuant to
which such
Person shall become a Restricted Subsidiary of Borrower or any
Restricted Subsidiary
of Borrower, or shall be merged with or into Borrower
(with Borrower as the surviving entity) or any Restricted
Subsidiary of
Borrower, or (b) the acquisition by Borrower or any Restricted
Subsidiary of
Borrower of the assets of any Person (other than a Restricted
Subsidiary of
Borrower) which constitute all or substantially all of the assets
of such Person
or comprise any division or line of business of such Person or any
other
properties or assets of such Person other than in the ordinary
course of
business.
1.8 "Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered
into in the
ordinary course of business), assignment or other transfer for
value by Borrower
or any of its Subsidiaries (including any sale and leaseback
transaction but
excluding the grant of any Permitted Lien or other Lien permitted
in accordance
with Section 9.8 hereof) to any Person other than Borrower or a
Wholly Owned
Restricted Subsidiary of Borrower that is a Borrower or Guarantor
of: (a) any
Capital Stock of any Restricted Subsidiary of Borrower; or (b) any
other
property or assets of Borrower or any
3
<PAGE>
Restricted Subsidiary of Borrower other than in the ordinary course
of business;
provided, that, Asset Sales shall not include: (i) a transaction or
series of
related transactions for which Borrower or its Subsidiaries receive
aggregate
consideration of less than $1,000,000; (ii) the sale, lease,
conveyance,
disposition or other transfer of all or substantially all of the
assets of
Borrower pursuant to a merger or consolidation permitted under the
terms of this
Agreement; (iii) any Restricted Payment permitted by Section 9.11
or that
constitutes a Permitted Investment; (iv) the sale or discount, in
each case
without recourse, of Receivable arising in the ordinary course of
business or
related to a bankruptcy claim, but only in connection with the
compromise or
collection thereof; (v) disposals or replacements of (A) obsolete
or worn out
equipment and (B) fixtures on real property that are no longer used
or useful in
the business of Borrower or its Subsidiaries; (vi) the good faith
surrender or
waiver of contract rights or the settlement, release or surrender
of claims of
any kind.
1.9 "Authorized Officer" shall mean a Responsible Officer or
Treasury
Manager of Borrower.
1.10 "Billing Processor" shall mean any third party servicing
or
processing agent or intermediary who facilitates, services,
processes or manages
the billing transfer and/or payment procedures with respect to any
services
provided by Borrower to its customers through a Carrier or
otherwise. The term
"Billing Processor" shall not include collection agencies, merchant
accounts,
Credit Card Processors, lockbox accounts or printers of
invoices.
1.11 "Billing Processor Acknowledgments" shall mean, individually
and
collectively, in form and substance reasonably satisfactory to
Agent, by any
Billing Processor in favor of Lender, as the same may from time to
time exist or
be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.12 "Billing Processor Agreements" shall mean all agreements
(other
than Billing Processor Acknowledgments) now existing or hereafter
entered into
by Borrower with any Billing Processor, in its capacity as such, as
the same now
exist or may hereafter be amended, modified, supplemented,
extended, renewed,
restated or replaced, including without limitation, the agreements
listed on
Schedule 8.18 hereto.
1.13 "Blocked Accounts" shall have the meaning set forth in Section
6.3
hereof.
1.14 "Borrower" shall mean, US LEC Corp., a Delaware corporation,
and
its successors and assigns.
1.15 "Borrowing Base" shall mean, at any time, the amount equal to:
(a)
eighty-five (85%) percent of the Eligible Accounts of Borrower
minus (b)
Reserves.
1.16 "Borrowing Base Certificate" shall mean a report substantially
in
the form of Exhibit 1.16 hereto, as the same may from time to time
be modified
by Lender in consultation with Borrower, which is duly completed
and executed by
a Responsible Officer of Borrower and delivered to Lender.
4
<PAGE>
1.17 "Business Day" shall mean any day other than a Saturday,
Sunday,
or other day on which commercial banks are authorized or required
to close under
the laws of the State of New York or the State of North Carolina,
and a day on
which Lender is open for the transaction of business, except that
if a
determination of a Business Day shall relate to any Eurodollar Rate
Loans, the
term Business Day shall also exclude any day on which banks are
closed for
dealings in dollar deposits in the London interbank market or other
applicable
Eurodollar Rate market.
1.18 "Capitalized Lease Obligations" means, as to any Person,
the
obligations of such Person under a lease that are required to be
classified and
accounted for as capital lease obligations under GAAP and, for
purposes of this
definition, the amount of such obligations at any date shall be the
capitalized
amount of such obligations at such date, determined in accordance
with GAAP.
1.19 "Capital Stock" shall mean, with respect to any Person, any
and
all shares, interests, participations or other equivalents (however
designated)
of such Person's capital stock or partnership, limited liability
company or
other equity interests at any time outstanding, and any and all
rights, warrants
or options exchangeable for or convertible into such capital stock
or other
interests (but excluding any debt security that is exchangeable for
or
convertible into such capital stock).
1.20 "Carrier Accounts" shall mean Accounts owing by Carriers
arising
from the sale by Borrower or its Subsidiaries to such Carriers
of
telecommunication services pursuant to the Carrier Service
Agreements or
otherwise.
1.21 "Carriers" shall mean, collectively, telecommunication
interexchange carriers or other providers of telecommunications
long distance
services and local exchange companies or other providers of
local
telecommunications service, including without limitation, AT&T,
MCI, Verizon,
Bell South, Sprint, SBC or Qwest, sometimes being referred to
herein
individually as a "Carrier".
1.22 "Carrier Service Agreements" shall mean, collectively, the
Carrier-In Service Agreements and the Carrier-Out Service
Agreements, sometimes
being referred to herein individually as a "Carrier Service
Agreement".
1.23 "Carrier-In Service Agreements" shall mean, collectively,
the
agreements, including, Interconnection Agreements, between Borrower
or any
Guarantor and Carriers in the ordinary course of the business of
Borrower and
Guarantors providing for the purchase by Borrower or such Guarantor
from such
Carrier, of telecommunication services, sometimes being referred to
herein
individually as a "Carrier-In Service Agreement".
1.24 "Carrier-Out Service Agreements" shall mean, collectively,
the
agreements between Borrower or any Guarantor and Carriers in the
ordinary course
of the business of
5
<PAGE>
Borrower and Guarantors providing for the sale by Borrower or such
Guarantor to
such Carrier, of telecommunication services, sometimes being
referred to herein
individually as a "Carrier-Out Service Agreement."
1.25 "Cash Dominion Event" shall mean the occurrence of any of
the
following: (a) an Event of Default shall exist or have occurred and
be
continuing, or (b) any three (3) consecutive business days on which
Cash
Dominion Excess Availability is less than $5,000,000 which Cash
Dominion Event
shall be deemed to continue until such time as a Cash Dominion
Reversion Date
occurs.
1.26 "Cash Dominion Excess Availability" shall mean, the amount,
as
determined by Lender, calculated at any date, equal to: (a) the
lesser of: (i)
the Borrowing Base or (ii) the Maximum Credit plus (b) Qualified
Cash minus (c)
the principal amount of all then outstanding Revolving Loans.
1.27 "Cash Dominion Reversion Date" shall mean, during the any
Cash
Dominion Event described in Section 1.25 hereof, the sixtieth
(60th) consecutive
date that Cash Dominion Excess Availability has been equal to or
greater than
$5,000,000.
1.28 "Cash Equivalents" means:
(a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or
issued by any
agency thereof and backed by the full faith and credit of the
United States, in
each case maturing within one year from the date of acquisition
thereof; (b)
marketable direct obligations issued by any state of the United
States of
America or any political subdivision of any such state or any
public
instrumentality thereof maturing within one year from the date of
acquisition
thereof and, at the time of acquisition, having one of the two
highest ratings
obtainable from either S&P or Moody's; (c) commercial paper
maturing no more
than one year from the date of creation thereof and, at the time of
acquisition,
having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (d)
certificates of deposit or bankers' acceptances maturing within one
year from
the date of acquisition thereof issued by any bank organized under
the laws of
the United States of America or any state thereof or the District
of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition
thereof
combined capital and surplus of not less than $250,000,000; (e)
repurchase
obligations with a term of not more than seven days for underlying
securities of
the types described in clause (a) above entered into with any bank
meeting the
qualifications specified in clause (d) above; and (f)investments in
money market
funds that invest substantially all their assets in securities of
the types
described in clauses (a) through (e) above.
1.29 "Change of Control" means the occurrence of one or more of
the
following events:
(a) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of
the assets of Borrower to any Person or group of
6
<PAGE>
related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group"),
together with any Affiliates thereof (whether or not otherwise in
compliance
with the provisions of this Agreement), other than to Permitted
Holders;
(b) the approval by the holders of Capital Stock of Borrower
of any plan or proposal for the liquidation or dissolution of
Borrower (whether
or not otherwise in compliance with the provisions of this
Agreement);
(c) any Person or Group (other than one or more Permitted
Holders or any entity formed for the purpose of owning Capital
Stock of
Borrower) shall become the owner, directly or indirectly,
beneficially or of
record, of shares representing more than 50% of the aggregate
ordinary voting
power represented by the issued and outstanding Capital Stock of
Borrower; or
(d) the replacement of a majority of the Board of Directors of
Borrower over a two-year period from the directors who constituted
the Board of
Directors of Borrower at the beginning of such period, and such
replacement
shall not have been approved by a vote of either (i) the Permitted
Holders or
(ii) a majority of the Board of Directors of Borrower then still in
office who
either were members of such Board of Directors at the beginning of
such period
or whose election as a member of such Board of Directors was
previously so
approved pursuant to clause (a) above or this clause (d).
1.30 "Code" shall mean the Internal Revenue Code of 1986, as the
same
now exists or may from time to time hereafter be amended, modified,
recodified
or supplemented, together with all rules, regulations and
interpretations
thereunder or related thereto.
1.31 "Collateral" shall have the meaning set forth in Section 5
hereof.
1.32 "Collateral Access Agreement" shall mean an agreement in
writing,
in form and substance satisfactory to Lender, from the lessor of
Borrower's and
each Guarantor's principal executive office.
1.33 "Commodity Accounts" shall mean, collectively, with respect
to
Borrower and each Guarantor, all "commodity accounts" as such term
is defined in
the UCC other than any Excluded Accounts.
1.34 "Communications Act" shall mean the Communications Act of
1934, as
the same now exists or may from time to time hereafter be amended
(and including
as amended pursuant to the Telecommunications Act of 1996),
modified, recodified
or supplemented, together with all rules, regulations and
interpretations
thereunder or related thereto.
1.35 "Communications Laws" shall mean the Communications Act and
any
similar or successor Federal statute or statutes and any applicable
State or
foreign law governing the provision of telecommunications services,
as the same
now exist or may from time to time
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hereafter be amended, modified, recodified or supplemented,
together with all
rules and regulations thereunder or related thereto.
1.36 "Communications Regulatory Authority" shall mean the FCC, any
PUC
and any future federal, state or local communications regulatory
commission,
agency, department board or authority.
1.37
"Consolidated Cash Flow" means, with respect to any Person, for
any period, the sum (without duplication) of: (a) Consolidated Net
Income; and
(b) to the extent Consolidated Net Income has been reduced thereby:
(i) all
income taxes of such Person and its Restricted Subsidiaries, paid
or accrued in
accordance with GAAP for such period (other than income taxes
attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes
attributable to
sales or dispositions outside the ordinary course of business);
(ii)
Consolidated Interest Expense; and(iii) Consolidated Non-cash
Charges less any
non-cash items increasing Consolidated Net Income for such period,
all as
determined on a consolidated basis for such Person and its
Restricted
Subsidiaries in accordance with GAAP. The calculation of
Consolidated Cash Flow
shall exclude any non-cash, non-recurring charges related to
inter-carrier
compensation disputes and receivables as they relate to revenues
and profits for
periods before the period being measured.
1.38 "Consolidated Interest Expense" means, with respect to any
Person
for any period, the sum of, without duplication: (a) the aggregate
of the
interest expense of such Person and its Restricted Subsidiaries for
such period
determined on a consolidated basis in accordance with GAAP,
including without
limitation: (i) any amortization of debt discount and amortization
or write-off
of deferred financing costs (other than write-offs made in
connection with the
issuance of the Senior Secured Notes on September 30, 2004); (ii)
the net costs
under Interest Swap Obligations; (iii) all capitalized interest;
and (iv) the
interest portion of any deferred payment obligation; and (b) the
interest
component of Capitalized Lease Obligations paid or accrued by such
Person and
its Restricted Subsidiaries during such period as determined on a
consolidated
basis in accordance with GAAP; provided, that, there shall be
excluded therefrom
any non-cash amortization or write-off of fees and expenses
incurred in
connection with the issuance of the Senior Secured Notes and the
negotiation and
execution of this Agreement and the other Financing Agreements.
