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Exhibit 10.8
$30,000,000
CREDIT AGREEMENT
Among
PACIFIC GATEWAY EXCHANGE, INC.
And
BANK OF AMERICA, NT&SA
as Administrative Agent
And
NATIONSBANC XXXXXXXXXX SECURITIES LLC
as Lead Arranger
And
LENDERS
Dated as of December 18, 1998
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$30,000,000
PACIFIC GATEWAY EXCHANGE, INC.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.01. Definitions................................................................................... 1
1.02. Accounting and Other Terms.................................................................... 18
1.03. Currency Equivalents Generally................................................................ 19
ARTICLE II. THE LOAN FACILITY
2.01. Revolver Loan................................................................................. 19
2.02. Making Advances............................................................................... 19
2.03. Evidence of Debt for Borrowed Money........................................................... 21
2.04. Optional Prepayments.......................................................................... 21
2.05. Mandatory Prepayments......................................................................... 21
2.06. Repayment..................................................................................... 22
2.07. Interest...................................................................................... 22
2.08. Default Interest.............................................................................. 23
2.09. Continuation and Conversion Elections......................................................... 23
2.10. Fees.......................................................................................... 24
2.11. Reduction of Commitments...................................................................... 25
2.12. Funding Losses................................................................................ 25
2.13. Computations and Manner of Payments........................................................... 26
2.14. Yield Protection; Changed Circumstances....................................................... 27
2.15. Use of Proceeds............................................................................... 29
2.16. Collateral.................................................................................... 29
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit................................................................. 30
3.02. Letters of Credit Fee......................................................................... 31
3.03. Reimbursement Obligations..................................................................... 31
3.04. Lenders' Obligations.......................................................................... 32
3.05. Administrative Agent's Obligations............................................................ 33
3.06. Phase-In of the Euro.......................................................................... 33
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance and the Issuance of the Initial Letter of Credit.. 34
4.02. Conditions Precedent to All Advances and Letters of Credit.................................... 36
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties................................................................ 37
5.02. Survival of Representations and Warranties.................................................... 44
ii
ARTICLE VI. GENERAL COVENANTS
6.01. Preservation of Existence and Similar Matters................................................. 44
6.02. Business; Compliance with Applicable Law...................................................... 45
6.03. Maintenance of Properties..................................................................... 45
6.04. Accounting Methods and Financial Records...................................................... 45
6.05. Insurance..................................................................................... 45
6.06. Payment of Taxes and Claims................................................................... 45
6.07. Visits and Inspections........................................................................ 45
6.08. Payment of Debt for Borrowed Money............................................................ 46
6.09. Use of Proceeds............................................................................... 46
6.10. Indemnity..................................................................................... 46
6.11. Environmental Law Compliance.................................................................. 47
6.12. Acquisitions, Generally....................................................................... 48
6.13. Subsidiary Designation........................................................................ 48
6.14. Subsidiary Creation or Acquisition............................................................ 48
6.15. Year 2000 Compliance.......................................................................... 48
6.16. Eurocurrency Conversion to the Euro........................................................... 48
ARTICLE VII. INFORMATION COVENANTS
7.01. Quarterly Financial Statements and Information................................................ 49
7.02. Annual Financial Statements and Information................................................... 49
7.03. Compliance Certificates....................................................................... 50
7.04. Copies of Other Reports and Notices........................................................... 50
7.05. Notice of Litigation, Default and Other Matters............................................... 51
7.06. ERISA Reporting Requirements.................................................................. 51
ARTICLE VIII. NEGATIVE COVENANTS
8.01. Financial Covenants........................................................................... 53
8.02. Debt for Borrowed Money....................................................................... 53
8.03. Liens......................................................................................... 54
8.04. Investments................................................................................... 54
8.05. Liquidation, Disposition or Acquisition of Assets, Merger, New Subsidiaries................... 55
8.06. Guaranties; Contingent Liabilities............................................................ 56
8.07. Restricted Payments........................................................................... 56
8.08. Affiliate Transactions........................................................................ 56
8.09. Compliance with ERISA......................................................................... 56
