AMENDED AND RESTATED 364-DAY
COMPETITIVE ADVANCE AND REVOLVING
CREDIT FACILITY AGREEMENT
Dated as of December 14, 2001
among
AT&T CORP.,
THE LENDERS PARTY HERETO,
CITIBANK, N.A., CREDIT SUISSE FIRST BOSTON,
DEUTSCHE BANK AG NEW YORK BRANCH and
GOLDMAN
SACHS CREDIT PARTNERS L.P.,
as Administrative Agents,
and
CITIBANK, N.A.,
as Paying Agent,
with
SALOMON SMITH BARNEY INC., CREDIT SUISSE
FIRST BOSTON, DEUTSCHE BANC
ALEX. BROWN INC. and GOLDMAN SACHS
CREDIT PARTNERS L.P.,
as Joint Lead Arrangers and Bookrunners
and
BANK ONE, NA, THE BANK OF TOKYO-
MITSUBISHI, LTD., NEW YORK BRANCH, BANK OF
AMERICA, N.A., BARCLAYS BANK PLC, BNP
PARIBAS, THE ROYAL BANK OF SCOTLAND PLC,
NEW YORK BRANCH, INTESABCI, NEW YORK
BRANCH, THE FUJI BANK, LIMITED, HSBC BANK
USA, and FIRST UNION NATIONAL BANK,
as Co-Arrangers
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TABLE OF CONTENTS
Page
ARTICLE I Definitions
SECTION 1.01. Defined Terms..........................................1
ARTICLE II The Credits
SECTION 2.01. Commitments...........................................17
SECTION 2.02. Loans.................................................17
SECTION 2.03. Competitive Bid Procedure.............................18
SECTION 2.04. Standby Borrowing Procedure...........................20
SECTION 2.05. Conversion and Continuation of Standby Loans..........20
SECTION 2.06. Fees..................................................21
SECTION 2.07. Repayment of Loans; Evidence of Debt..................22
SECTION 2.08. Interest on Loans.....................................22
SECTION 2.09. Default Interest......................................23
SECTION 2.10. Alternate Rate of Interest............................23
SECTION 2.11. Termination and Reduction of Commitments..............23
SECTION 2.12. Prepayment............................................24
SECTION 2.13. Reserve Requirements; Change in Circumstances.........24
SECTION 2.14. Change in Legality....................................26
SECTION 2.15. Indemnity.............................................26
SECTION 2.16. Pro Rata Treatment....................................27
SECTION 2.17. Sharing of Setoffs....................................27
SECTION 2.18. Payments..............................................28
SECTION 2.19. Taxes.................................................28
SECTION 2.20. Mandatory Assignment; Commitment Termination..........30
ARTICLE III Representations and Warranties
SECTION 3.01. Organization; Powers..................................30
SECTION 3.02. Authorization.........................................31
SECTION 3.03. Enforceability........................................31
SECTION 3.04. Governmental Approvals................................31
SECTION 3.05. Financial Statements..................................31
SECTION 3.06. Litigation; Compliance with Laws......................31
SECTION 3.07. Federal Reserve Regulations...........................32
SECTION 3.08. Investment Company Act; Public Utility
Holding Company Act...................................32
SECTION 3.09. Use of Proceeds.......................................32
SECTION 3.10. No Material Misstatements.............................32
ARTICLE IV Conditions of Effectiveness and of Lending
SECTION 4.01. All Borrowings........................................32
SECTION 4.02. Closing Date..........................................33
ARTICLE V Covenants
SECTION 5.01. Existence.............................................33
SECTION 5.02. Financial Statements, Reports, Etc....................33
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SECTION 5.03. Maintaining Records...................................34
SECTION 5.04. Use of Proceeds.......................................34
SECTION 5.05. Consolidations, Mergers, Sales of Assets
and Separation Transactions...........................34
SECTION 5.06. Limitations on Liens..................................35
SECTION 5.07. Limitations on Sale and Leaseback Transactions........35
SECTION 5.08. Total Debt to EBITDA Ratio............................35
ARTICLE VI Events of Default
ARTICLE VII The Agents
ARTICLE VIII Miscellaneous
SECTION 8.01. Notices...............................................39
SECTION 8.02. Survival of Agreement.................................39
SECTION 8.03. Binding Effect........................................39
SECTION 8.04. Successors and Assigns................................40
SECTION 8.05. Expenses; Indemnity...................................42
SECTION 8.06. Applicable Law........................................42
SECTION 8.07. Waivers; Amendment....................................43
SECTION 8.08. Entire Agreement......................................43
SECTION 8.09. Severability..........................................43
SECTION 8.10. Counterparts..........................................43
SECTION 8.11. Headings..............................................43
SECTION 8.12. Jurisdiction, Etc.....................................43
SECTION 8.13. Waiver of Jury Trial...................................1
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Exhibits and Schedules
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Opinion of Counsel for AT&T Corp.