1.39 "Consolidated Net Income" means, with respect to any Person,
for
any period, the aggregate net income (or loss) of such Person and
its Restricted
Subsidiaries for such period on a consolidated basis, determined in
accordance
with GAAP; provided, that, there shall be excluded therefrom
without
duplication:
(1) after-tax gains and losses from Asset Sales (without regard to
the
$1,000,000 limitation set forth in the definition thereof) or
abandonments or
reserves relating thereto;
(2) after-tax items classified as extraordinary or nonrecurring
gains;
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(3) the net income (but not loss) of any Restricted Subsidiary of
the
referent Person to the extent that the declaration of dividends or
similar
distributions by that Restricted Subsidiary of that income is
restricted by a
contract, operation of law or otherwise;
(4) the net income of any Person, other than a Restricted
Subsidiary of
the referent Person, except to the extent of cash dividends or
distributions
paid to the referent Person or to a Wholly Owned Restricted
Subsidiary of the
referent Person by such Person;
(5) any restoration to income of any contingency reserve, except to
the
extent that provision for such reserve was made out of Consolidated
Net Income
accrued at any time following September 30, 2004;
(6) income or loss attributable to discontinued operations
(including,
without limitation, operations disposed of during such period
whether or not
such operations were classified as discontinued); and
(7) in the case of a successor to the referent Person by
consolidation
or merger or as a transferee of the referent Person's assets, any
earnings of
the successor corporation prior to such consolidation, merger or
transfer of
assets.
1.40 "Consolidated Non-Cash Charges" means, with respect to any
Person,
for any period, the aggregate depreciation, amortization, non-cash
dividends or
distributions on Qualified Capital Stock paid in Qualified Capital
Stock and
other non-cash expenses of such Person and its Restricted
Subsidiaries reducing
Consolidated Net Income of such Person and its Restricted
Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP
(excluding
any such charges constituting an extraordinary item or loss or any
such charge
which requires an accrual of or a reserve for cash charges for any
future
period).
1.41 "Consolidated Total Indebtedness" means, as at any date of
determination, an amount equal to the sum of (a) the aggregate
amount of all
outstanding Indebtedness of Borrower and its Restricted
Subsidiaries and (b) the
aggregate amount of all outstanding Disqualified Capital Stock of
Borrower and
its Subsidiaries, with the amount of such Disqualified Capital
Stock equal to
the greater of its respective voluntary or involuntary liquidation
preferences
and maximum fixed repurchase prices, in each case determined on a
consolidated
basis in accordance with GAAP.
1.42 "Copyrights" shall mean, collectively, with respect to
Borrower
and each Guarantor, all copyrights (whether statutory or common
law, whether
established or registered in the United States or any other country
or any
political subdivision thereof, whether registered or unregistered
and whether
published or unpublished) and all copyright registrations and
applications made
by Borrower and such Guarantor, in each case, whether now owned or
hereafter
created or acquired by or assigned to Borrower and such Guarantor,
together with
any and all (a) rights and privileges arising under applicable law
with respect
to Borrower's and such Guarantor's use of such copyrights, and (b)
reissues,
renewals, continuations and extensions thereof.
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1.43 "Credit Card Issuer" shall mean any Person (other than
Borrowers
but including Financing Subsidiaries) who issues or whose members
issue credit
cards, including, without limitation, MasterCard or VISA bank
credit or debit
cards or other bank credit or debit cards issued through
MasterCard
International, Inc., Visa, U.S.A., Inc. or Visa International and
American
Express, Discover, Diners Club, and other non-bank credit or debit
cards,
including, without limitation, credit or debit cards issued by or
through
American Express Travel Related Services Company, Inc.
1.44 "Credit Card
Processor" shall mean any servicing or processing
agent or any factor or financial intermediary who facilitates,
services,
processes or manages the credit authorization, billing transfer
and/or payment
procedures with respect to any sales transactions of Borrower and
its
Subsidiaries involving credit card or debit card purchases by
customers using
credit cards or debit cards issued by any Credit Card Issuer.
1.45 "Credit Card Receivables" shall mean collectively, (a) all
present
and future rights of Borrower or any Subsidiary of Borrower to
payment from any
Credit Card Issuer, Credit Card Processor or other third party
arising from
sales of goods or rendition of services to customers who have
purchased such
goods or services using a credit or debit card and (b) all present
and future
rights of Borrower or any Subsidiary to payment from any Credit
Card Issuer,
Credit Card Processor or other third party in connection with the
sale or
transfer of Credit Card Receivables arising pursuant to the sale of
goods or
rendition of services to customers who have purchased such goods or
services
using a credit card or a debit card, including, but not limited to,
all amounts
at any time due or to become due from any Credit Card Issuer or
Credit Card
Processor under the Credit Card Agreements or otherwise.
1.46 "Currency Agreement" means any foreign exchange contract,
currency
swap agreement or other similar agreement or arrangement designed
to protect
Borrower or any Restricted Subsidiary of Borrower against
fluctuations in
currency values and not for speculative purposes.
1.47 "Default" shall mean an act, condition or event which with
notice
or passage of time or both would constitute an Event of
Default.
1.48 "Deposit Accounts" shall mean, collectively, with respect
to
Borrower and each Guarantor, (a) all "deposit accounts" as such
term is defined
in the UCC other than any Excluded Accounts, and in any event shall
include the
Collateral Account and all accounts and sub-accounts relating to
the foregoing
account and (b) all cash, funds, checks, notes and instruments from
time to time
on deposit in any of the accounts or sub-accounts described in
clause (a) of
this definition.
1.49 "Deposit Account Control Agreement" shall mean an agreement
in
writing, in form and substance reasonably satisfactory to Lender,
by and among
Lender, the Borrower or a
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Guarantor with a deposit account (other than Excluded Accounts) at
any bank at
which such deposit account is at any time maintained which provides
that such
bank will comply with instructions originated by Lender directing
disposition of
the funds in the deposit account without further consent by
Borrower or such
Guarantor and has such other terms and conditions as Lender may
require.
1.50 "Disqualified Capital Stock" means that portion of any
Capital
Stock which, by its terms (or by the terms of any security into
which it is
convertible or for which it is exchangeable at the option of the
holder
thereof), or upon the happening of any event, matures or is
mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable
at the sole option of the holder thereof on or prior to the final
maturity date
of the Senior Secured Notes; provided, that, (a) the Convertible
Preferred Stock
shall not be deemed Disqualified Capital Stock and (b) any Capital
Stock that
would not constitute Disqualified Capital Stock but for provisions
thereof
giving holders the right to require Borrower to repurchase or
redeem such
Capital Stock upon the occurrence of a "change of control" or
"asset sale"
occurring prior to the final maturity of the Senior Secured Notes
shall not
constitute Disqualified Capital Stock if (i) the "change of
control" or "asset
sale" provisions applicable to such Capital Stock are no more
favorable to the
holders of such Capital Stock than the provisions contained in
Sections 4.15 or
4.10 of the Senior Secured Note Indenture, as applicable, or the
Convertible
Preferred Stock and (ii) any such requirement becomes operative
only after
compliance with such terms applicable to the Senior Secured Notes,
including
prior completion of any offer to purchase the Senior Secured Notes
pursuant to a
Change of Control Offer or a Net Proceeds Offer (as such terms are
defined in
the Senior Secured Note Indenture as in effect on the date hereof),
as
applicable.
1.51 "Distributions" shall mean, collectively, with respect to
Borrower
and each Guarantor, all dividends, cash, options, warrants, rights,
instruments,
distributions, returns of capital or principal, income, interest,
profits and
other property, interests (debt or equity) or proceeds, including
as a result of
a split, revision, reclassification or other like change of the
Pledged
Securities, from time to time received, receivable or otherwise
distributed to
Borrower or such Guarantor in respect of or in exchange for any or
all of the
Pledged Securities or Intercompany Notes.
1.52 "Eligible Accounts" shall mean Accounts of Borrower and
Guarantors
which are and continue to be acceptable to Lender based on the
criteria set
forth below. In general, Accounts shall be Eligible Accounts
if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by Borrower or such Guarantor or rendition of
services by
Borrower or such Guarantor in the ordinary course of its business
which
transactions are completed in accordance with any applicable terms
and
provisions contained in any documents related thereto;
(b) such Accounts are not unpaid more than the earlier of
sixty (60) days after the original due date for them or one hundred
twenty (120)
days after the date of the original invoice for them
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<PAGE>
(c) such Accounts do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms
under which
payment by the account debtor may be conditional or contingent;
(d) the chief executive office of the account debtor with
respect to such Accounts is located in the United States of America
or Canada
(provided, that, at any time promptly upon Lender's request,
Borrower or such
Guarantor shall execute and deliver, or cause to be executed and
delivered, such
other agreements, documents and instruments as may be reasonably
required by
Lender to perfect the security interests of Lender in those
Accounts of an
account debtor with its chief executive office or principal place
of business in
Canada in accordance with the applicable laws of the Province of
Canada in which
such chief executive office or principal place of business is
located and take
or cause to be taken such other and further actions as Lender may
reasonably
request to enable Lender as secured party with respect thereto to
collect such
Accounts under the applicable Federal or Provincial laws of
Canada);
(e) if the chief executive office of the account debtor with
respect to such Accounts is located other than in the United States
of America
or Canada, then such Accounts shall be deemed Eligible Accounts if
such Accounts
otherwise satisfy the criteria for Eligible Accounts; provided,
that, the
aggregate amount of all such Eligible Accounts shall not exceed
$1,000,000 at
any time, except in the discretion of Lender, if either: (i) the
account debtor
has delivered to Borrower or such Guarantor an irrevocable letter
of credit
issued or confirmed by a bank reasonably satisfactory to Lender and
payable only
in the United States of America and in U.S. dollars, sufficient to
cover such
Account, in form and substance satisfactory to Lender and if
required by Lender,
the original of such letter of credit has been delivered to Lender
or Lender's
agent, and Borrower or such Guarantor has complied with the terms
of Section
5.2(f) hereof with respect to the assignment of the proceeds of
such letter of
credit to Lender or naming Lender as transferee beneficiary
thereunder, as
Lender may specify, or (ii) such Account is subject to credit
insurance payable
to Lender issued by an insurer and on terms and in an amount
acceptable to
Lender, or (iii) such Account is otherwise acceptable in all
respects to Lender
(subject to such lending formula with respect thereto as Lender may
in good
faith determine);
(f) such Accounts do not consist of progress billings (such
that the obligation of the account debtors with respect to such
Accounts is
conditioned upon such Borrower's or Guarantor's satisfactory
completion of any
further performance under the agreement giving rise thereto), bill
and hold
invoices or retainage invoices, except as to bill and hold
invoices, if Lender
shall have received an agreement in writing from the account
debtor, in form and
substance reasonably satisfactory to Lender, confirming the
unconditional
obligation of the account debtor to take the goods related thereto
and pay such
invoice;
(g) such Accounts do not consist of Accounts for connection
services to be provided by Borrower or such Guarantor more than
thirty (30) days
in advance of the performance of such services;
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<PAGE>
(h) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and is not owed or does
not claim to
be owed any amounts that may give rise to any right of setoff or
recoupment
against such Accounts (but the portion of the Accounts of such
account debtor in
excess of the amount at any time and from time to time owed by
Borrower or such
Guarantor to such account debtor or claimed owed by such account
debtor may be
deemed Eligible Accounts);
(i) there are no material facts, events or occurrences which
would impair the validity, enforceability or collectability of such
Accounts or,
except as otherwise permitted in this Agreement, reduce the amount
payable or
delay payment thereunder beyond the periods set forth in subsection
(b) of this
definition;
(j) such Accounts are subject to the first priority, valid and
perfected security interest of Lender and are not subject to any
liens except as
expressly permitted in this Agreement and which liens are subject
to an
intercreditor agreement in form and substance reasonably
satisfactory to Lender
between the holder of such security interest or lien and
Lender;
(k) such Accounts may be owed by account debtors who are
employees of Borrower or any Guarantor provided, that, the
aggregate amount of
all such Accounts deemed Eligible Accounts shall not exceed
$100,000 in the
aggregate;
(l) the Account debtor with respect to such Account is the
United States of America or any department, agency or
instrumentality thereof,
so long as the aggregate outstanding amount of all such Accounts
does not exceed
$1,500,000 (such Accounts in excess of $1,500,000, either singly or
in the
aggregate, shall be deemed Eligible Accounts if, upon Lender's
request, the
Federal Assignment of Claims Act of 1940, as amended, if
applicable, has been
complied with in a manner reasonably satisfactory to Lender);
(m) the Account debtor in respect of such Accounts has not to
the knowledge of Borrower, any Guarantor or Lender (i) filed a
petition for
bankruptcy or any other relief under the Bankruptcy Code or any
other law
relating to bankruptcy, insolvency, reorganization or relief of
debtors, (ii)
made an assignment for the benefit of creditors, (iii) had filed
against it any
petition or other application for relief under the Bankruptcy Code
or any such
other law, (iv) has failed, suspended business operations, become
insolvent, or
(v) had or suffered a receiver or a trustee to be appointed for all
or a
significant portion of its assets or affairs, except, that,
Accounts created in
respect of such account debtors after the occurrence of any events
described in
clauses (i) through (iv) above may be deemed eligible to the extent
such
Accounts otherwise satisfy, in the determination of Lender, the
criteria set
forth herein;
(n) the aggregate amount of such Accounts owing by a single
account debtor do not constitute more than ten (10%) percent of the
aggregate
amount of all otherwise Eligible Accounts (but the portion of the
Accounts not
in excess of the applicable percentage shall be deemed Eligible
Accounts if such
Accounts otherwise qualify as Eligible Accounts);
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<PAGE>
(o) such Accounts are not owed by an account debtor who has
Accounts unpaid more than the earlier of sixty (60) days after the
original due
date for them or one hundred twenty (120) days after the date of
the original
invoice for them which constitute more than fifty (50%) percent of
the total
Accounts of such account debtor;
(p) such Accounts are not Carrier Accounts or Credit Card
Receivables;
(q) such Accounts are not in respect of service at locations
of account debtors for which such service(s) has been
disconnected;
(r) such Accounts are not in respect of services performed for
which no invoice has been rendered;
(s) if such Accounts are owed to any Guarantor, Borrower owns,
directly or indirectly, at least eighty (80%) percent of the Voting
Stock of
such Guarantor; and
(t) notwithstanding anything to the contrary set forth in this
definition, no more than ten (10%) percent of the dollar amount of
all Eligible
Accounts shall be Accounts in respect of which residential
customers are Account
debtors.