8.10. Capital Stock................................................................................. 57
8.11. Sale and Leaseback............................................................................ 57
8.12. Sale or Discount of Receivables............................................................... 57
8.13. Limitation on Restrictive Agreements.......................................................... 57
8.14. Amendment of Material Agreements.............................................................. 57
8.15. Name Changes.................................................................................. 58
8.16. Unrestricted Subsidiaries..................................................................... 58
iii
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default............................................................................. 58
9.02. Remedies upon Default......................................................................... 61
9.03. Cumulative Rights............................................................................. 62
9.04. Waivers....................................................................................... 62
9.05. Performance by Administrative Agent or any Lender............................................. 62
9.06. Expenditures.................................................................................. 62
9.07. Control....................................................................................... 62
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. Authorization and Action...................................................................... 63
10.02. Administrative Agent's Reliance, Etc.......................................................... 63
10.03. Bank of America, NT&SA and Affiliates......................................................... 64
10.04. Lender Credit Decision........................................................................ 64
10.05. Indemnification by Lenders.................................................................... 64
10.06. Successor Administrative Agent................................................................ 64
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers........................................................................ 65
11.02. Notices....................................................................................... 65
11.03. Parties in Interest........................................................................... 67
11.04. Assignments and Participations................................................................ 68
11.05. Sharing of Payments........................................................................... 69
11.06. Right of Set-off.............................................................................. 69
11.07. Costs, Expenses, and Taxes.................................................................... 69
11.08. Rate Provision................................................................................ 70
11.09. Severability.................................................................................. 71
11.10. Exceptions to Covenants....................................................................... 71
11.11. Counterparts.................................................................................. 71
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL........................................................... 71
11.13. ENTIRE AGREEMENT.............................................................................. 72
iv
Table of Schedules and Exhibits
Schedules
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Schedule 1.01 - Eurocurrencies
Schedule 1.02 - Unrestricted Subsidiaries as of the Closing Date
Schedule 5.01(a) - Jurisdictions of Qualification, Ownership and Capital
Structure - the Borrower and its Subsidiaries
Schedule 5.01(f) - Non-Compliance with FCC or any applicable PUC
Schedule 5.01(h) - Existing Litigation of the Borrower and its Subsidiaries
Schedule 8.02 - Existing Debt and Liabilities of the Borrower and the
Restricted Subsidiaries
Schedule 8.03 - Existing Liens of the Borrower and the Restricted
Subsidiaries
Schedule 8.04 - Existing Investments of the Borrower and the Restricted
Subsidiaries
Schedule 8.08 - Permitted Affiliate Non-Market Transactions
Schedule 8.16 - Permitted Transactions among the Borrower and the
Restricted Subsidiaries and the Unrestricted
Subsidiaries
Exhibits
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Exhibit A - Form of Revolver Note
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Borrowing Notice
Exhibit D - Form of Conversion/Continuation Notice
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Unlimited Guaranty
v
$30,000,000
PACIFIC GATEWAY EXCHANGE, INC.
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of December 18, 1998, among PACIFIC
GATEWAY EXCHANGE, INC., a Delaware corporation (the "Borrower"), the Lenders (as
defined below), NATIONSBANK XXXXXXXXXX SECURITIES LLC, as lead arranger and BANK
OF AMERICA, NT&SA, as a Lender and Administrative Agent.
BACKGROUND.
WHEREAS, the Borrower, the Administrative Agent and the Lenders hereby
enter into a Credit Agreement which provides for one 364-day revolving loan
facility in the amount of $30,000,000 (which such loan facility shall also
include multicurrency letter of credit availability of not more than
$5,000,000).
AGREEMENT.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Administrative Agent" means Bank of America, NT&SA in its capacity as
Administrative Agent hereunder, or any successor Administrative Agent appointed
pursuant to Section 10.06 hereof.
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof or any payment by Administrative Agent of a draft drawn
under any Letter of Credit which is not reimbursed by the Borrower as provided
in Section 3.03(d), which shall include Revolver Advances and Refinancing
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Advances.
"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled By or is Under Common Control with
another Person.
"Agreement" means this Credit Agreement, as hereafter amended, modified,
increased, extended, restated or supplemented from time to time.
1
"Annualized Operating Cash Flow" means the product of (a) Operating Cash
Flow for the most recently completed two fiscal quarters, times (b) two.
"Applicable Law" means in respect of any Person, all provisions of Laws of
Tribunals applicable to such Person, and all orders and decrees of all courts
and arbitrators in proceedings or actions to which the Person in question is a
party.
"Applicable Margin" means, with respect to LIBOR Advances, 1.125% per
annum, and with respect to Base Rate Advances, 0% per annum.
"Applicable Specified Percentage" means with respect to any Lender, in the
case of the Revolver Loan, such Lender's Revolver Specified Percentage.