Exhibit D Form of Note
Exhibit E Form of AT&T Business Guaranty
Schedule 2.01 Commitments
AMENDED AND RESTATED 364-DAY COMPETITIVE ADVANCE AND REVOLVING
CREDIT FACILITY AGREEMENT (the "Agreement") dated as of December [__], 2001,
among AT&T CORP., a New York corporation (the "Borrower"), the lenders listed in
Schedule 2.01 (the "Lenders"), CITIBANK, N.A. ("Citibank"), CREDIT SUISSE FIRST
BOSTON ("CSFB"), DEUTSCHE BANK AG NEW YORK BRANCH ("DB") and GOLDMAN SACHS
CREDIT PARTNERS L.P. ("GSCP"), as administrative agents for the Lenders (in such
capacity, the "Administrative Agents"), Citibank, as paying agent for the
Lenders (in such capacity, the "Paying Agent") and with SALOMON SMITH BARNEY
INC., CSFB, DEUTSCHE BANC ALEX. BROWN INC. ("DBAB") and GSCP, as joint lead
arrangers and bookrunners (the "Joint Lead Arrangers").
PRELIMINARY STATEMENTS
(1) The Borrower is a party to that certain 364-Day Competitive Advance and
Revolving Credit Facility Agreement dated as of December 28, 2000, among the
Borrower, the lenders party thereto, the co-arrangers party thereto, The Chase
Manhattan Bank ("Chase"), CSFB and GSCP, as administrative agents, Chase, as
paying agent, and Chase Securities Inc., CSFB and GSCP, as joint lead arrangers
and bookrunners (the "Existing Bank Agreement").
(2) The parties hereto have agreed to amend and restate the Existing Bank
Agreement, on the terms and conditions hereinafter set forth, to provide for,
among other things, a reduction in the Total Commitment of the Lenders
hereunder.
(3) The Borrower has requested that the Lenders continue to extend credit to the
Borrower to enable it to borrow on a standby revolving credit basis on and after
the date hereof and at any time and from time to time prior to the Maturity Date
(as herein defined) a principal amount not in excess of $8,000,000,000 at any
time outstanding. The Borrower has also requested that the Lenders continue to
provide a procedure pursuant to which the Borrower may invite the Lenders to bid
on an uncommitted basis on short-term borrowings by the Borrower maturing on or
prior to the Maturity Date. The proceeds of such borrowings are to be used to
refinance the Existing Bank Agreement (as hereinafter defined) and for other
general corporate purposes of the Borrower, including the repayment of maturing
commercial paper of the Borrower. The Lenders are willing to extend such credit
to the Borrower on the terms and subject to the conditions herein set forth.
Accordingly, the Borrower, the Lenders and the Agents agree that, effective as
of the Closing Date, the Existing Bank Agreement is hereby amended and restated
in its entirety to read as follows:
DEFINITIONS
DEFINED TERMS. As used in this Agreement, the following terms shall have the
meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Standby Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance
with the provisions of Article II.
"Administrative Agents" shall have the meaning specified in
the recital of parties to this Agreement.
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.06(c).
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"Affiliate" shall mean, when used with respect to a specified
person, another person that directly or indirectly controls or is
controlled by or is under common control with the person specified.
"Agent Parties" shall mean the Agents and the Joint Lead
Arrangers.