Upon written notice to Borrower, the criteria for Eligible Accounts
set forth
above may be changed and any new criteria for Eligible Accounts may
be
established by Lender in good faith only based on and with a
reasonable
relationship to either: (i) an event, condition or other
circumstance arising
after the date hereof, or (ii) an event, condition or other
circumstance
existing on the date hereof to the extent Lender has no written
notice thereof
from a Borrower prior to the date hereof, in either case under
clause (i) or
(ii) which materially adversely affects or could reasonably be
expected to
materially adversely affect the Accounts in the good faith
determination of
Lender. Any Accounts that are not Eligible Accounts shall
nevertheless be part
of the Collateral.
1.53 "Environmental Laws" shall mean all foreign, Federal, State
and
local laws (including common law), legislation, rules, codes,
licenses, permits
(including any conditions imposed therein), authorizations,
judicial or
administrative decisions, injunctions or agreements between
Borrower or any
Guarantor and any Governmental Authority, (a) relating to pollution
and the
protection, preservation or restoration of the environment
(including air, water
vapor, surface water, ground water, drinking water, drinking water
supply,
surface land, subsurface land, plant and animal life or any other
natural
resource), or to human health or safety, (b) relating to the
exposure to, or the
use, storage, recycling, treatment, generation, manufacture,
processing,
distribution, transportation, handling, labeling, production,
release or
disposal, or threatened release, of Hazardous Materials, or (c)
relating to all
laws with regard to recordkeeping, notification, disclosure and
reporting
requirements respecting Hazardous Materials. The term
"Environmental Laws"
includes (i) the Federal Comprehensive Environmental Response,
Compensation and
Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the
14
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Federal Clean Water Act, the Federal Clean Air Act, the Federal
Resource
Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste
Amendments thereto), the Federal Solid Waste Disposal and the
Federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act,
and the Federal Safe Drinking Water Act of 1974, (ii) applicable
state
counterparts to such laws and (iii) any common law or equitable
doctrine that
may impose liability or obligations for injuries or damages due to,
or
threatened as a result of, the presence of or exposure to any
Hazardous
Materials.
1.54 "Equipment" shall have the meaning set forth in the UCC.
1.55 "ERISA" shall mean the Employee Retirement Income Security Act
of
1974, together with all rules, regulations and interpretations
thereunder or
related thereto.
1.56 "ERISA Affiliate" shall mean any person required to be
aggregated
with Borrower, any Guarantor or any of its or their respective
Subsidiaries
under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
1.57 "ERISA Event" shall mean (a) the occurrence of any
"reportable
event", as defined in Section 4043(c) of ERISA, with respect to a
Pension Plan,
other than events as to which the requirement of notice has been
waived in
regulations by the Pension Benefit Guaranty Corporation; (b) the
adoption of any
amendment to a Pension Plan that would require the provision of
security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA;
(c) a
complete or partial withdrawal by Borrower, Guarantor or any ERISA
Affiliate
from a Multiemployer Plan or a cessation of operations which is
treated as such
a withdrawal or the receipt by Borrower, Guarantor or any ERISA
affiliate of
notification that a Multiemployer Plan is in reorganization; (d)
the filing of a
notice of intent to terminate, the treatment of a Pension Plan
amendment as a
termination under Section 4041 or 4041A of ERISA, or the
commencement of
proceedings by the Pension Benefit Guaranty Corporation to
terminate a Pension
Plan; (e) an 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 Pension Plan; (f) the imposition of
any
liability under Title IV of ERISA, other than the Pension Benefit
Guaranty
Corporation premiums due but not delinquent under Section 4007 of
ERISA, upon
Borrower, Guarantor or any ERISA Affiliate in excess of $5,000,000;
and (g) any
other event or condition with respect to a Plan including any
Pension Plan
maintained, or contributed to, by any ERISA Affiliate that could
reasonably be
expected to result in liability of Borrower in excess of
$5,000,000.
1.58 "Eurodollar Rate Loans" shall mean any Loans or portion
thereof on
which interest is payable based on the Adjusted Eurodollar Rate in
accordance
with the terms hereof.
1.59 "Event of Default" shall mean the occurrence or existence of
any
event or condition described in Section 10.1 hereof.
1.60 "Excess Availability" shall mean, the amount, as determined
by
Lender,
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calculated at any date, equal to: (a) the lesser of: (i) the
Borrowing Base and
(ii) the Maximum Credit plus (b) Qualified Cash minus (c) the sum
of: (i) the
amount of all then outstanding and unpaid Revolving Loans plus (ii)
the amount
of all then outstanding and unpaid trade payables and other
obligations of
Borrower and Guarantors which exceed $1,000,000 in the aggregate
and are
outstanding more than sixty (60) days past due as of the end of the
immediately
preceding month (other than trade payables, other obligations or
carrier
disputes being contested or disputed by Borrower and Guarantors in
good faith).
1.61 "Exchange Act" shall mean the Securities Exchange Act of
1934,
together with all rules, regulations and interpretations thereunder
or related
thereto.
1.62 "Excluded Account" shall mean (a) any Deposit Account,
Securities
Account or Commodity Account opened by Borrower or any Guarantor
the average
daily balance of which is less than $500,000; provided, that, the
average daily
balance of any such account when aggregated with the average daily
balance of
all other such accounts with balances of less than $500,000 shall
not exceed
$1,000,000 and (b) any Deposit Account used solely for (i) funding
payroll or
segregating payroll taxes or (ii) segregating 401k contributions
or
contributions to the employee stock purchase plan and other health
and benefit
plans, in each case for payment in accordance with any applicable
laws.
1.63 "Excluded Property" shall mean Special Property other than
the
following:
(a) the right to receive any payment of money (including
Accounts, General Intangibles and Payment Intangibles) or any other
rights
referred to in Sections 9 406(d), 9 407 (a) or 9 408(a) of the UCC
to the extent
that such sections of the UCC are effective to limit the
prohibitions which make
such property "Special Property"; and
(b) any claim under the policy of insurance (an "Insurance
Claim"); and
(c) any Proceeds, substitutions or replacements of any Special
Property (unless such Proceeds, substitutions or replacements would
constitute
Special Property).
1.64 "Facility Maximum Credit" shall mean $10,000,000; provided,
that,
the Facility Maximum Credit may be increased to an amount not to
exceed
$20,000,000 upon the satisfaction of all conditions set forth in
Section 2.2
hereof as determined by Lender.
1.65 "FCC" shall mean the Federal Communications Commission of
the
United States of America, and any successor, in whole or in part,
to its
jurisdiction.
1.66 "Financing Agreements" shall mean, collectively, this
Agreement
and all notes, guarantees, security agreements, deposit account
control
agreements, investment property control agreements, intercreditor
agreements and
all other agreements, documents and instruments now or at any time
hereafter
executed and/or delivered by Borrower or any Guarantor in
connection with this
Agreement provided, that, the Financing Agreements shall not
include Interest
Swap Obligations.
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1.67 "Fixtures" shall have the meaning set forth in the UCC.
1.68 "Foreign Subsidiary" shall mean any Subsidiary of Borrower
which
is organized and existing under the laws of any jurisdiction
outside of the
United States of America.
1.69 "Funding Bank" shall have the meaning given to such term
in
Section 3.7 hereof.
1.70 "GAAP" shall mean generally accepted accounting principles in
the
United States of America as in effect from time to time as set
forth in the
opinions and pronouncements of the Accounting Principles Board and
the American
Institute of Certified Public Accountants and the statements and
pronouncements
of the Financial Accounting Standards Board or such other statement
by such
other entity as may be approved by a significant segment of the
accounting
profession in the United States or changes in application of which
the
Borrower's independent certified public accountants concur.
1.71 "General Intangibles" shall mean, collectively, with respect
to
Borrower and each Guarantor, all "general intangibles," as such
term is defined
in the UCC, of Borrower and such Guarantor and, in any event, shall
include (i)
all of Borrower's and such Guarantor's rights, title and interest
in, to and
under all insurance policies and Contracts, (ii) all know-how and
warranties
relating to any of the Collateral, if applicable, (iii) any and all
other
rights, claims, choses-in-action and causes of action of such
Guarantor against
any other person and the benefits of any and all collateral or
other security
given by any other person in connection therewith, (iv) all
guarantees,
endorsements and indemnifications on, or of, any of the Collateral,
if
applicable, (v) all lists, books, records, correspondence, ledgers,
printouts,
files (whether in printed form or stored electronically), tapes and
other papers
or materials containing information relating to any of the
Collateral, if
applicable, including all customer or tenant lists, identification
of suppliers,
data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports,
manuals,
standards, processing standards, performance standards, catalogs,
research data,
computer and automatic machinery software and programs and the
like, field
repair data, accounting information pertaining to Borrower's or
such Guarantor's
operations or any of the Collateral, if applicable, and all media
in which or on
which any of the information or knowledge or data or records may be
recorded or
stored and all computer programs used for the compilation or
printout of such
information, knowledge, records or data, (vi) all licenses,
consents, permits,
variances, certifications, authorizations and approvals, however
characterized,
of any Governmental Authority (or any person acting on behalf of a
Governmental
Authority) now or hereafter acquired or held by Borrower or such
Guarantor
pertaining to operations now or hereafter conducted by such
Guarantor or any of
the Collateral, if applicable, including building permits,
certificates of
occupancy, environmental certificates, industrial permits or
licenses and
certificates of operation and (vii) all rights to reserves,
deferred payments,
deposits, refunds, indemnification of claims to the extent the
foregoing relate
to any Collateral, if applicable, and claims for tax or other
refunds against
any Governmental Authority relating to any Collateral, if
applicable.
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1.72 "Goodwill" shall mean, collectively, with respect to Borrower
and
each Guarantor, the goodwill connected with such Guarantor's
business including
all goodwill connected with (i) the use of and symbolized by any
Trademark or
Trademark License in which Borrower or such Guarantor has any
interest and (ii)
all know-how, trade secrets, customer and supplier lists,
proprietary
information, inventions, methods, procedures, formulae,
descriptions,
compositions, technical data, drawings, specifications, name
plates, catalogs,
confidential information and the right to limit the use or
disclosure thereof by
any person, pricing and cost in-formation, business and marketing
plans and
proposals, consulting agreements, engineering contracts and such
other assets
which relate to such goodwill.
1.73 "Governmental Authority" shall mean any nation or government,
any
state, province, or other political subdivision thereof, any
central bank (or
similar monetary or regulatory authority) thereof, and any entity
exercising
executive, legislative, judicial, regulatory or administrative
functions of or
pertaining to government.
1.74 "Guarantors" shall mean, collectively, the following
(together
with their respective successors and assigns): (a) US LEC of North
Carolina
Inc., a North Carolina corporation; (b) US LEC of Tennessee Inc., a
Delaware
corporation; (c) US LEC of Georgia Inc., a Delaware corporation;
(d) US LEC of
South Carolina Inc., a Delaware corporation; (e) US LEC of Florida
Inc., a North
Carolina corporation; (f) US LEC of Virginia, L.L.C., a Delaware
limited
liability company (g) US LEC of Alabama Inc., a North Carolina
corporation; (h)
US LEC of Pennsylvania Inc., a North Carolina corporation; (i) US
LEC of
Maryland Inc., a Delaware corporation; (j) US LEC Communications
Inc., a North
Carolina corporation; (k) US LEC Acquisition Co., a North Carolina
corporation;
(l) US LEC of New York Inc., a North Carolina corporation; and (m)
any other
Person that at any time after the date hereof becomes party to a
guarantee in
favor of Lender or otherwise liable on or with respect to the
Obligations or who
is the owner of any property which is security for the Obligations
(other than
Borrower); each sometimes being referred to herein individually as
a
"Guarantor".
1.75 "Hazardous Materials" shall mean any hazardous, toxic or
dangerous
substances, materials and wastes, including hydrocarbons (including
naturally
occurring or man-made petroleum and hydrocarbons), flammable
explosives,
asbestos, urea formaldehyde insulation, radioactive materials,
biological
substances, polychlorinated biphenyls, pesticides, herbicides and
any other kind
and/or type of pollutants or contaminants (including materials
which include
hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any
other similar substances, materials, or wastes and including any
other
substances, materials or wastes that are or become regulated under
any
Environmental Law (including any that are or become classified as
hazardous or
toxic under any Environmental Law).