"Application" means any stand-by letter of credit application delivered to
Administrative Agent for or in connection with any stand-by Letter of Credit
pursuant to Article III hereof, in Administrative Agent's standard form for
stand-by multicurrency letters of credit.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee in accordance with the terms and conditions of
Section 11.04 hereof, and accepted by Administrative Agent, in the form of
Exhibit E hereto.
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"Auditor" means Coopers & Xxxxxxx L.L.P. or other independent certified
public accountants selected by the Borrower and acceptable to Administrative
Agent.
"Authorized Officer" means, with respect to the Borrower and its
Subsidiaries respectively, any of the Chief Executive Officer, the President,
the Chief Financial Officer or any Vice President of the Borrower.
"Bank Affiliate" means the holding company of any Lender, or any wholly
owned direct or indirect subsidiary of such holding company or of such Lender.
"Base Advance" means an Advance under the Revolver Loan, bearing interest
at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a) the
Highest Lawful Rate, and (b) the sum of the Applicable Margin plus the higher of
(i) a fluctuating rate per annum as shall be in effect from time to time
announced or published by Bank of America, NT&SA as its "Reference Rate", and
which may not necessarily be the lowest interest rate charged by Bank of
America, NT&SA, and (ii) the Federal Funds Rate in effect at such time plus
.50%.
"Bermuda Corp." means Pacific Gateway Exchange (Bermuda) Limited, a Bermuda
corporation and wholly owned Subsidiary of the Borrower.
"Board of Directors" means the Board of Directors of the Borrower or any
committee thereof duly authorized to act on behalf of such Board.
2
"Borrowing" means a borrowing of the same Type made on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Business Day" means a day on which banks are open for the transaction of
business as required by this Agreement in San Francisco, California, and, with
respect to any LIBOR Advance, a domestic business day in London, England and a
day on which commercial banks are open for international business in London,
England (including dealings in United States dollar deposits), and as otherwise
relevant to the determination to be made or the action to be taken.
"Capital Expenditures" means capital expenditures, as defined in accordance
with GAAP.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation, each class of partnership interests
(including without limitation, general, limited and preference units) in any
Person that is a partnership, and each membership interest in any Person that is
a limited liability company.
"Closing Date" means the date hereof.
"Change of Control" means the occurrence of any one or more of the
following events: (i) any event which constitutes a change in Control of the
Borrower or (ii) any event which results in the Borrower's failure to own and
control 100% of the Capital Stock of the Restricted Subsidiaries and Bermuda
Corp., except as otherwise permitted hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and any
reference to any provision of the Code shall include all successor provisions
thereto.
"Collateral" has the meaning ascribed thereto in Section 2.16 hereof.
"Commitment" means the Revolver Commitment.
"Commitment Fee" means the Revolver Commitment Fee.
"Communications Act" means, collectively, the Communications Act of 1934,
as amended by the Telecommunications Act of 1996, and as further amended, and
the rules and regulations promulgated thereunder, as from time to time in
effect.
"Compliance Certificate" means a certificate of an Authorized Officer in
the form of Exhibit B hereto, (a) certifying that such individual has no
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knowledge that a Default or Event of Default has occurred and is continuing, or
if a Default or Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action being taken or proposed to be taken
3
with respect thereto and (b) setting forth detailed calculations with respect to
the covenants described in Section 8.01 hereof.
"Consequential Loss" with respect to (a) the Borrower's payment of all or
any portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) subject to Administrative Agents' prior consent, a LIBOR Advance made
on a date other than the date on which the Advance is to be made according to
Section 2.02(a) or Section 2.09 hereof to the extent such Advance is made on
such other date at the request of the Borrower, or (c) any of the circumstances
specified in Sections 2.04, 2.05 and 2.06 hereof on which a Consequential Loss
may be incurred, means any loss, cost or expense incurred by any Lender as a
result of the timing of the payment or Advance or in liquidating, redepositing,
redeploying or reinvesting the principal amount so paid or affected by the
timing of the Advance or the circumstances described in Sections 2.04, 2.05 or
2.06 hereof, which amount shall be the sum of (i) the interest that, but for the
payment or timing of Advance, such Lender would have earned in respect of that
principal amount, reduced, if such Lender is able to redeposit, redeploy, or
reinvest the principal amount, by the interest earned by such Lender as a result
of redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim, which upon
request by the Borrower shall be certified in a certificate.