"Agents" shall mean the Administrative Agents and the Paying
Agent.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof, "Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Paying Agent as its prime
rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly
announced as effective. For purposes hereof, "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as released on the
next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so released for any day which is a Business
Day, the arithmetic average (rounded upwards to the next 1/100th of
1%), as determined by the Paying Agent, of the quotations for the day
of such transactions received by the Paying Agent from three Federal
funds brokers of recognized standing selected by it. If for any reason
the Paying Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or
failure of the Paying Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Applicable Facility Fee Percentage" shall mean on any date, a
percentage per annum determined by reference to the Public Debt Ratings
in effect on such date as set forth below:
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APPLICABLE FACILITY FEE PERCENTAGE PRICING GRID
APPLICABLE
PUBLIC DEBT FACILITY
RATINGS FEE
S&P/MOODY'S PERCENTAGE
----------- ----------
Level 1
Greater than or 0.075%
equal
to A and A2
Level 2
Greater than or 0.085%
equal to
A- or A3 and
A-1 and P-1 but
less than Level 1
Level 3
Greater than or 0.10%
equal to A- or
A3 and A-2 and
P-2 but less
than Level 2
Level 4
Greater than or 0.10%
equal to BBB+
or Baa1 but less
than Level 3
Level 5
Greater than or
equal to BBB or
Baa2 but less 0.125%
than Level 4
Level 6
Less than BBB
and Baa2 0.175%
"Applicable Margin" shall mean on any date, with respect to
Eurodollar Standby Loans, a percentage per annum determined by
reference to the Public Debt Ratings in effect on such date as set
forth below:
4
APPLICABLE MARGIN PRICING GRID
PUBLIC DEBT
RATINGS APPLICABLE
S&P/MOODY'S MARGIN
Level 1
Greater than or 0.325%
equal
to A and A2
Level 2
Greater than or 0.415%
equal to
A- or A3 and
A-1 and P-1 but
less than Level 1
Level 3
Greater than or 0.525%
equal to A- or
A3 and A-2 and
P-2 but less
than Level 2
Level 4
Greater than or 0.65%
equal to BBB+
or Baa1 but
less
than Level 3
Level 5
Greater than or
equal to BBB or
Baa2 but less 0.875%
than Level 4
Level 6
Less than BBB
and Baa2 1.325%
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee with the consent of
the Borrower, and accepted by the Paying Agent in accordance with
Section 8.04(e), substantially in the form of Exhibit B hereto.
"AT&T Broadband" means the Borrower's broadband business;
provided that for purposes of the definition of "Indebtedness", "AT&T
Broadband" shall mean any Person or Persons (whether existing as of the
date hereof or subsequently formed) holding any significant portion of
the Borrower's broadband business upon consummation of a Separation
Transaction.
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"AT&T Business" means a Person (whether existing as of the
date hereof or subsequently formed) that holds all or substantially all
of the Borrower's consumer services and business services businesses
upon consummation of a Separation Transaction involving AT&T Broadband.
"AT&T Business Spinoff" has the meaning set forth in Section
5.05(c).
"AT&T Latin America" means AT&T Latin America Corp., a
Delaware corporation.
"At Home Corporation" means At Home Corporation, a Delaware
corporation.
"Attributable Debt" shall mean, as of the date of its
determination, the present value (discounted semiannually at an
interest rate implicit in the terms of the lease) of the obligation of
a lessee for rental payments pursuant to any Sale and Leaseback
Transaction (reduced by the amount of the rental obligations of any
sublessee of all or part of the same property) during the remaining
term of such Sale and Leaseback Transaction (including any period for
which the lease relating thereto has been extended), such rental
payments not to include amounts payable by the lessee for maintenance
and repairs, insurance, taxes, assessments and similar charges and for
contingent rents (such as those based on sales); provided, however,
that in the case of any Sale and Leaseback Transaction in which the
lease is terminable by the lessee upon the payment of a penalty,
Attributable Debt shall mean the lesser of the present value of (a) the
rental payments to be paid under such Sale and Leaseback Transaction
until the first date (after the date of such determination) upon which
it may be so terminated plus the then applicable penalty upon such
termination and (b) the rental payments required to be paid during the
remaining term of such Sale and Leaseback Transaction (assuming such
termination provision is not exercised).