1.76 "Indebtedness" means with respect to any Person, without
duplication:
(a) all obligations of such Person for borrowed money;
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(b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) all Capitalized Lease Obligations of such Person;
(d) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale
obligations and all
Obligations under any title retention agreement (but excluding
trade accounts
payable and other accrued liabilities arising in the ordinary
course of business
that are not overdue by 90 days or more or are being contested in
good faith);
(e) all obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit
transaction;
(f) guarantees and other contingent obligations in respect of
Indebtedness of other Persons of the type referred to in clauses
(a) through (e)
above and clause (h) below but, in the case of a guarantee, only to
the extent
so guaranteed;
(g) all obligations of any other Person of the type referred
to in clauses (a) through (f) which are secured by any lien on any
property or
asset of such Person, the amount of such obligation being deemed to
be the
lesser of the fair market value of such property or asset and the
amount of the
Obligation so secured;
(h) all obligations under Currency Agreements and Interest
Swap Obligations of such Person; and
(i) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital
Stock being
equal to the greater of its voluntary or involuntary liquidation
preference and
its maximum fixed repurchase price, but excluding accrued
dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock which does not have a fixed
repurchase price
shall be calculated in accordance with the terms of such
Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any
date on which
Indebtedness shall be required to be determined pursuant to this
Agreement, and
if such price is based upon, or measured by, the fair market value
of such
Disqualified Capital Stock, such fair market value shall be
determined
reasonably and in good faith by the Board of Directors of Borrower
of such
Disqualified Capital Stock.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional
obligations as
described above and, with respect to contingent obligations, the
maximum
liability upon the occurrence of the contingency giving rise to the
obligation;
provided, that, the amount outstanding at any time of any
Indebtedness issued
with original issue discount is the original issue price of such
Indebtedness.
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1.77 "Indebtedness to Cash Flow Ratio" means the ratio of (a)
the
Consolidated Total Indebtedness as of the date of calculation (the
"Calculation
Date") to (b) the Consolidated Cash Flow for the four full
consecutive fiscal
quarters immediately preceding such Calculation Date for which
financial
information is available (the "Measurement Period"). For purposes
of calculating
Consolidated Cash Flow for the Measurement Period ending
immediately prior to
the relevant Calculation Date:
(i) any Person that is a Restricted Subsidiary on the
Calculation Date (or would become a Restricted Subsidiary on such
Calculation
Date in connection with the transaction that requires the
determination of such
Consolidated Cash Flow) will be deemed to have been a Restricted
Subsidiary at
all times during such Measurement Period;
(ii) any Person that is not a Restricted Subsidiary on such
Calculation Date (or would cease to be a Restricted Subsidiary on
such
Calculation Date in connection with the transaction that requires
the
determination of such Consolidated Cash Flow) will be deemed not to
have been a
Restricted Subsidiary at any time during such Measurement Period;
and
(iii) if since the beginning of the Measurement Period,
Borrower, any Restricted Subsidiary or any Person that subsequently
became a
Restricted Subsidiary or was merged with or into Borrower or any
Restricted
Subsidiary since the beginning of the Measurement Period shall have
in any
manner (x) acquired (including through an Asset Acquisition or the
commencement
of activities constituting such operating business) or (y) disposed
of
(including by way of an Asset Sale or the termination or
discontinuance of
activities constituting such operating business) any operating
business in each
case during such Measurement Period or after the end of such period
and on or
prior to such Calculation Date, such calculation will be made on a
pro forma
basis in accordance with GAAP and giving effect to any increase or
reduction of
any associated Consolidated Cash Flow attributable thereto
(including any pro
forma adjustments (including cost-savings adjustments) calculated
on a basis
consistent with Regulation S-X under the Securities Act), as if, in
the case of
an Asset Acquisition or the commencement of activities constituting
such
operating business, all such transactions had been consummated on
the first day
of such Measurement Period and, in the case of an Asset Sale or
termination or
discontinuance of activities constituting such operating business,
all such
transactions had been consummated prior to the first day of such
Measurement
Period.
1.78 "Information Certificate" shall mean, collectively, the
Information Certificates of Borrower and Guarantors constituting
Exhibit A
hereto containing material information with respect to Borrower and
Guarantors,
their respective businesses and assets provided by or on behalf of
Borrower and
Guarantors to Lender in connection with the preparation of this
Agreement and
the other Financing Agreements and the financing arrangements
provided for
herein.
1.79 "Initial Pledged Interests" shall mean, with respect to
Borrower
and each Guarantor, all membership, partnership or other equity
interests (other
than in a corporation), as
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applicable, of each issuer described in Schedule 1.79 hereto,
together with all
rights, privileges, authority and powers of Borrower or such
Guarantor in and to
each such issuer or under any organizational document of each such
issuer, and
the certificates, instruments and agreements representing such
membership,
partnership or other interests and any and all interest of Borrower
or such
Guarantor in the entries on the books of any financial intermediary
pertaining
to such membership, partnership or other interests.
1.80 "Initial Pledged Shares" shall mean, collectively, with
respect to
Borrower and each Guarantor, the issued and outstanding shares of
capital stock
of each issuer described in Schedule 1.80 hereto together with all
rights,
privileges, authority and powers of Borrower or such Guarantor
relating to such
interests in each such issuer or under any organizational document
of each such
issuer, and the certificates, instruments and agreements
representing such
shares of capital stock and any and all interest of Borrower or
such Guarantor
in the entries on the books of any financial intermediary
pertaining to the
Initial Pledged Shares.
1.81 "Instruments" shall mean, collectively, with respect to
Borrower
and each Guarantor, all "instruments," as such term is defined in
Article 9 of
the UCC, rather than Article 3, of the UCC, and shall include all
promissory
notes, drafts, bills of exchange or acceptances.
1.82 "Intellectual Property" shall mean, as to Borrower and
each
Guarantor, collectively, such Borrower's and Guarantor's now owned
and hereafter
arising or acquired collectively, Patents, Trademarks, Copyrights,
Licenses and
Goodwill.
1.83 "Intercompany Notes" shall mean, with respect to Borrower and
each
Guarantor, all intercompany notes described in Schedule 1.83 hereto
and
intercompany notes hereafter acquired by Borrower or such Guarantor
and all
certificates, instruments or agreements evidencing such
intercompany notes, and
all assignments, amendments, restatements, supplements, extensions,
renewals,
replacements or modifications thereof to the extent permitted
pursuant to the
terms hereof.
1.84 "Intercreditor Agreement" shall mean the Intercreditor
Agreement,
dated of even date herewith, by and among Lender and Senior Secured
Note Trustee
(on behalf of the holders of the Senior Secured Notes), as
acknowledged and
agreed to by Borrower and Guarantors, as the same now exists or may
hereafter be
amended, modified, supplemented, extended, renewed, restated or
replaced.
1.85 "Interest Period" shall mean for any Eurodollar Rate Loan,
a
period of approximately one (1), two (2), three (3) months or six
(6) months
duration as Borrower may elect, the exact duration to be determined
in
accordance with the customary practice in the applicable Eurodollar
Rate market;
provided, that, Borrower may not elect an Interest Period which
will end after
the last day of the then-current term of this Agreement.
1.86 "Interest Rate" shall mean,
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(a) Subject to clause (b) of this definition below:
(i) as to Prime Rate Loans, a rate equal to
one-quarter (.25%) percent per annum in excess of the Prime
Rate,
(ii) as to Eurodollar Rate Loans, a rate equal to two
and one-quarter (2.25%) percent per annum in excess of the Adjusted
Eurodollar
Rate (in each case, based on the London Interbank Offered Rate
applicable for
the Interest Period selected by Borrower, as in effect two (2)
Business Days
prior to the commencement of the Interest Period, whether such rate
is higher or
lower than any rate previously quoted to Borrower or any
Guarantor).
(b) Notwithstanding anything to the contrary contained in
clause (a) of this definition, the Interest Rate shall mean the
rate of two and
one-quarter (2.25%) percent per annum in excess of the Prime Rate
as to Prime
Rate Loans and the rate of four and one-quarter (4.25%) percent per
annum in
excess of the Adjusted Eurodollar Rate as to Eurodollar Rate Loans,
at Lender's
option, without notice, (i) either (A) for the period on and after
the date of
termination or non-renewal hereof until such time as all
Obligations are
indefeasibly paid and satisfied in full in immediately available
funds, or (B)
for the period from and after the date of the occurrence of any
Event of
Default, and for so long as such Event of Default is continuing as
determined by
Lender and (ii) on the Revolving Loans to Borrower at any time
outstanding in
excess of the Borrowing Base or the Maximum Credit (whether or not
such
excess(es) arise or are made with or without Lender's knowledge or
consent and
whether made before or after an Event of Default).
1.87 "Interest Swap Obligations" means the obligations of any
Person
pursuant to any arrangement with any other Person, whereby,
directly or
indirectly, such Person is entitled to receive from time to time
periodic
payments calculated by applying either a floating or a fixed rate
of interest on
a stated notional amount in exchange for periodic payments made by
such other
Person calculated by applying a fixed or a floating rate of
interest on the same
notional amount and shall include, without limitation, interest
rate swaps,
caps, floors, collars and similar agreements and not entered into
for
speculative purposes.
1.88 "Inventory" shall have the meaning set forth in the UCC.
1.89 "Investment" means, with respect to any Person, any direct
or
indirect loan or other extension of credit (including, without
limitation, a
guarantee) or capital contribution to (by means of any transfer of
cash or other
property to others or any payment for property or services for the
account or
use of others), or any other purchase or acquisition by such Person
of any
Capital Stock, bonds, notes, debentures or other securities or
evidences of
Indebtedness issued by, any other Person. "Investment" shall
exclude extensions
of trade credit by the Borrower and its Restricted Subsidiaries on
commercially
reasonable terms in accordance with normal trade practices of the
Borrower or
such Restricted Subsidiary, as the case may be. If the Borrower or
any
Restricted Subsidiary of the Borrower sells or otherwise disposes
of any Common
Stock of any direct or indirect Restricted Subsidiary of Borrower
such that,
after giving effect to any such
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sale or disposition, Borrower no longer owns, directly or
indirectly, 100% of
the outstanding Common Stock of such Restricted Subsidiary,
Borrower shall be
deemed to have made an Investment on the date of any such sale or
disposition
equal to the fair market value of the Common Stock of such
Restricted Subsidiary
not sold or disposed of.
1.90 "Investment Property" shall mean a security, whether
certificated
or uncertificated, Security Entitlement, Securities Account,
Commodity Contract
or Commodity Account, excluding, however, the Securities
Collateral.
1.91
"Investment Property Control Agreement" shall mean an agreement
in
writing, in form and substance satisfactory to Lender, by and among
Lender,
Borrower or any Guarantor (as the case may be) and any securities
intermediary,
commodity intermediary or other person who has custody, control or
possession of
any investment property of Borrower or such Guarantor (other than
Excluded
Accounts) acknowledging that such securities intermediary,
commodity
intermediary or other person has custody, control or possession of
such
investment property on behalf of Lender, that it will comply with
entitlement
orders originated by Lender with respect to such investment
property, or other
instructions of Lender, and has such other terms and conditions as
Lender may
require.
1.92 "Lender" shall mean Wachovia Bank, National Association, a
national banking association, and its successors and assigns.
1.93 "Lender Payment Account" shall mean account no. 2070482789126
of
Lender at Wachovia Bank, National Association or such other account
of Lender as
Lender may from time to time designate to Borrower as the Lender
Payment Account
for purposes of this Agreement and the other Financing
Agreements.
1.94 "Licenses" shall mean, collectively, with respect to Borrower
and
each Guarantor, all license and distribution agreements with, and
covenants not
to sue, any other party with respect to any Patent, Trademark or
Copyright or
any other patent, trademark or copyright, whether Borrower or such
Guarantor is
a licensor or licensee, distributor or distributee under any such
license or
distribution agreement, together with any and all renewals,
extensions,
supplements and continuations thereof.
1.95 "License Agreements" shall have the meaning set forth in
Section
8.11 hereof.
1.96 "Lien" shall mean any mortgage or deed of trust, charge,
pledge,
lien (statutory or otherwise), privilege, security interest,
assignment,
deposit, arrangement, easement, hypothecation, claim, preference,
priority or
other encumbrance upon or with respect to any property of any kind
(including
any conditional sale, capital lease or other title retention
agreement, any
leases in the nature thereof, and any agreement to give any
security interest),
real or personal, movable or immovable, now owned or hereafter
acquired. A
Person will be deemed to own subject to a Lien any property that it
has acquired
or holds subject to the interest of a vendor or lessor under any
conditional
sale agreement, Capitalized Lease Obligation or other title
retention agreement.
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1.97 "London Interbank Offered Rate" shall mean, with respect to
any
Eurodollar Loan for the Interest Period applicable thereto, the
rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing
on Telerate Page 3750 (or any successor page) as the London
interbank offered
rate for deposits in U.S. Dollars at approximately 11:00 A.M.
(London time) two
(2) Business Days prior to the first day of such Interest Period
for a term
comparable to such Interest Period; provided, that, if more than
one rate is
specified on Telerate Page 3750, the applicable rate shall be the
arithmetic
mean of all such rates. If, for any reason, such rate is not
available, the term
"London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest
per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior
to the first
day of such Interest Period for a term comparable to such Interest
Period;
provided, however, if more than one rate is specified on Reuters
Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such
rates.