"Contingent Liability" means, as to any Person, any obligation or Guaranty,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or obligation of any other Person in any manner,
whether directly or indirectly, including without limitation any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase Property or services for the purpose of assuring the owner of such
Debt of its payment, or (c) to maintain the solvency, working capital, equity,
cash flow, fixed charge or other coverage ratio, or any other financial
condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation, but
excluding endorsement of checks, drafts and other instruments in the ordinary
course of business, provided that this definition of "Contingent Liability"
shall not include Guaranties by the Borrower or any Subsidiary of the Borrower
of any obligations of the Borrower or any wholly owned Restricted Subsidiary of
the Borrower that has executed an Unlimited Guaranty.
"Continue," "Continuation" and "Continued" each refer to the continuation
pursuant to Section 2.09 hereof of a LIBOR Advance from one Interest Period to
the next Interest Period.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event any Person which beneficially owns (a)
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15% or more (in number of votes) of the securities having ordinary voting power
for the election of directors of a corporation shall be conclusively presumed to
control
4
such corporation and (b) 10% or more of the interest in capital or profits of a
partnership shall be conclusively presumed to control such partnership.
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
"Debt" means all obligations, contingent or otherwise, which in accordance
with GAAP are required to be classified on the balance sheet as liabilities, and
in any event including (without duplication) (a) Capital Leases, (b) Contingent
Liabilities that are required to be disclosed and quantified in notes to
consolidated financial statements in accordance with GAAP, (c) liabilities
secured by any Lien on any Property, regardless of whether such secured
liability is with or without recourse, and (d) installment payment non-compete
agreements.
"Debt for Borrowed Money" means, with respect to the Borrower, the
Restricted Subsidiaries and Bermuda Corp., at any date, without duplication, all
Debt of the Borrower, the Restricted Subsidiaries and Bermuda Corp. that
constitutes (a) all obligations of the Borrower, such Restricted Subsidiaries
and Bermuda Corp. for borrowed money, letters of credit (or applications for
letters of credit) or other similar instruments, (b) all obligations of the
Borrower, the Restricted Subsidiaries and Bermuda Corp. evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of the
Borrower, the Restricted Subsidiaries and Bermuda Corp. to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (d) the principal component of obligations
under Capital Leases of the Borrower, the Restricted Subsidiaries and Bermuda
Corp., (e) installment payment non-compete agreements for the Borrower, each
Restricted Subsidiary and Bermuda Corp., and (f) all Contingent Liabilities
relating to obligations of another Person (other than a wholly owned Restricted
Subsidiary of the Borrower that has executed an Unlimited Guaranty, with respect
to Debt of another wholly owned Restricted Subsidiary of the Borrower that has
executed an Unlimited Guaranty) of the type described in (a) through (e) above.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium, or similar Laws, or principles of equity affecting the enforcement
of creditors' rights generally.
"Default" means any event specified in Section 9.01 hereof, whether or not
any requirement in connection with such event for the giving of notice, lapse of
time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment of
any distribution or dividend (other than a stock dividend) on, or the making of
any pro rata distribution, loan, advance, or investment to or in any holder of,
any partnership interest or shares of Capital Stock or other equity interest of
such Person (or the establishment of a sinking fund or otherwise setting aside
of funds for any such purpose), or (b) any purchase, redemption, or other
acquisition or retirement for value of any
5
shares of partnership interest or Capital Stock or other equity interest of such
Person (or the establishment of a sinking fund or otherwise setting aside of
funds for any such purpose).
"Dollars" and the symbol "$" mean the lawful currency of the United States.
"EMU" shall have the meaning ascribed thereto in Section 6.17 hereto.
------------
"Environmental Claim" means any written notice by any Tribunal alleging
liability for damage to the environment, or by any Person alleging liability for
personal injury (including sickness, disease or death), resulting from or based
upon (a) the presence or release (including sudden or non-sudden, accidental or
non-accidental, leaks or spills) of any Hazardous Material at, in or from
property, whether or not owned by the Borrower or any of its Subsidiaries, or
(b) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S)9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. (S)6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42 U.S.C.
(S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all analogous future federal, or present or future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of the Borrower or any Obligor or any
Unrestricted Subsidiary, or is under common control with Borrower or any Obligor
or any Unrestricted Subsidiary, within the meaning of Section 414(c) of the
Code, and the regulations and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the meaning of Section
4043 of ERISA, unless the 30-day notice requirement with respect thereto has
been waived by the PBGC, (b) the issuance by the administrator of any Plan of a
notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA), (c) the withdrawal by the Borrower, any Subsidiary of
the Borrower or an ERISA Affiliate from a Multiple Employer Plan during a Plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA, (d) the failure by the Borrower any Subsidiary of the Borrower, or any
ERISA Affiliate to make a payment to a Plan required under Section 302 of ERISA,
(e) the adoption of an amendment to a Plan requiring the provision of security
to such Plan, pursuant to Section 307 of ERISA, or (f) the institution by the
PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition that constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, a Plan.