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Board of Directors" shall mean the Board of Directors of the
Borrower or any duly authorized committee thereof.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders (or, in the case of a Competitive Borrowing, by the
Lender or Lenders whose Competitive Bids have been accepted pursuant to
Section 2.03) on a single date and as to which a single Interest Period
is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"Closing Date" shall mean the date hereof.
6
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
Commitment of such Lender as set forth in Schedule 2.01 hereto.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by the Borrower pursuant to Section 2.03(d) in the
form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.03(b), (i) in the case of a
Eurodollar Loan, the Margin, and (ii) in the case of a Fixed Rate Loan,
the fixed rate of interest offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or
Lenders whose Competitive Bids for such Borrowing have been accepted by
the Borrower under the bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Lender to the
Borrower pursuant to the bidding procedure described in Section 2.03.
Each Competitive Loan shall be a Eurodollar Competitive Loan or a Fixed
Rate Loan.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Net Tangible Assets" shall mean, at any date, as
to the Borrower, the total assets appearing on the most recently
prepared consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of the most recent fiscal
quarter of the Borrower for which such balance sheet is available,
prepared in accordance with GAAP, less (a) all current liabilities as
shown on such balance sheet and (b) Intangible Assets.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States
of America.
"Equity Interests" means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other ownership
or profit interests in) such Person or
7
warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other
ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are authorized or otherwise existing on any
date of determination.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan
or Eurodollar Standby Loan.
"Eurodollar Standby Loan" shall mean any Standby Loan bearing
interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Existing Bank Agreement" shall have the meaning set forth in
Preliminary Statement No. (1).
"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Fee Letter" shall mean the Fee Letter dated October 19, 2001,
among the Borrower, the Joint Lead Arrangers, DB and Citibank.
"Fees" shall mean the Facility Fee, the Utilization Fee and
the Administrative Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Assistant
Treasurer of such corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of
a decimal to no more than four decimal places) specified by the Lender
making such Loan in its Competitive Bid.
"Funded Debt" shall mean any Indebtedness maturing by its
terms more than one year from the date of the determination thereof,
including any Indebtedness renewable or extendible at the option of the
obligor to a date later than one year from the date of the
determination thereof.
8
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Indebtedness" of any Person shall mean all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such Person or for which such Person is
responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds to or invest in, others or otherwise), excluding
indebtedness of AT&T Latin America and Monetized Debt; provided that
for purposes of determining compliance with Section 5.08, (a)
Indebtedness in the form of guarantees entered into by the Borrower or
its Subsidiaries or for which the Borrower or any of its Subsidiaries
is responsible or liable shall exclude (i) keep-well and other similar
agreements to advance or supply funds (x) for the purchase or payment
of any primary obligation of any other Person (the "primary obligor")
or (y) to maintain working capital or equity capital of the primary
obligor or otherwise maintain the net worth or solvency of the primary
obligor and (ii) guarantees of obligations for which cross-guarantees
or cross-indemnifications in favor of the Borrower or such Subsidiary
from AT&T Wireless Services, Inc., Liberty Media Corporation, AT&T
Corp., AT&T Broadband or AT&T Business exist and (b) Indebtedness shall
be calculated net of cash and cash equivalents held by the Borrower and
its Consolidated Subsidiaries on the date of determination (other than
cash and cash equivalents held by AT&T Latin America).