1.98 "Material Adverse Effect" shall mean a material adverse effect
on
(a) the financial condition, business, performance or operations of
Borrower and
its Subsidiaries taken as a whole; (b) the legality, validity or
enforceability
of this Agreement or any of the other Financing Agreements; (c) the
legality,
validity, enforceability, perfection or priority of the security
interests and
liens of Lender upon the Collateral; (d) the Collateral or the
value of
Accounts; (e) the ability of Borrower and Guarantors (taken as a
whole) to repay
the Obligations or of Borrower and Guarantors to perform its
obligations under
this Agreement or any of the other Financing Agreements as and when
to be
performed; or (f) the ability of Lender to enforce the Obligations
or realize
upon the Collateral or otherwise with respect to the rights and
remedies of
Lender under this Agreement or any of the other Financing
Agreements. For
purposes of determining a Material Adverse Effect, any non-cash,
non-recurring
charges related to inter-carrier compensation or carrier access
disputes and
receivables will be excluded. It is agreed by the parties hereto
that the
effects of Hurricanes Katrina and Rita did not have a Material
Adverse Effect on
the Borrower and its Subsidiaries.
1.99 "Material Contract" shall mean any contract or other
agreement
(other than the Financing Agreements), whether written or oral, to
which
Borrower or any Guarantor is a party as to which the breach,
nonperformance,
cancellation or failure to renew or be replaced by any party
thereto would have
a Material Adverse Effect.
1.100 "Maximum Credit" shall mean, on any date of determination,
the
amount equal to (a) the Facility Maximum Credit minus (b) the
aggregate amount
of outstanding "Permitted Indebtedness" under clause (2) of the
definition of
Permitted Indebtedness (as set forth in the Senior Secured Note
Indenture as in
effect on the date hereof) exclusive of the aggregate principal
amount of
Revolving Loans and other Obligations outstanding hereunder.
1.101 "Maximum Secured Debt Amount" means the maximum amount of
Indebtedness
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that may be incurred by Borrower or any of its Restricted
Subsidiaries without
causing the Secured Indebtedness to Cash Flow Ratio for Borrower
(based on
Borrower's most recently ended four full fiscal quarters for which
internal
financial statements are available immediately preceding the date
on which such
Indebtedness is incurred) to exceed 3.0 to 1, determined on a pro
forma basis
(including a pro forma application of the net proceeds therefrom),
as if such
Indebtedness had been incurred at the beginning of such
four-quarter period. For
purposes of determining the amount of Indebtedness of Borrower and
its
Restricted Subsidiaries as of any date of determination, the total
committed
amounts under all revolving Credit Facilities (as such term is
defined in the
Senior Secured Note Indenture as in effect on the date hereof) will
be deemed to
be outstanding as of such date of determination.
1.102 "Multiemployer Plan" shall mean a "multi-employer plan"
as
defined in Section 4001(a)(3) of ERISA which is or was at any time
during the
current year or the immediately preceding six (6) years contributed
to by
Borrower, Guarantor or any ERISA Affiliate or with respect to which
Borrower,
Guarantor or any ERISA Affiliate may incur any liability.
1.103 "Net Cash Proceeds" means, with respect to any Asset Sale,
the
proceeds in the form of cash or Cash Equivalents including payments
in respect
of deferred payment obligations when received in the form of cash
or Cash
Equivalents (other than the portion of any such deferred payment
constituting
interest) received by Borrower, Guarantor, or any other Restricted
Subsidiaries
from such Asset Sale net of: (a) reasonable out-of-pocket expenses
and fees
relating to such Asset Sale (including, without limitation, legal,
accounting
and investment banking fees and sales commissions); (b) taxes paid
or payable
after taking into account any reduction in consolidated tax
liability due to
available tax credits or deductions and any tax sharing
arrangements; (c) in the
case of an Asset Sale of Collateral, repayment of Indebtedness that
is secured
by, or directly related to, the property or assets that are the
subject of such
Asset Sale, and, in the case of any other Asset Sale, repayment of
Indebtedness
that is required to be repaid in connection therewith; and (d)
appropriate
amounts to be provided by such Borrower, Guarantor or any
Restricted Subsidiary,
as the case may be, as a reserve, in accordance with GAAP, against
any
liabilities associated with such Asset Sale and retained by such
Borrower,
Guarantor or any Restricted Subsidiary, as the case may be, after
such Asset
Sale, including, without limitation, pension and other
post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under
any indemnification obligations associated with such Asset
Sale.
1.104 "Obligations" shall mean, without duplication, any and
all
Revolving Loans and all other obligations, liabilities and
indebtedness of every
kind, nature and description owing by any or all of Borrower to
Lender,
including principal, interest, charges, fees, costs and expenses,
however
evidenced, whether as principal, surety, endorser, guarantor or
otherwise,
arising under this Agreement or any of the other Financing
Agreements, whether
now existing or hereafter arising, whether arising before, during
or after the
initial or any renewal term of this Agreement or after the
commencement of any
case with respect to such Borrower under the United States
Bankruptcy Code or
any similar statute (including the payment of interest and other
amounts
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which would accrue and become due but for the commencement of such
case, whether
or not such amounts are allowed or allowable in whole or in part in
such case),
whether direct or indirect, absolute or contingent, joint or
several, due or not
due, primary or secondary, liquidated or unliquidated, or secured
or unsecured.
1.105 "Participant" shall mean any financial institution that
acquires
and holds a participation in the interest of Lender in any of the
Revolving
Loans in conformity with the provisions of Section 12.5 of this
Agreement
governing participations.
1.106 "Patents" shall mean, collectively, with respect to Borrower
and
each Guarantor, all patents issued or as-signed to and all patent
applications
and registrations made by Borrower or such Guarantor (whether
established or
registered or recorded in the United States or any other country or
any
political subdivision thereof), together with any and all (i)
rights and
privileges arising under applicable law with respect to Borrower's
or such
Guarantor's use of any patents, (ii) inventions and improvements
described and
claimed therein and (iii) reissues, divisions, continuations,
renewals,
extensions and continuations-in-part thereof.
1.107 "Pension Plan" shall mean a pension plan (as defined in
Section
3(2) of ERISA) subject to Title IV of ERISA which Borrower or any
Guarantor
sponsors, maintains, or to which Borrower, Guarantor or ERISA
Affiliate makes,
is making, or is obligated to make contributions, other than a
Multiemployer
Plan.
1.108 "Permitted Holders" means at any time (a) one or more
investment
funds controlled by Thomas H. Lee Partners, L.P.; (b) one or more
investment
funds controlled by Bain Capital, LLC and (c) in the case of clause
(a) and (b)
above, each of their respective Affiliates (not including, however,
any
portfolio companies of any of the foregoing).
1.109 "Permitted Indebtedness" means, without duplication, each of
the
following:
(a) Indebtedness of Borrower and Guarantors evidenced by the
Senior Secured Notes and the Senior Secured Note Indenture as in
effect on the
date hereof, provided, that:
(i) this Agreement is and shall at all times continue
to be a "Credit Facility" as such term is defined in the Senior
Secured Note
Indenture as in effect on the date hereof and is and shall be
entitled to all of
the rights and benefits thereof under the Senior Secured Note
Indenture as in
effect on the date hereof,
(ii) any lien on the Collateral securing such
Indebtedness shall at all times be subordinate to the lien in favor
of Lender
pursuant to the terms of the Intercreditor Agreement,
(iii) Borrower may amend the Senior Secured Note
Indenture after the date hereof, upon notice to Lender, provided,
that, no such
amendment or modification shall
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have an adverse effect on (A) the legality, validity,
enforceability, perfection
or priority of the security interests and liens of Lender upon the
Collateral;
(B) the Collateral or the value of Accounts; (C) the ability of
Borrower and
Guarantors (taken as a whole) to repay the Obligations or of
Borrower and
Guarantors to perform its obligations under this Agreement or any
of the other
Financing Agreements as and when to be performed; (D) the ability
of Lender to
enforce the Obligations or realize upon the Collateral or otherwise
with respect
to the rights and remedies of Lender under this Agreement or any of
the other
Financing Agreements, or (E) make the provisions of such Senior
Secured Note
Indenture or the Senior Secured Notes more restrictive or
burdensome on the
Borrower and Guarantors than the terms or conditions of such Senior
Secured Note
Indenture in effect on the date hereof;
(iv) Borrower and Guarantors shall furnish to Lender
all material written notices or demands in connection with such
Indebtedness
either received by Borrower or any Guarantor or on its behalf,
promptly after
the receipt thereof, or sent by Borrower or any Guarantor or on its
behalf,
concurrently with the sending thereof, as the case may be;
(b) other Indebtedness of Borrower and its Restricted
Subsidiaries outstanding on September 30, 2004 reduced by the
amount of any
scheduled amortization payments or mandatory prepayments when
actually paid or
permanent reductions thereon;
(c) Interest Swap Obligations of Borrower or any Restricted
Subsidiary of Borrower covering Indebtedness of Borrower or any of
its
Restricted Subsidiaries; provided, that, that such Interest Swap
Obligations are
entered into to protect Borrower and its Subsidiaries from
fluctuations in
interest rates on their outstanding Indebtedness to the extent the
notional
principal amount of such Interest Swap Obligation does not, at the
time of the
incurrence thereof, exceed the principal amount of the Indebtedness
to which
such Interest Swap Obligation relates;
(d) Indebtedness of a Restricted Subsidiary of Borrower to
Borrower or to a Wholly Owned Restricted Subsidiary of Borrower for
so long as
such Indebtedness is held by Borrower or a Wholly Owned Restricted
Subsidiary of
Borrower, in each case subject to no Lien held by a Person other
than Borrower
or a Restricted Subsidiary of Borrower or the holder of a Lien
permitted under
this Agreement, provided that, (i) any Indebtedness of a Borrower
or Guarantor
to any Wholly Owned Restricted Subsidiary of Borrower that is not a
Guarantor is
unsecured and subordinated, pursuant to a written agreement, to
such Guarantor's
or Borrower's obligations under this Agreement and (ii) if as of
any date any
Person other than Borrower or a Wholly Owned Restricted Subsidiary
of Borrower
or the holder of a Lien permitted under this Agreement owns or
holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such
date shall be
deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness
under this clause (d) by Borrower of such Indebtedness;
(e) Indebtedness of Borrower to a Wholly Owned Restricted
Subsidiary of Borrower for so long as such Indebtedness is held by
a Wholly
Owned Restricted Subsidiary of Borrower or the holder of a Lien
permitted under
this Agreement, in each case subject to no Lien other than a
Permitted Lien or a
Lien in favor of Lender or in favor of the Senior Secured Note
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Trustee pursuant to the terms of the Senior Secured Note Documents
and subject
to the terms of the Intercreditor Agreement; provided, that, (i)
any
Indebtedness of Borrower to any Wholly Owned Restricted Subsidiary
of Borrower
that is not a Guarantor is unsecured and subordinated, pursuant to
a written
agreement, to Borrower's obligations under the Senior Secured Notes
and
Borrower's and Guarantors' Obligations under this Agreement and the
other
Financing Agreements and (ii) if as of any date any Person other
than a Wholly
Owned Restricted Subsidiary of Borrower or the holder of a Lien
permitted under
this Agreement owns or holds any such Indebtedness or any Person
holds a Lien in
respect of such Indebtedness, such date shall be deemed the
incurrence of
Indebtedness not constituting Permitted Indebtedness under this
clause (e) by
Borrower, or such other Borrower or Guarantor, as the case may
be;
(f) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently
(except in the case of daylight overdrafts) drawn against
insufficient funds in
the ordinary course of business; provided, that, such Indebtedness
is
extinguished within five (5) business days of incurrence;
(g) Indebtedness of Borrower or any of its Restricted
Subsidiaries in respect of performance bonds, bankers' acceptances,
workers'
compensation claims, surety or appeal bonds, payment obligations in
connection
with self-insurance or similar obligations, letters of credit
(whether
cash-collateralized or not) functioning as or supporting any of the
foregoing or
any real estate leases and bank overdrafts in the ordinary course
of business
and consistent with past practice;
(h) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Obligations of Borrower and its Restricted
Subsidiaries
incurred in the ordinary course of business; provided, that the
principal amount
of any Indebtedness permitted under this clause (h) did not in each
case at the
time of incurrence exceed the fair market value, as determined by
Borrower in
good faith, of the acquired or constructed asset or improvement so
financed; and
provided, that, the aggregate principal amount of Indebtedness
outstanding under
this clause (h) does not, when taken together with any Revolving
Loans
outstanding under this Agreement, and any other Senior Secured Note
Permitted
Credit Facility exceed $10,000,000 (or such greater amount as may
be agreed to
by Borrower, Guarantors and Senior Secured Note Trustee, after the
date hereof
pursuant to an amendment (in form and substance satisfactory to
Lender) to the
Senior Secured Note Documents) at any time outstanding;
(i) Refinancing Indebtedness;
(j) Indebtedness represented by guarantees by Borrower or its
Restricted Subsidiaries of Indebtedness otherwise permitted to be
incurred under
this Agreement;
(k) Indebtedness of Borrower or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of
purchase
price adjustments, earn-outs or similar obligations in connection
with the
acquisition or disposition of property or assets; and
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(l) additional Indebtedness of Borrower and its Subsidiaries
not otherwise permitted pursuant to clauses (a) through (k) hereof
in an
aggregate principal amount not to exceed $7,500,000 at any one time
outstanding.