6
"Euro" shall have the meaning ascribed thereto in Section 6.17 hereof.
------------
"Eurocurrency" means any currency listed on Schedule 1.01 and any other
-------------
lawful currencies acceptable to each Lender evidenced by its prior written
consent (a) for which Borrower has delivered to Administrative Agent an
Application for a Letter of Credit and (b) which is freely convertible into
Dollars.
"Event of Default" means any of the events specified in Section 9.01 of
this Agreement, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"FCC" means the Federal Communications Commission, or any governmental
agency succeeding to the functions thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of San Francisco, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board and other changes in accounting methods permitted by generally accepted
accounting principles.
"Guarantors" means each Restricted Subsidiary of the Borrower existing on
the Closing Date or formed or acquired by the Borrower after the date hereof,
and any direct or indirect Restricted Subsidiary of the Borrower from time to
time thereafter.
"Guaranty" means a guaranty executed by any Person of the obligations of
another Person, or any agreement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes liable upon, the obligation of any other Person, or agrees
to maintain the net worth or working capital or other financial condition of any
other Person, or otherwise assures any creditor or such other Person against
loss, including, without limitation, any comfort letter, or take-or-pay contract
and shall include without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Hazardous Materials" means all materials subject to any Environmental Law,
including without limitation materials listed in 49 C.F.R. (S) 172.101,
Hazardous Substances, explosive or
7
radioactive materials, hazardous or toxic wastes or substances, petroleum or
petroleum distillates, asbestos, or material containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean Water
Act, 33 U.S.C. (S) 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. (S) 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. (S) 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. (S) 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, any Lender is then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower.
"Income Tax Expense" means the aggregate Taxes paid or accrued by the
Borrower, the Restricted Subsidiaries and Bermuda Corp. for the relevant period
of determination.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, on any date of determination for the
Borrower, the Restricted Subsidiaries and Bermuda Corp., the ratio of (a)
Operating Cash Flow for the most recently completed fiscal quarter to (b) the
aggregate amount of cash Interest Expense actually paid during the most recently
completed fiscal quarter.
"Interest Expense" means, for the Borrower, the Restricted Subsidiaries and
Bermuda Corp. on a consolidated basis for any period of determination, the gross
interest expense for any period on Total Debt, determined in accordance with
GAAP, minus the sum of interest income for such period.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date the Advance is made or continued as a LIBOR Advance and
ending one, two, three or six months thereafter (as the Borrower shall select),
provided, however, that:
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(a) the Borrower may not select any Interest Period that ends after
any principal repayment date unless, after giving effect to such selection,
the aggregate principal amount of LIBOR Advances having Interest Periods
that end on or prior to such principal repayment date, shall be at least
equal to the principal amount of Advances due and payable on and prior to
such date;
(b) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided,
--------
however, that if such extension would cause the
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8
last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower and
any Lender.
"Investment" means any acquisition of all or substantially all of the
assets of any Person, or any direct or indirect purchase or other acquisition
of, or a beneficial interest in, any Capital Stock or other securities of any
other Person, or any direct or indirect loan, advance, or capital contribution
to or investment in any other Person, including without limitation the
incurrence or sufferance of Debt or accounts receivable of any other Person that
are not current assets or do not arise from sales to that other Person in the
ordinary course of business.
"Law" means any constitution, statute, law, ordinance, regulation, rule,
order, writ, injunction, or decree of any Tribunal.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each transferee which hereafter becomes a party to this Agreement
pursuant to Section 11.04 hereof or pursuant to an amendment to this Agreement,
so long as each is owed any portion of the Obligation or is obligated to make
any Advance hereunder.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of each Lender, branch or affiliate
identified on each Lender's signature page hereto, and (b) subsequently, such
other office of each Lender, branch or affiliate as each Lender may designate to
the Borrower and Administrative Agent as the office from which the Advances of
each Lender will be made and maintained and for the account of which all
payments of principal and interest on the Advances and the Commitment Fee will
thereafter be made. Lenders may have more than one Lending Office for the
purpose of making Base Advances and LIBOR Advances.
"Letter of Credit Commitment" means, on any date of determination, an
amount equal to the lesser of (a) $5,000,000 and (b) the Revolver Commitment
minus the sum of (i) all outstanding Revolver Advances under the Revolver Loan,
(ii) the amount available to be drawn of all outstanding Letters of Credit (or
if such Letters of Credit are denominated in a currency other than Dollars, the
Dollar equivalent of such currency) plus (iii) all reimbursement obligations
under Article III hereof (or if such reimbursement obligations are denominated
in a currency other than Dollars, the Dollar equivalent of such currency).