"Intangible Assets" shall mean the value (net of any
applicable reserves), as shown on or reflected in the most recently
prepared consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of the most recent fiscal
quarter of the Borrower of: (i) all trade names, trademarks, licenses,
patents, copyrights and goodwill; (ii) organizational costs; and (iii)
deferred charges (other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible assets
being amortized); but in no event shall the term "Intangible Assets"
include product development costs.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable thereto and, in the case
of a Eurodollar Loan with an Interest Period of more than three months'
duration or a Fixed Rate Loan with an Interest Period of more than 90
days' duration, each day that would have been an Interest Payment Date
for such Loan had successive Interest Periods of three months' duration
or 90 days' duration, as the case may be, been applicable to such Loan
and, in addition, the date of any conversion of such Loan to a Loan of
a different Type.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing or on
the last day of the immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on
the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect, (b) as to any ABR Borrowing, the
period commencing on the date of
9
such Borrowing or on the last day of the immediately preceding Interest
Period applicable to such Borrowing, as the case may be, and ending on
the earliest of (i) the next succeeding March 31, June 30, September 30
or December 31, (ii) the Maturity Date, and (iii) the date such
Borrowing is converted to a Borrowing of a different Type in accordance
with Section 2.05 or repaid or prepaid in accordance with Section 2.07
or Section 2.12 and (c) as to any Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer to make the Fixed
Rate Loans comprising such Borrowing were extended, which shall not be
earlier than seven days after the date of such Borrowing or later than
360 days after the date of such Borrowing; provided, however, that if
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans only, such next succeeding
Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Joint Lead Arrangers" shall have the meaning specified in the
recital of parties to this Agreement.
"LIBO Rate" shall mean, with respect to each Interest Period,
a rate of interest determined on the basis of at least two offered
rates for deposits in United States dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on the Reuters Screen LIBO Page as of 11:00 a.m. (London
time) on the day that is two Business Days prior to the first day of
such Interest Period. If at least two such offered rates appear on the
Reuters Screen LIBO Page, the rate with respect to each Interest Period
will be the arithmetic average (rounded upwards to the next 1/16th of
1%) of such offered rates. If fewer than two offered rates appear,
"LIBO Rate" in respect of any Interest Period will be determined on the
basis of the rates at which deposits in United States dollars are
offered by the Paying Agent at approximately 11:00 a.m. (London time)
on the day that is two Business Days preceding the first day of such
Interest Period to prime banks in the London interbank market for a
period equal to such Interest Period commencing on the first day of
such Interest Period.
"Lien" means any mortgage, pledge, security interest, lien,
charge or other encumbrance, but shall not include any of the foregoing
types of encumbrances that are incidental to the conduct of the
business of the Borrower or any Restricted Subsidiary or the ownership
of the property and assets of any of them and that were not incurred in
connection with the incurrence of any Indebtedness. Such incidental
encumbrances that are to be excluded from the term "Lien" include,
without limitation: (i) pledges or deposits made to secure obligations
of the Borrower or Restricted Subsidiary under workmen's compensation
laws or similar legislation; (ii) liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's, vendors', repairmen's,
or other like liens incurred in the ordinary course of business; (iii)
governmental (Federal, state or municipal) liens arising out of
contracts for the purchase of products of the Borrower or a Restricted
Subsidiary, and deposits or pledges to obtain the release of any of the
foregoing liens; (iv) liens created by or resulting from any litigation
or legal proceeding
10
that is currently being contested in good faith by appropriate
proceedings; (v) leases made or existing on Principal Property entered
into in the ordinary course of business by the Borrower or a Restricted
Subsidiary; (vi) landlords' liens under leases of Principal Property to
which the Borrower or a Restricted Subsidiary is a party; (vii) zoning
restrictions, easements, licenses or restrictions on the use of
Principal Property or minor irregularities in the title thereto; (viii)
deposits in connection with bids, tenders, contracts (other than for
the payment of money) to which the Borrower or any Restricted
Subsidiary is a party; (ix) deposits to secure public or statutory
obligations of the Borrower or any Restricted Subsidiary; (x) deposits
in connection with obtaining or maintaining self-insurance or to obtain
the benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or similar
matters; (xi) deposits of cash or obligations of the United States of
America to secure surety, appeal or customs bonds to which the Borrower
or any Restricted Subsidiary is a party; and (xii) liens for taxes or
assessments or governmental charges or levies not yet due or
delinquent, or which can thereafter be paid without penalty, or which
are being contested in good faith by appropriate proceedings.
"Loan" shall mean a Competitive Loan or a Standby Loan,
whether made as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as
permitted hereby.
"Long-Term Debt" shall mean, at any time, any publicly-held
senior unsecured debt obligations outstanding at such time with a
maturity more than one year after the date of any determination
hereunder.
"Long-Term Senior Debt" shall have the meaning specified in
the definition of "Public Debt Ratings".