For purposes of determining compliance with Section 9.9
hereof, in the event that an item of Indebtedness meets the
criteria of more
than one of the categories of Permitted Indebtedness described in
clauses (a)
through (l) above or is entitled to be incurred pursuant to the
Indebtedness to
Cash Flow Ratio provisions of Section 9.9 hereof, Borrower shall,
in its sole
discretion, classify (or later reclassify) such item of
Indebtedness in any
manner that complies with this definition. Accrual of interest,
accretion or
amortization of original issue discount, the payment of interest or
fees or
expenses on any Indebtedness in the form of additional Indebtedness
with the
same terms, and the payment of dividends on Disqualified Capital
Stock in the
form of additional shares of the same class of Disqualified Capital
Stock will
not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified
Capital Stock for purposes of Section 9.9 hereof.
1.110 "Permitted Investments" means:
(a) Asset Acquisitions (whether made in cash or by issuance of
Capital Stock of Borrower) by Borrower or any Restricted Subsidiary
of Borrower
in any Person that is or will become immediately after such Asset
Acquisition a
Restricted Subsidiary of Borrower or that will merge or consolidate
into
Borrower or a Wholly Owned Restricted Subsidiary of Borrower;
provided, that,
each of the following conditions is satisfied in the determination
of Lender:
(i) as of the closing date of any such Asset Acquisition and
immediately after
giving effect thereto, Excess Availability shall be not less than
$7,500,000
(except, that, this condition shall not have to be satisfied if
such Asset
Acquisition is made by the issuance of Capital Stock by the
Borrower only), (ii)
the assets acquired which constitute Collateral and the Capital
Stock so
acquired by Borrower or its Restricted Subsidiary shall be free and
clear of any
security interest, mortgage, pledge, Lien, charge, or other
encumbrance (other
than Permitted Liens) and Lender shall have received evidence
reasonably
satisfactory to it of the same, (iii) promptly upon consummation of
such
Investment, (A) Lender shall have received true, correct and
complete copies of
all agreements, documents and instruments relating thereto, and (C)
Lender shall
have received all items required by Sections 5.2 and 9.25 hereof in
connection
with the Asset Acquisition to the extent required under such
Sections, (iv) the
Asset Acquisition shall be related, ancillary or complementary to
the business
of Borrower and its Subsidiaries, (v) as of the closing date of any
such Asset
Acquisition and immediately after giving effect thereto, no Default
or Event of
Default shall have occurred and be continuing, and (vi) in no event
shall any
Accounts acquired by Borrower or any Guarantor, as the case may be,
pursuant to
any such Asset Acquisition be deemed Eligible Accounts unless
Lender shall have
conducted a field examination and other due diligence with respect
to such
assets and the results of such field examination shall be
satisfactory to Lender
in all respects, and then only to the extent the criteria for
Eligible Accounts
set forth herein are satisfied with respect thereto (or as modified
by Lender to
reflect the results of Lender's field examination, including any
separate
advance percentage
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with respect to such Accounts or Reserves as Lender may determine,
and upon the
reasonable request of Lender, the Accounts acquired by Borrower or
such
Guarantor, as the case may be, pursuant to such Asset Acquisition
shall at all
times after such Asset Acquisition be separately identified and
reported to
Lender in a manner reasonably satisfactory to Lender;
(b) Investments in Borrower by any Subsidiary of Borrower;
provided that any Indebtedness evidencing such Investment and held
by a
Subsidiary that is not a Guarantor is unsecured and subordinated,
pursuant to a
written agreement, to Borrower's obligations under the Senior
Secured Notes and
the payment and performance of Borrower's and Guarantors'
Obligations under the
Financing Agreements;
(c) Investments in cash and Cash Equivalents;
(d) loans and advances to employees, directors and officers of
Borrower and its Restricted Subsidiaries in the ordinary course of
business for
bona fide business purposes not to exceed $2,000,000 at any one
time
outstanding;
(e) Currency Agreements and Interest Swap Obligations entered
into in the ordinary course of Borrower's or its Restricted
Subsidiaries'
businesses and otherwise in compliance with this Agreement;
(f) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar
arrangement upon the
bankruptcy or insolvency of such trade creditors or customers or in
good faith
settlement of delinquent obligations of such trade creditors or
customers;
(g) Investments made by Borrower or its Restricted
Subsidiaries as a result of consideration received in connection
with an Asset
Sale made in compliance with Section 9.7 hereof.
(h) Investments
represented by guarantees that are otherwise
permitted under this Agreement;
(i) Investments the payment for which is Qualified Capital
Stock of Borrower; and
(j) additional Investments not to exceed $5,000,000 at any one
time outstanding, provided, that, as of the date of making such
Investment and
immediately after giving effect thereto, no Default or Event of
Default shall
have occurred and be continuing.
1.111 "Permitted Liens" means, the following types of Liens:
(a) Liens on the Collateral in favor of Lender;
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(b) Liens on the Collateral that are second priority Liens to
those in favor of Lender securing additional Indebtedness of
Borrower and the
Guarantors ranking pari passu with the Senior Secured Notes
incurred pursuant to
Section 9.9(a) hereof in an amount not to exceed the Maximum
Secured Debt Amount
(which, for the avoidance of doubt, shall be calculated in the
aggregate with
all other outstanding Secured Indebtedness); provided, that, (i)
such
Indebtedness has a Weighted Average Life to Maturity and final
maturity that is
equal to or greater than that of the latest maturity of the Senior
Secured
Notes, (ii) such Liens permitted pursuant to this clause (b) are,
in terms of
priority, no better than on an equal and ratable basis with the
Liens securing
the Senior Secured Notes, i.e., such Liens on the Collateral are
second priority
Liens to those in favor of Lender securing the Obligations and
(iii) such
security interests in and mortgages and liens upon the Collateral
in favor of
such Person are and shall at all times be subject and subordinate
to the
security interests, and liens therein of Lender pursuant to the
terms of an
intercreditor agreement, in form and substance satisfactory to such
Lender,
between such party and Lender; provided, that, Lender shall not
require an
Intercreditor Agreement from such Person in the event the
Collateral securing
such Indebtedness is a cash deposit (other than Qualified Cash) or
a letter of
credit;
(c) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate
proceedings and as to which Borrower or any of its Subsidiaries
shall have set
aside on its books such reserves as may be required pursuant to
GAAP;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and
other Liens
imposed by law incurred in the ordinary course of business for sums
not yet
delinquent or being contested in good faith, if such reserve or
other
appropriate provision, if any, as shall be required by GAAP shall
have been made
in respect thereof;
(e) Liens incurred on deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and
other types of social security, including any Lien on deposits
securing letters
of credit issued in the ordinary course of business consistent with
past
practice in connection therewith, or to secure the performance of
tenders,
statutory obligations, real estate leases, merchant credit
obligations, surety
and appeal bonds, bids, leases, government contracts, performance
and
return-of-money bonds and other similar obligations (exclusive of
obligations
for the payment of borrowed money);
(f) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings
which may have been duly initiated for the review of such judgment
shall not
have been finally terminated or the period within which such
proceedings may be
initiated shall not have expired, and for which Lender in its
discretion may
establish a Reserve;
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(g) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in
any material respect with the ordinary conduct of the business of
Borrower or
any of its Restricted Subsidiaries;
(h) (i) any interest or title of a lessor under any
Capitalized Lease Obligation or operating lease incurred pursuant
to clause (h)
of the definition of "Permitted Indebtedness"; provided, that, such
Liens do not
extend to any property or assets which is not leased property
subject to such
Capitalized Lease Obligation or operating lease; and (ii) Liens
securing
Purchase Money Obligations incurred in the ordinary course of
business and other
Indebtedness incurred pursuant to clause (h) of the definition of
"Permitted
Indebtedness"; provided, that, (A) such Purchase Money Obligations
shall not
exceed the purchase price or other cost of or investment in the
property subject
thereto and shall not be secured by any property of Borrower or any
Restricted
Subsidiary of Borrower other than the property subject thereto and
(B) the Lien
securing such Purchase Money Obligations shall be created prior to
or within 90
days after the later of the acquisition, completion of construction
or
improvement or commencement of full operation of such property;
(i) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in
respect of bankers'
acceptances issued or created for the account of such Person to
facilitate the
purchase, shipment or storage of such inventory or other goods;
(j) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other
property
relating to such letters of credit and products and proceeds
thereof;
(k) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of
Borrower or any of its Restricted Subsidiaries, including rights of
offset and
setoff;
(l) subject to clauses (b)(ii) and (iii) of this Section
1.111, Liens securing Interest Swap Obligations which Interest Swap
Obligations
relate to Indebtedness that is otherwise permitted under this
Agreement
(Interest Swap Obligations may be secured by letters of credit or
deposits of
cash pursuant to clause (e) of this defintion);
(m) Liens on assets of such Person other than Accounts and
Qualified Cash of such Person securing Acquired Indebtedness
incurred in
accordance with Section 9.9 hereof; provided, that:
(i) such Liens secured such Acquired Indebtedness at
the time of and prior to the incurrence of such Acquired
Indebtedness by
Borrower or a Restricted Subsidiary of Borrower and were not
granted in
connection with, or in anticipation of, the incurrence of such
Acquired
Indebtedness by Borrower or a Restricted Subsidiary of
Borrower;
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(ii) such Liens do not extend to or cover any
property or assets of Borrower or of any of its Restricted
Subsidiaries other
than the property or assets that secured the Acquired Indebtedness
prior to the
time such Indebtedness became Acquired Indebtedness of Borrower or
a Restricted
Subsidiary of Borrower and are no more favorable to the lienholders
than those
securing the Acquired Indebtedness prior to the incurrence of such
Acquired
Indebtedness by Borrower or a Restricted Subsidiary of
Borrower.
(n) leases, subleases, licenses and sublicenses granted to
others that do not materially interfere with the ordinary course of
business of
Borrower and its Restricted Subsidiaries;
(o) banker's Liens, rights of setoff and similar Liens with
respect to cash and Cash Equivalents on deposit in one or more bank
accounts in
the ordinary course of business so long as such rights are subject
to the terms
and conditions of a Deposit Account Control Agreement unless such
deposit
account is an Excluded Account;
(p) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of customs duties in
connection with the
importation of goods;
(q) Liens identified on Schedule 9.8 hereto (other than Liens
described in (s) below) to the extent and in the manner such Liens
are in effect
on the date hereof ;
(r) Liens securing obligations with respect to operating
leases and guarantees thereof; provided, that, such Liens do not
extend to or
cover any property of Borrower or any of its Restricted
Subsidiaries other than
the property subject to such leases, any property or rights
(including rights
under subleases) relating to such leased property and the equity
interests of
the lessee in any such lease;
(s) the security interests in and mortgages and liens upon the
Collateral in favor of Senior Secured Note Trustee to secure the
Indebtedness
arising under the Senior Secured Notes (and any Refinancing
Indebtedness in
replacement thereof), provided, that, the security interests in and
mortgages
and liens upon the Collateral in favor of Senior Secured Note
Trustee are and
shall at all times be subject and subordinate to the security
interests, and
liens therein of Lender pursuant to the terms of the Intercreditor
Agreement;
(t) Liens securing Refinancing Indebtedness incurred to
Refinance any Indebtedness that was previously so secured on terms
substantially
similar to than the terms of the Liens securing such Refinanced
Indebtedness,
provided, that, the Indebtedness secured is not increased and the
Lien is not
extended to any additional assets or property that would not have
been security
for the Indebtedness Refinanced;
(u) Liens arising from filing UCC financing statements
reporting leases;
(v) rights of a licensor of Intellectual Property;
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(w) deposits made in the ordinary course of business to secure
liability to insurance carriers;
(x) Liens arising under conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered
into by the
Borrower or any of the Guarantors in the ordinary course of
business.
1.112 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation
which elects
subchapter S status under the Code), limited liability company,
limited
liability partnership, business trust, unincorporated association,
joint stock
corporation, trust, joint venture or other entity or any government
or any
agency or instrumentality or political subdivision thereof.
1.113 "Plan" shall mean an employee benefit plan (as defined in
Section
3(3) of ERISA) which Borrower or any Guarantor sponsors, maintains,
or to which
it makes, is making, or is obligated to make contributions, or in
the case of a
Multiemployer Plan has made contributions at any time during the
immediately
preceding six (6) plan years or with respect to which Borrower or
any Guarantor
may incur liability.
1.114 "Pledged Interests" shall mean, collectively, the Initial
Pledged
Interests and the Additional Pledged Interests; provided, however,
that to the
extent applicable, Pledged Interests shall not include (a) more
than 65% of any
series of the outstanding capital stock of any Foreign Subsidiary
or (b) any of
the capital stock of a Subsidiary of a Foreign Subsidiary.
1.115 "Pledged Securities" shall mean, collectively, the
Pledged
Interests, the Pledged Shares and the Successor Interests.
1.116 "Pledged Shares" shall mean, collectively, the Initial
Pledged
Shares and the Additional Pledged Shares; provided, however, that
Pledged Shares
shall not include (a) more than 65% of any series of the
outstanding capital
stock of any Foreign Subsidiary or (bi) any of the capital stock of
a Subsidiary
of a Foreign Subsidiary.
1.117 "Prime Rate" shall mean the rate from time to time
publicly
announced by Lender, or its successors, as its prime rate, whether
or not such
announced rate is the best rate available at such bank.
1.118 "Prime Rate Loans" shall mean any Revolving Loans or
portion
thereof on which interest is payable based on the Prime Rate in
accordance with
the terms thereof.