9
"Letters of Credit" means the irrevocable standby letters of credit issued
by Administrative Agent under and pursuant to Article III hereof, as each may be
amended, modified, substituted, increased, replaced, renewed or extended from
time to time.
"LIBOR Advance" means an Advance under the Revolver Loan, bearing interest
at the LIBOR Rate.
"LIBOR Lending Office" means, with respect to each Lender, the office
designated as its "LIBOR Lending Office" on each Lender's signature page hereto,
or such other office of Lender or any of its affiliates hereafter designated by
notice to the Borrower and Administrative Agent.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefore, a rate per annum equal to the lesser of (a) the Highest Lawful Rate
and (b) the sum of (i) the Applicable Margin, plus (ii) the rate per annum
(rounded upwards, if necessary, to the nearest one-one hundredth (1/100th) of
one percent (1%)) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period. If for any reason such rate is not available, the term
"LIBOR Rate" shall mean, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest one-one
hundredth (1/100th) of one percent (1%)) appearing on Reuters Screen LIBO page
as the London interbank offered rate for deposits in United States dollars at
approximately 11:00 a.m. (London time) two 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.
"License" means, as to the Borrower, or any Subsidiary of the Borrower, any
license, permit, consent, certificate of need, authorization, certification,
accreditation, franchise, approval, or grant of rights by, or any filing or
registration with, any Tribunal or third Person (including without limitation,
the FCC or any applicable PUC) necessary for such Person to own, build,
maintain, or operate its business or Property.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind, including without limitation any agreement to give or not to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement or other similar form of public notice under the
Laws of any jurisdiction (except for the filing of a financing statement or
notice in connection with an (a) operating lease or (b) the true consignment of
goods to the Borrower, any Restricted Subsidiary or Bermuda Corp. as consignee).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted by or before any Tribunal or arbitrator, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
10
"Loan Papers" means this Agreement, the Notes, the Unlimited Guaranties,
the pledge agreement pledging 66% of the shares of Bermuda Corp. to the
Administrative Agent, financing statements, any Interest Rate Protection
Agreement and related documents entered into by the Borrower with any Lender or
any Bank Affiliate, all Letters of Credit, all Applications and all other
agreements between the Borrower or any Restricted Subsidiary and the
Administrative Agent related to any Letter of Credit, Assignment and
Acceptances, post-closing letters, all security agreements, pledges, mortgages,
deeds of trust, assignments, leasehold mortgages, leasehold deeds of trust,
collateral assignments and other agreements and documentation relating to the
Liens securing the Obligations, and all other documents, instruments,
agreements, or certificates executed or delivered from time to time by any
Person in connection with this Agreement or as security for the Obligations
hereunder, granting collateral or otherwise, as each such agreement may be
amended, modified, substituted, replaced or extended from time to time.
"Majority Lenders" means any combination of Lenders having at least 51.00%
of the aggregate amount of outstanding Advances hereunder, provided, however,
that if no Advances are outstanding, such term means any combination of one or
more Lenders having Total Specified Percentages equal to at least 51.00%.
"Material Adverse Change" means any circumstance or event that is or could
reasonably be expected to (a) be material and adverse to the financial
condition, business, operations, prospects, or Properties of the Borrower, the
Restricted Subsidiaries and Bermuda Corp. on a consolidated basis, (b)
materially and adversely affect the validity or enforceability of any Loan Paper
or (c) cause a Default or Event of Default.
"Maturity Date" means the earlier of December 16,1999, or such earlier date
on which the total amount of outstanding Obligations are due and payable
(including, without limitation, whether by acceleration, scheduled reduction of
the Commitment to zero, mandatory or voluntary commitment reduction of the
Commitment to zero, installment payments or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, a Lender is permitted to charge on the Obligations.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower, or
any ERISA Affiliate is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and at least
one Person other than the Borrower, any Subsidiary of the Borrower and any ERISA
Affiliate, or (b) was so maintained and in respect of which the Borrower, any
Subsidiary of the Borrower, or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
11
"National Currency" shall have the meaning ascribed thereto in Section 6.17
------------
hereof.