"Margin" shall mean, as to any Eurodollar Competitive Loan,
the margin (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) to be added to or
subtracted from the LIBO Rate in order to determine the interest rate
applicable to such Loan, as specified in the Competitive Bid relating
to such Loan.
"Margin Regulations" shall mean Regulations T, U and X of the
Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Effect" shall mean a materially adverse
effect on the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole (it
being understood that neither the proposed Separation Transactions nor
any event, condition or result reflected in reports or financial
statements filed with the SEC prior to November 13, 2001, shall be
deemed to give rise to a Material Adverse Effect).
"Maturity Date" shall mean December 13, 2002.
11
"Monetized Debt" shall mean Indebtedness of the Borrower or a
non-operating Subsidiary of the Borrower secured by capital stock of
Persons not directly or indirectly controlled by the Borrower
(collectively, the "Available Stock"), so long as the Borrower or such
non-operating Subsidiary has at all times sufficient Available Stock so
that upon maturity or exchange prior to maturity it may satisfy
substantially all of the obligations arising under such Indebtedness
(other than obligations to pay cash coupon amounts on such
Indebtedness) solely by the delivery of Available Stock.
"Moody's" shall mean Moody's Investors Service, Inc. or any
successor rating agency.
"Operational EBITDA" shall mean, for any period operating
income (or operating loss) of the Borrower and its Consolidated
Subsidiaries, excluding the operating income (or operating loss) of
AT&T Latin America and At Home Corporation plus, to the extent deducted
in determining such operating income (or operating loss), the sum of
(a) depreciation expense, (b) amortization expense, (c) restructuring
and other charges and (d) asset impairment charges. If the Borrower
acquires (whether by purchase, merger, consolidation or otherwise) all
or substantially all of the assets or property of any other Person, or
engages in any asset sale permitted by Section 5.05, during any period
in respect of which Operational EBITDA is to be determined hereunder,
such Operational EBITDA will be determined on a pro forma basis as if
such acquisition or such asset sale occurred on the first day of the
relevant period if the Operational EBITDA attributable to such
acquisition or assets sold represents more than 10% of the Borrower's
Operational EBITDA calculated immediately prior to giving effect to
such acquisition or such asset sale.
"Paying Agent" shall have the meaning specified in the recital
of parties to this Agreement.
"Person" or "person" shall mean any natural person,
corporation, business trust, joint venture, association, company,
partnership or government, or any agency or political subdivision
thereof.
"Principal Property" of the Borrower shall mean any land, land
improvements, building and associated factory, laboratory office and
switching equipment (excluding all products marketed by the Borrower or
any Subsidiary) constituting a manufacturing facility, development
facility, warehouse facility, service facility, office facility or
operating facility (including any portion thereof), which facility (a)
is owned by or leased to the Borrower or any Restricted Subsidiary, (b)
is located within the United States and (c) has an acquisition cost
plus capitalized improvements in excess of 0.25% of Consolidated Net
Tangible Assets of the Borrower as of the date of such determination,
other than (i) any such facility, or portion thereof, which has been
financed by obligations issued by or on behalf of a State, a Territory
or a possession of the United States, or any political subdivision of
any of the foregoing, or the District of Columbia, the interest on
which is excludable from gross income of the holders thereof (other
than a "substantial user" of such facility or a "related person" as
those terms are used in Section 103 of the Code) pursuant to the
provisions of Section 103 of the Code (or any similar provisions
12
hereafter enacted) as in effect at the time of issuance of such
obligations, (ii) any such facility which the Borrower's Board of
Directors may by resolution declare is not of material importance to
the Borrower and the Restricted Subsidiaries taken as a whole and (iii)
any such facility, or portion thereof, owned or leased jointly or in
common with one or more persons other than the Borrower and any
Subsidiary of the Borrower and in which the interest of the Borrower
and all Subsidiaries of the Borrower does not exceed 50%.