1.119 "PUCs" shall mean, collectively, the public utilities
commissions
or boards for any State or any other jurisdiction in which Borrower
or any
Guarantor operates its telecommunications business or any successor
agency, and
any successor, in whole or in part, to its functions or
jurisdictions, sometimes
being referred to herein individually as a "PUC".
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1.120 "Purchase Money Obligations" means any Indebtedness secured
by a
Lien on assets related to the business of Borrower or any Guarantor
and any
additions and accessions thereto which are purchased or constructed
by Borrower
or any Guarantor at any time after September 30, 2004; provided,
that,
(a) the security agreement or conditional sale or other title
retention contract pursuant to which the Lien on such assets is
created
(collectively a "Purchase Money Security Agreement") shall be
entered into
within 90 days after the purchase or substantial completion of the
construction
of such assets and shall at all times be confined solely to the
assets so
purchased or acquired, any additions and accessions thereto and any
proceeds
therefrom,
(b) at no time shall the aggregate principal amount of the
outstanding Indebtedness secured thereby be increased, except in
connection with
the purchase of additions and accessions thereto and except in
respect of fees
and other obligations in respect of such Indebtedness, and
(c) (A) the aggregate outstanding principal amount of
Indebtedness secured thereby (determined on a per asset basis in
the case of any
additions and accessions) shall not at the time such Purchase Money
Security
Agreement is entered into exceed 100% of the purchase price to
Borrower or any
Guarantor of the assets subject thereto or (B) the Indebtedness
secured thereby
shall be with recourse solely to the assets so purchased or
acquired, any
additions and accessions thereto and any proceeds therefrom.
1.121 "Qualified Capital Stock" means any Capital Stock that is
not
Disqualified Capital Stock.
1.122 "Qualified Cash" shall mean cash and Cash Equivalents of
Borrower
and Guarantors which are (a) subject to a first priority perfected
security
interest in favor of Lender (including without limitation, the
execution and
delivery of a Deposit Account Control Agreement or an Investment
Property
Control Agreement, as the case may be); provided, that, cash and
Cash
Equivalents held by Borrower and Guarantors in Excluded Accounts
(but only in
those Excluded Accounts described in clause (i) of the definition
of Excluded
Accounts set forth herein) shall be included in any calculation of
Qualified
Cash, and (b) available to Borrower and Guarantors without
restriction or
condition (exclusive of any cash in the Blocked Accounts).
1.123 "Real Property" shall mean all now owned and hereafter
acquired
real property of Borrower and each Guarantor, including leasehold
interests,
together with all buildings, structures, and other improvements
located thereon
and all licenses, easements and appurtenances relating thereto,
wherever
located.
1.124 "Receivables" shall mean all of the following now owned
or
hereafter arising or acquired property of Borrower and each
Guarantor: (a) all
Accounts; (b) all interest, fees, late charges, penalties,
collection fees and
other amounts due or to become due or otherwise payable in
connection with any
Account; (c) all payment intangibles of Borrower or such Guarantor;
(d)
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letters of credit, indemnities, guarantees, security or other
deposits and
proceeds thereof issued payable to Borrower or any Guarantor or
otherwise in
favor of or delivered to Borrower or any Guarantor in connection
with any
Account; or (e) all other accounts, contract rights, chattel paper,
instruments,
notes, general intangibles and other forms of obligations owing to
Borrower or
any Guarantor, whether from the sale and lease of goods or other
property,
licensing of any property (including Intellectual Property or other
general
intangibles), rendition of services or from loans or advances by
Borrower or any
Guarantor or to or for the benefit of any third person (including
loans or
advances to any Affiliates or Subsidiaries of Borrower or any
Guarantor) or
otherwise associated with any Accounts, Inventory or general
intangibles of
Borrower or any Guarantor (including, without limitation, choses in
action,
causes of action, tax refunds, tax refund claims, any funds which
may become
payable to Borrower or any Guarantor in connection with the
termination of any
Plan or other employee benefit plan and any other amounts payable
to Borrower or
any Guarantor from any Plan or other employee benefit plan, rights
and claims
against carriers and shippers, rights to indemnification, business
interruption
insurance and proceeds thereof, casualty or any similar types of
insurance and
any proceeds thereof and proceeds of insurance covering the lives
of employees
on which Borrower or any Guarantor is a beneficiary).
1.125 "Records" shall mean, as to Borrower and each Guarantor, all
of
such Borrower's and Guarantor's present and future books of account
of every
kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of
lading and other shipping evidence, statements, correspondence,
memoranda,
credit files and other data relating to the Collateral or any
account debtor,
together with the tapes, disks, diskettes and other data and
software storage
media and devices, file cabinets or containers in or on which the
foregoing are
stored (including any rights of Borrower or any Guarantor with
respect to the
foregoing maintained with or by any other person).
1.126 "Refinancing Indebtedness" means any Refinancing by Borrower
or
any Restricted Subsidiary of Borrower of Indebtedness incurred in
accordance
with Section 9.9 hereof (other than pursuant to clause (c), (d),
(e), (f), (g),
(h) or (i) of the definition of "Permitted Indebtedness"), in each
case that
does not:
(a) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed
Refinancing (plus
accrued interest thereon and plus the amount of any premium
required to be paid
under the terms of the instrument governing such Indebtedness and
plus the
amount of fees, expenses and other amounts payable by Borrower in
connection
with such Refinancing); or
(b) create Indebtedness with: (i) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of
the
Indebtedness being Refinanced; or (ii) a final maturity earlier
than the final
maturity of the Indebtedness being Refinanced;
provided, that, (x) if such Indebtedness being Refinanced is
Indebtedness of
Borrower (and is not otherwise guaranteed by a Restricted
Subsidiary of
Borrower), then such Refinancing
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Indebtedness shall be Indebtedness solely of Borrower and (y) if
such
Indebtedness being Refinanced is subordinate or junior to the
Obligations, then
such Refinancing Indebtedness shall be subordinate to the
Obligations at least
to the same extent and in the same manner as the Indebtedness being
Refinanced.
1.127 "Regulatory Event" shall mean any of the following events:
(a)
Agent and/or Lenders become(s) subject to regulation as a
"carrier", a
"telephone company", a "common carrier", a "public utility" or
otherwise under
any applicable liability or common carrier law or governmental
regulation,
Federal, State or local, solely as result of the transactions
contemplated by
this Agreement and the other Financing Agreements, or (b) any
Borrower or
Guarantor becomes subject to a statute or regulation by any
Governmental
Authority different from the statutes or regulations existing as of
the date
hereof and that could have a Material Adverse Effect, except, that,
the
occurrence of such an event under this clause (b) shall not be
considered an
Event of Default so long as (i) the application of such statutes or
regulations
to Borrower and/or its Subsidiaries is being appealed or contested
in good faith
by such Borrower or Guarantor by appropriate proceedings diligently
pursued and
available to such Borrower or Guarantor, and during such appeal or
contest, such
Borrower or Guarantor may continue to operate under the statute or
regulations
that existed prior to the adoption of the statutes or regulations
that could
have a Material Adverse Effect and (ii) the application of such
statute does not
otherwise have a Material Adverse Effect on the ability of Borrower
and
Guarantors to perform their Obligations or on the Collateral, or
(c) the FCC,
any PUC or any other Communications Regulatory Authority issues an
order or
other statement revoking, denying or refusing to renew, or
recommending the
revocation, denial or non-renewal of, any material Permit (except
for any such
order or statement that is being appealed or contested in good
faith by such
Borrower or Guarantor by appropriate proceedings diligently pursued
and
available to such Borrower or Guarantor, so long as during such
appeal or
contest, such Borrower or Guarantor may continue to receive the
benefit of, and
operate pursuant to, such Permit) except where the failure to have
such a Permit
does not or could not reasonably be expected to result in a
Material Adverse
Effect.
1.128 "Reserves" shall mean as of any date of determination,
such
amounts as Lender may from time to time establish and revise in
good faith
reducing the amount of Revolving Loans which would otherwise be
available to
Borrower under the lending formula(s) provided for herein: (a) to
reflect
events, conditions, contingencies or risks which, as determined by
Lender in
good faith, adversely affect, or would have a reasonable likelihood
of adversely
affecting, either (i) the Collateral or any other property which is
security for
the Obligations, or the amount that might be received by Lender
from the sale or
other disposition or realization upon such Collateral, or (ii) the
assets or
business of Borrower or any Guarantor or (iii) the security
interests and other
rights of Lender in the Collateral (including the enforceability,
perfection and
priority thereof) or (b) to reflect Lender's good faith belief that
any
collateral report or financial information furnished by or on
behalf of Borrower
or any Guarantor to Lender is or may have been incomplete,
inaccurate or
misleading in any material respect, or (c) in respect of any state
of facts
which Lender determines in good faith constitutes a Default or
an
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Event of Default. Without limiting the generality of the foregoing,
Reserves
may, at Lender's option, be established to reflect: (i) dilution
with respect to
the Accounts (based on the ratio of the aggregate amount of
non-cash reductions
in Accounts for any period to the aggregate dollar amount of the
sales of such
Borrower for such period) as calculated by Lender for any period is
or is
reasonably anticipated to be greater than five (5%) percent; (ii)
returns,
discounts, claims, credits and allowances of any nature that are
not paid
pursuant to the reduction of Accounts; (iii) upon the occurrence of
a Default or
an Event of Default past due amounts to owners and lessors of
premises where any
Collateral is located and, in the case of the principal executive
office
locations of Borrower and each Guarantor for which Lender has not
received a
Collateral Access Agreement, Lender may establish a reserve with
respect to each
such location in an amount equal to up to two (2)months rent;
provided, that, no
such reserve shall be established earlier than ninety (90) days
after (x) the
date hereof, in respect of Borrower's current principal executive
office and (y)
Borrower or such Guarantor, enters into a lease with respect to any
new
principal executive office; and (iv) a change in the average
monthly churn rate
for business class customers over any trailing twelve (12) month
period to more
than two (2%) percent, provided, that, the amount of such Reserve,
if the
increase in the churn rate is more than two (2%) percent but less
than or equal
to three (3%) percent, shall not exceed ten (10)% of the value of
Eligible
Accounts, provided, that, Lender may establish additional Reserves
in amounts to
be determined by Lender if such churn rate increases during such
period by to an
amount in excess of three (3%) percent. To the extent that Lender
may revise the
lending formula used to determine the Borrowing Base or establish
new criteria
or revise existing criteria for Eligible Accounts so as to address
any
circumstances, condition or event or contingency in a manner
satisfactory to
Lender, Lender shall not establish a Reserve for the same purpose.
The amount of
any Reserve established by Lender shall have a reasonable
relationship to the
event, condition or other matter which is the basis for such
reserve as
determined by Lender in good faith and to the extent that such
Reserve
established in respect of past due amounts that are payable to
third parties
(including amounts past due to taxing authorities or any other
Governmental
Authority) pursuant to clause (iii) of the immediately preceding
sentence,
Lender may, at its option, deduct the amount of such Reserve from
the Maximum
Credit, at any time that such limit is less than the amount of the
Borrowing
Base. In establishing a Reserve, Lender shall act as asset based
lenders
similarly situated would act, with similar rights and providing a
credit
facility of the type and with the Collateral and information then
available to
it set forth herein, would act in such circumstances.
1.129 "Responsible Officer" shall mean the chief executive officer,
the
chief financial officer, general counsel and treasurer of
Borrower.
1.130 "Restricted Subsidiary" of any Person means any Subsidiary
of
such Person that at the time of determination is not an
Unrestricted Subsidiary.
1.131 "Revolving Loans" shall mean the loans now or hereafter made
by
or on behalf of Lender for the account of Borrower on a revolving
basis
(involving advances, repayments and readvances) as set forth in
Section 2.1
hereof.
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1.132 "Secured Indebtedness Measurement Period" has the meaning
set
forth in the definition of Secured Indebtedness Determination
Date.