"Net Proceeds" means the gross cash proceeds received by the Borrower, any
Restricted Subsidiary or Bermuda Corp. in connection with or as a result of any
asset sale not in the ordinary course of business, minus (so long as each of the
following are estimated in good faith by the management of the Borrower and
certified to the Lenders in reasonable detail by an Authorized Officer) (a)
actual taxes estimated in good faith by the Board of Directors incurred as a
result of such sale (after giving effect to all tax benefits available to the
Borrower, such Restricted Subsidiary and Bermuda Corp.), and (b) reasonable and
customary transaction costs payable by the Borrower, any Restricted Subsidiary
and Bermuda Corp. that are related to such sale and payable to a Person other
than an Affiliate of the Borrower and its Subsidiaries.
"Notes" means each of the Revolver Notes, and "Note" means any Revolver
Note, as applicable in the context used, and in each case, with any extension,
renewal or amendment thereof, or substitution therefor.
"Obligations" means all present and future obligations, indebtedness and
liabilities, and all renewals and extensions of all or any part thereof, of the
Borrower and each other Obligor to Lenders and Administrative Agent arising
from, by virtue of, or pursuant to this Agreement, any of the other Loan Papers
and any and all renewals and extensions thereof or any part thereof, or future
amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by the Administrative Agent for the
preparation of this Agreement and consummation of this credit facility,
execution of waivers, amendments and consents, and in connection with the
enforcement or the collection of all or any part thereof, and reasonable
attorneys' fees incurred by the Lenders in connection with the enforcement or
the collection of all or any part of the Obligations during the continuance of
an Event of Default, in each case whether such obligations, indebtedness and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several. Without limiting the generality of the foregoing, "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other Person (other than Administrative Agent or Lenders) to Administrative
Agent or Lenders under any Loan Paper, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower, any other Obligor
or any other Person (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).
"Obligor" means (a) the Borrower, (b) each Restricted Subsidiary, (c)
Bermuda Corp., (d) each other Person liable for performance of any of the
Obligations and (e) each other Person the Property of which secures the
performance of any of the Obligations.
"Operating Cash Flow" means the sum of
(a) for the Borrower and the Restricted Subsidiaries, for any period,
the consolidated net income (loss) for such period taken as a single
accounting period, plus the sum of the following amounts for such period to
the extent included in the determination of such
12
consolidated net income or loss, without duplication: (i) depreciation
expense, (ii) amortization expense and other non-cash losses, (iii)
Interest Expense, (iv) Income Tax Expense and (v) extraordinary losses,
minus the sum of (A) extraordinary gains and (B) non-cash income, plus
(b) for Bermuda Corp. for any period, 66% of the result determined by
the following formula: the sum of (i) the consolidated net income (loss)
for such period taken as a single accounting period, plus (ii) the sum of
the following amounts for such period to the extent included in the
determination of such consolidated net income or loss, without duplication:
(A) depreciation expense, (B) amortization expense and other non-cash
losses, (C) Interest Expense, (D) Income Tax Expense and (E) extraordinary
losses, minus the sum of (I) extraordinary gains and (II) non-cash income.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Acquisition" means acquisitions made by the Borrower or any
Restricted Subsidiary in telecommunications or internet businesses or related
businesses, so long as in each case (a) there exists no Default or Event of
Default both before and after giving effect to any such acquisition, (b) such
acquired entity becomes a Restricted Subsidiary and executes an Unlimited
Guaranty of the Obligations or such acquired assets are acquired by the Borrower
or a Restricted Subsidiary , and (c) the Borrower provides the Administrative
Agent and each Lender with information demonstrating pro forma compliance with
the terms of this Agreement through the Maturity Date, after giving effect to
such Permitted Acquisition, including, without limitation, each provision of
Section 8.01 hereof.
"Permitted Asset Sales" means (a) assets sales in the ordinary course of
business and (b) assets sales of equipment that is worn out, obsolete, damaged
or otherwise unsuitable for use in the business.
"Permitted Liens" means, as applied to any Person:
(a) any Lien in favor of the Lenders to secure the Obligations hereunder;
(b) (i) Liens on real estate for real estate Taxes not yet delinquent, (ii)
Liens created by lease agreements, statute or common law to secure the payments
of rental amounts and other sums not yet due thereunder, (iii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of the
leased premises, and (iv) Liens for Taxes, assessments, governmental charges,
levies or claims that are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure, restraint,
sale or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and materialmen
and other similar Liens incurred in the ordinary course of business for sums not
yet due or being contested in good faith, if such reserve or appropriate
provision, if any, as shall be required by GAAP shall have been made therefor;
13
(d) Liens incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere with the ordinary conduct of the
business of such Person;
(f) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully insured and
the insurer shall not have denied coverage, or (iii) such judgments or awards
shall have been bonded to the satisfaction of the Majority Lenders; and
(g) Any Liens existing on the Closing Date which are described on Schedule
--------
8.03 hereto and not otherwise described elsewhere in the definition of Permitted
----
Liens.