"Public Debt Ratings" means, as of any date, the lowest rating
(other than any rating based on, or incorporating an expectation of,
the prospective occurrence and consequences of a Separation Transaction
in which AT&T Broadband is separated from AT&T Business) that has been
most recently announced by either S&P or Moody's, as the case may be,
for any class of non-credit enhanced long-term senior unsecured debt
(the "Long-Term Senior Debt") and commercial paper (the "Short-Term
Debt") issued by the Borrower; provided that (i) if the Borrower has
caused the credit facility evidenced by this Agreement to be rated by
S&P and Moody's, then such ratings shall be used in lieu of the ratings
applicable to Long-Term Senior Debt and Short-Term Debt of the Borrower
for all purposes hereunder, (ii) if the event referred to in the
preceding clause (i) has not occurred and AT&T Business has assumed the
obligations of Borrower hereunder then the Long-Term Senior Debt and
Short-Term Debt ratings of AT&T Business will be used in lieu of such
ratings of the Borrower and (iii) if the events referred to in the
preceding clauses (i) and (ii) have not occurred but the Borrower has
delivered to the Paying Agent a guaranty in substantially the form of
Exhibit E hereto (the "AT&T Business Guarantee"), pursuant to which
AT&T Business guarantees the obligations of the Borrower under this
Agreement, the ratings established by S&P and Moody's for Long-Term
Senior Debt of AT&T Business shall be used in lieu of the ratings
applicable to Long-Term Senior Debt of the Borrower for all purposes
hereunder and, if higher, the ratings established by S&P and Moody's
for the Short-Term Debt of AT&T Business shall be used in lieu of the
ratings applicable to Short-Term Debt of the Borrower for all purposes
hereunder, in each case, for such time as the AT&T Business Guarantee
remains in effect. For purposes of the foregoing, with respect to the
Borrower or AT&T Business, as the case may be, (a) if S&P or Moody's
shall have in effect a rating for only one but not both of the
Long-Term Senior Debt or the Short-Term Debt, the Applicable Margin and
the Applicable Facility Fee Percentage shall be the lowest level that
may be determined by reference to the available rating; (b) if only one
of S&P and Moody's shall have in effect Public Debt Ratings, the
Applicable Margin and the Applicable Facility Fee Percentage shall be
determined by reference to the available rating; (c) if neither S&P nor
Moody's shall have in effect Public Debt Ratings for either of the
Long-Term Senior Debt or the Short-Term Debt, the Applicable Margin and
the Applicable Facility Fee Percentage will be set in accordance with
Level 6 under the definition of "Applicable Margin" or "Applicable
Facility Fee Percentage", as the case may be; (d) if any rating
established by S&P or Moody's shall be changed, such change shall be
effective as of the date on which such change is first announced
publicly by the rating agency making such change; and (e) if S&P or
Moody's shall change the basis on which ratings are established, each
reference to the Public Debt Ratings announced by S&P or Moody's, as
the case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
13
"Register" shall have the meaning given such term in Section
8.04(d).
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing at least 51% of the Total Commitment or, if
the Commitments shall have been terminated, or for purposes of
acceleration pursuant to clause (ii) of Article VI, Lenders holding
Loans representing at least 51% of the aggregate principal amount of
the Loans outstanding.
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any
other officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect of
this Agreement.
"Restricted Securities" shall mean any shares of capital stock
or Indebtedness of any Restricted Subsidiary (but shall not include any
Margin Stock).
"Restricted Subsidiary" shall mean (a) any Subsidiary of the
Borrower (i) which has substantially all of its property within the
United States of America, (ii) which owns or is a lessee of any
Principal Property, and (iii) in which the investment of the Borrower
and all other Subsidiaries of the Borrower exceeds 0.25% of
Consolidated Net Tangible Assets of the Borrower as of the date of such
determination; provided, however, that the term "Restricted Subsidiary"
shall not include (A) any Subsidiary of the Borrower (x) primarily
engaged in the business of purchasing, holding, collecting, servicing
or otherwise dealing in and with installment sales contracts, leases,
trust receipts, mortgages, commercial paper or other financing
instruments and any collateral or agreements relating thereto,
including in the business, individually or through partnerships, of
financing (whether through long- or short-term borrowings, pledges,
discounts or otherwise) the sales, leasing or other operations of the
Borrower and the Subsidiaries or any of them, or (y) engaged in the
business of financing the assets and operations of third parties;