1.133 "Secured Indebtedness to Cash Flow Ratio" means the ratio of
(i)
the Consolidated Total Indebtedness as of the date of calculation
(the "Secured
Indebtedness Determination Date") that is secured by a Lien on any
assets of
such Person or its Subsidiaries to (ii) the Consolidated Cash Flow
for the four
full consecutive fiscal quarters immediately preceding such Secured
Indebtedness
Determination Date for which financial information is available
(the "Secured
Indebtedness Measurement Period"). For purposes of determining the
amount of
Indebtedness of Borrower and its Restricted Subsidiaries as of any
date of
determination, the total committed amounts under all revolving
Credit Facilities
will be deemed to be outstanding as of such Secured Indebtedness
Determination
Date. In addition, for purposes of calculating Consolidated Cash
Flow for the
Secured Indebtedness Measurement Period ending immediately prior to
the relevant
Secured Indebtedness Determination Date:
(a) any Person that is a Restricted Subsidiary on the Secured
Indebtedness Determination Date (or would become a Restricted
Subsidiary on such
Secured Indebtedness Determination Date in connection with the
transaction that
requires the determination of such Consolidated Cash Flow) will be
deemed to
have been a Restricted Subsidiary at all times during such Secured
Indebtedness
Measurement Period;
(b) any Person that is not a Restricted Subsidiary on such
Secured Indebtedness Determination Date (or would cease to be a
Restricted
Subsidiary on such Secured Indebtedness Determination Date in
connection with
the transaction that requires the determination of such
Consolidated Cash Flow)
will be deemed not to have been a Restricted Subsidiary at any time
during such
Secured Indebtedness Measurement Period; and
(c) if since the beginning of the Secured Indebtedness
Measurement Period, Borrower, any Restricted Subsidiary or any
Person that
subsequently became a Restricted Subsidiary or was merged with or
into Borrower
or any Restricted Subsidiary since the beginning of the Secured
Indebtedness
Measurement Period shall have in any manner (x) acquired (including
through an
Asset Acquisition or the commencement of activities constituting
such operating
business) or (y) disposed of (including by way of an Asset Sale or
the
termination or discontinuance of activities constituting such
operating
business) any operating business in each case during such Secured
Indebtedness
Measurement Period or after the end of such period and on or prior
to such
Secured Indebtedness Determination Date, such calculation will be
made on a pro
forma basis in accordance with GAAP and giving effect to any
increase or
reduction of any associated Consolidated Cash Flow attributable
thereto
(including any pro forma adjustments (including cost-savings
adjustments)
calculated on a basis consistent with Regulation S-X under the
Securities Act),
as if, in the case of an Asset Acquisition or the commencement of
activities
constituting such operating business, all such transactions had
been consummated
on the first day of such Secured Indebtedness Measurement Period
and, in the
case of an Asset Sale or termination or discontinuance of
activities
constituting such operating
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business, all such transactions had been consummated prior to the
first day of
such Secured Indebtedness Measurement Period.
1.134 "Scheduled Termination Date" shall have the meaning set forth
in
Section 12.1 hereof.
1.135 "Secured Indebtedness Determination Date" has the meaning
set
fort in the definition of Secured Indebtedness to Cash Flow
Ratio.
1.136 "Securities Accounts" shall mean, collectively, with respect
to
Borrower and each Guarantor, all "securities accounts" as such term
is defined
in the UCC other than any Excluded Accounts.
1.137 "Securities Collateral" shall mean, collectively, the
Pledged
Securities, the Intercompany Notes and the Distributions.
1.138 "Senior Secured Note Indenture" shall mean the Indenture,
dated
September 30, 2004, by and among Borrower, Guarantors, as
Guarantors and Senior
Secured Note Trustee, as trustee, with respect to the Senior
Secured Notes, as
the same now exists or may hereafter be amended, modified,
supplemented,
extended, renewed, restated or replaced.
1.139 "Senior Secured Note Documents shall mean, collectively,
the
Senior Secured Note Indenture, the Senior Secured Notes and the
documents listed
on Schedule 1.139 hereto, as the same now exist or may hereafter be
amended
modified, supplemented, extended, renewed restated or replaced.
1.140 "Senior Secured Notes" shall mean, collectively, the
Senior
Secured Notes due 2009 and the related guarantees issued by
Borrower or the
Guarantor, respectively, pursuant to the Senior Secured Note
Indenture in the
original aggregate principal amount of $150,000,000, as the same
now exist or
may hereafter be amended, modified, supplemented, extended,
renewed, restated,
refinanced or replaced.
1.141 "Senior Secured Note Trustee" shall mean US Bank,
National
Association, as trustee under the Senior Secured Note Indenture and
any
successor, replacement or additional trustee and their respective
successors and
assigns.
1.142 "Senior Secured Note Permitted Credit Facility" means the
term
"Credit Facility" as set forth in the Senior Secured Note Indenture
as in effect
on the date hereof.
1.143 "Solvent" shall mean, at any time with respect to any
Person,
that at such time such Person (a) is able to pay its debts as they
mature and
has (and has a reasonable basis to believe it will continue to
have) sufficient
capital (and not unreasonably small capital) to carry on its
business consistent
with its practices as of the date hereof, and (b) the assets and
properties
(whether recorded or unrecorded) of such Person at a fair valuation
(and
including as assets for
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this purpose at a fair valuation all rights of subrogation,
contribution or
indemnification arising pursuant to any guarantees given by such
Person) are
greater than the Indebtedness of such Person, and including
subordinated and
contingent liabilities computed at the amount which, such person
has a
reasonable basis to believe, represents an amount which can
reasonably be
expected to become an actual or matured liability (and including as
to
contingent liabilities arising pursuant to any guarantee the face
amount of such
liability as reduced to reflect the probability of it becoming a
matured
liability).
1.144 "Special Property shall mean:
(a) any personal property or other asset in respect of which
perfection of a lien is not either: (i) governed by the UCC or (ii)
effected by
appropriate evidence of the Lien being filed in either the United
States
Copyright Office or the United States Patent and Trademark
Office;
(b) any personal property or other asset that is subject to a
Lien securing a Purchase Money Obligation or a Capitalized Lease
Obligation
permitted under the Indenture if the contract or other agreement in
which such
Lien is granted (or the documentation providing for such
obligation) prohibits
the creation of a lien on such personal property or other
assets;
(c) any permit, lease, license, contract or instrument now or
hereafter held or owned by any pledgor if the grant of a security
interest in
such, permit, lease, license, contract or instrument, under the
terms thereof or
under any applicable legal requirement, (i) is prohibited and would
result in
the termination thereof or give other parties the right to
terminate such
permit, lease, license, contract or instrument or accelerate such
pledgor's
obligations thereunder or would result in a default thereunder that
otherwise
materially and adversely alter such pledgor's rights, titles and
interests
thereunder (including upon the giving of notice or the lapse of
time or both) or
(ii) would require the consent of any Person, other than any
pledgor; and
(d) Excluded Accounts;
provided, however, that, in each case described in clauses (a),
(b), (c) and (d)
of this definition, such property shall constitute "Special
Property" only to
the extent and for so long as such permit lease, license contract,
instrument or
other agreement or legal requirement applicable to such property
validly
prohibits the creation of a Lien on such property in favor of the
Lender and,
upon the termination of such prohibition (howsoever occurring),
such property
shall case to constitute "Special Property."
1.145 "Subordinated Indebtedness" means Indebtedness of Borrower or
any
Guarantor that is subordinated in right of payment to the
Obligations, pursuant
to a written agreement, in form and substance satisfactory to the
Lender,
between the holder of such Indebtedness and the Lender.
1.146 "Subsidiary" or "subsidiary" shall mean, with respect to
any
Person, any
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corporation, limited liability company, limited liability
partnership or other
limited or general partnership, trust, association or other
business entity of
which an aggregate of at least a majority of the outstanding
Capital Stock or
other interests entitled to vote in the election of the board of
directors of
such corporation (irrespective of whether, at the time, Capital
Stock of any
other class or classes of such corporation shall have or might have
voting power
by reason of the happening of any contingency), managers, trustees
or other
controlling persons, or an equivalent controlling interest therein,
of such
Person is, at the time, directly or indirectly, owned by such
Person and/or one
or more subsidiaries of such Person.
1.147 "Successor Interests" shall mean, collectively, with respect
to
Borrower and each Guarantor, all shares of each class of the
capital stock of
the successor corporation or interests or certificates of the
successor limited
liability company, partnership or other entity owned by Borrower or
such
Guarantor (unless such successor is such Person itself) formed by
or resulting
from any consolidation or merger in which any person listed in
Schedule 1.147
annexed hereto is not the surviving entity; provided, however, that
to the
extent applicable, Successor Interest shall not include (a) more
than 65% of any
series of the outstanding capital stock of any Foreign Subsidiary
or (b) any of
the capital stock of a Subsidiary of a Foreign Subsidiary.
1.148 "Telecommunication Assets" shall mean, with respect to
any
Person, Equipment and other properties or assets (whether tangible
or
intangible) used in the telecommunications business, including,
without
limitation, fiber optic cable, in-building wiring, metro fiber,
long haul fiber,
switches, innerducts, fiber conduits, in-building wiring,
rights-of-way, rights
with respect to indefeasible rights of use (which is the right to
use a
telecommunications system, usually an underground cable, with most
of the rights
and duties of ownership, but without the right to control or manage
the facility
and depending upon the particular agreement, without any right to
salvage or
duty to dispose of the system's cable at the end of its useful
life), minimum
assignable ownership units (which is capacity on a
telecommunications system,
usually an underground fiber optic cable, acquired on an ownership
basis) or
minimum investment units (or similar interests) in fiber optic
cable and
international or domestic telecommunications switches or other
transmission
facilities, including monitoring and related administrative support
facilities
(or Capital Stock of a Person that becomes a Subsidiary, the assets
of which
consist primarily of any such Telecommunications Assets), in each
case
purchased, or acquired through a Capital Lease, by Borrower.
1.149 "Trademarks" shall mean, collectively, with respect to
Borrower
and each Guarantor, all trademarks (including service marks),
slogans, logos,
certification marks, trade dress, uniform resource locations
(URL's), domain
names, corporate names and trade names, whether registered or
unregistered,
owned by or assigned to Borrower or such Guarantor and all
registrations and
applications for the foregoing (whether statutory or common law and
whether
established or registered in the United States or any other country
or any
political subdivision thereof), together with any and all (i)
rights and
privileges arising under applicable law with respect to Borrower's
or such
Guarantor's use of any trademarks and (ii) reissues, continuations,
extensions
and renewals thereof.
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1.150 "UCC" shall mean the Uniform Commercial Code as in effect in
the
State of North Carolina, and any successor statute, as in effect
from time to
time (except that terms used herein which are defined in the
Uniform Commercial
Code as in effect in the State of North Carolina on the date hereof
shall
continue to have the same meaning notwithstanding any replacement
or amendment
of such statute except as Lender may otherwise determine).
1.151 "Unrestricted Subsidiary" of any Person means:
(a) any Subsidiary of such Person that at the time of
determination shall be or continue to be designated an Unrestricted
Subsidiary
by the Board of Directors of such Person in the manner provided
below; and
(b) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any
newly
acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any
Lien on any
property of, Borrower or any other Subsidiary of Borrower that is
not a
Subsidiary of the Subsidiary to be so designated; provided,
that:
(i) Borrower certifies to Lender that such
designation complies with Section 9.11 hereof; and
(ii) each Subsidiary to be so designated and each of
its Subsidiaries has not at the time of designation, and does not
thereafter,
create, incur, issue, assume, guarantee or otherwise become
directly or
indirectly liable with respect to any Indebtedness pursuant to
which the lender
has recourse to any of the assets of Borrower or any of its
Restricted
Subsidiaries.
For purposes of making the determination of whether any such
designation of a
Subsidiary as an Unrestricted Subsidiary complies with Section 9.11
hereof, the
portion of the fair market value of the net assets of such
Subsidiary of
Borrower at the time that such Subsidiary is designated as an
Unrestricted
Subsidiary that is represented by the interest of Borrower and its
Restricted
Subsidiaries in such Subsidiary, in each case as determined in good
faith by the
Board of Directors of Borrower, or, if less, the amount of the
value of the
Investment in such Subsidiary when made, shall be deemed to be an
Investment.
Such designation will be permitted only if such Investment would be
permitted at
such time under the covenant described under Section 9.11 hereof.
The Board of
Directors may designate any Unrestricted Subsidiary to be a
Restricted
Subsidiary only if:
(A) immediately after giving effect to such
designation, Borrower is able to incur at least $1.00 of additional
Indebtedness
(other than Permitted Indebtedness) pursuant to Section 9.9(a)
hereof; and
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(B) immediately before and immediately after
giving effect to such designation, no Default or Event of Default
shall have
occurred and be continuing. Any such designation by the Board of
Directors shall
be evidenced to Lender by promptly filing with Lender a copy of the
Board
Resolution giving effect to such designation and an officers'
certificate
certifying that such designation complied with the foregoing
provisions.
1.152 "Voting Stock" shall mean with respect to any Person, (a) one
(1)
or more classes of Capital Stock of such Person having general
voting powers to
elect at least a majority of the board of directors, managers or
trustees of
such Person, irrespective of whether at the time Capital Stock of
any other
class or classes have or might have voting power by reason of the
happening of
any contingency, and (b) any Capital Stock of such Person
convertible or
exchangeable without restriction at the option of the holder
thereof into
Capital Stock of such Person described in clause (a) of this
definition.
1.153 "Weighted Average Life to Maturity" means, when applied to
any
Indebtedness at any date, the number of years obtained by dividing
(a) the then
outstanding aggregate principal amount of such Indebtedness into
(b) the sum of
the total of the products obtained by multiplying (i) the amount of
each then
remaining installment, sinking fund, serial maturity or other
required payment
of principal, including payment at final maturity, in respect
thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which
will elapse
between such date and the making of such payment.
1.154 "Wholly Owned Subsidiary" of any Person means any Subsidiary
of
such Person of which all the outstanding capital stock (other than
in the case
of a foreign Subsidiary, directors' qualifying shares or an
immaterial amount of
shares required to be owned by other Persons pursuant to applicable
law) is
owned by such Person or any Wholly Owned Subsidiary of such
Person.
SECTION 2. CREDIT FACILITIES
2.1 Revolving Loans.
(a) Subject to and upon the terms and conditions contained
herein, Lender agrees to make Revolving Loans to Borrower from time
to time in
amounts requested by Borrower up to the aggregate amount
outstanding at any one
time equal to the lesser of: (i) the Borrowing Base at such time or
(ii) the
Maximum Credit.
(b) Except in Lender's discretion or as otherwise provided
herein, (i) the aggregate principal amount of t