"Permitted Refinancing Indebtedness" means Debt of the applicable Obligor
to the extent all of the proceeds thereof are used to refinance Debt of such
Obligor (plus any premium thereon reasonably acceptable to the Administrative
Agent), provided that after giving effect to the incurrence of such Debt, the
Borrower is in pro forma compliance with the terms of this Agreement, and
provided further that (i) the terms of such new Debt are no more restrictive
than the Loan, (ii) the maturity of such new Debt is no shorter than the Debt
being refinanced, (iii) the only Person obligated on such refinanced Debt is the
original Person obligated on such Debt, (iv) the priority of any such new Debt
shall remain unchanged (if such Debt to be refinanced is subordinated, the
subordination provisions remain unchanged in the new refinanced Debt), and (v)
the parties obligated on such Debt remain the same.
"Person" means an individual, partnership, joint venture, corporation,
limited liability company, trust, Tribunal, unincorporated organization, and
government, or any department, agency, or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Prohibited Transaction" has the meaning specified in Section 4975 of the
Code or Section 406 of Title I of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned or hereafter acquired in fee simple or leased by
the Borrower, the Restricted Subsidiaries and Bermuda Corp.
14
"PUC" means any state regulatory agency or body that exercises jurisdiction
over the rates or services or the ownership, construction or operation of any
network facility or long distance telecommunications systems or over Persons who
own, construct or operate a network facility or long distance telecommunications
systems, in each case by reason of the nature or type of the business subject to
regulation and not pursuant to laws and regulations of general applicability to
Persons conducting business in such state.
"Quarterly Date" means the last Business Day of each March, June, September
and December during the term of this Agreement.
"Refinancing Advance" means any Advance which is used to pay the principal
amount (or any portion thereof) of an Advance at the end of its Interest Period
and which, after giving effect to such application, does not result in an
increase in the aggregate amount of outstanding Advances.
"Release Date" means the date on which the Notes have been paid, all other
Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"Restricted Payments" means, for the Borrower, the Restricted Subsidiaries
and Bermuda Corp., (a) any direct or indirect Distribution, dividend or other
payment on account of any equity interest in, or shares of Capital Stock or
other securities of the Borrower, its Restricted Subsidiaries and Bermuda Corp.
(or the establishment of any sinking fund or otherwise the setting aside of any
funds with respect thereto); (b) any management, consulting or other similar
fees, or any interest thereon, payable by the Borrower, any of the Restricted
Subsidiaries or Bermuda Corp. to any Unrestricted Subsidiary and/or any other
Affiliate of the Borrower (or the establishment of any sinking fund or otherwise
the setting aside of any funds with respect thereto), but specifically excluding
any consulting fees payable by the Borrower, any Restricted Subsidiary or
Bermuda Corp. to a Person that is not an Affiliate of the Borrower, (c) loans or
advances to employees and/or shareholders of the Borrower and the Subsidiaries
of the Borrower, except advances to employees of the Borrower, its Restricted
Subsidiaries and Bermuda Corp. for moving and travel expenses in the ordinary
course of business; (d) payments of principal and/or interest, or the setting
aside of funds with respect thereto, of any Total Debt except the Obligations;
and (e) payments of any amounts, fees, advances, loans, investments or otherwise
to any Unrestricted Subsidiary.
"Restricted Subsidiary" means all those Subsidiaries of the Borrower that
are not Unrestricted Subsidiaries, provided that, notwithstanding the foregoing
(a) all Subsidiaries designated by the Borrower as Restricted Subsidiaries on
the Closing Date shall remain Restricted Subsidiaries until the Obligations have
been repaid in full and the Commitments terminated and (b)no Person may be
included as a Restricted Subsidiary hereunder that is not party to a currently
effective Unlimited Guaranty guaranteeing the Obligations.
"Revolver Commitment" means, with respect to the Revolver Loan, $30,000,000
as reduced from time to time pursuant to Section 2.11 hereof.
"Revolver Advance" means any advance made under the Revolver Loan.
15
"Revolver Commitment Fee" means the fee described in Section 2.10(a)
hereof.
"Revolver Loan" means the loan made by a Lender pursuant to Section 2.01 of
this Agreement.
"Revolver Note" means each Note of the Borrower evidencing Revolver
Advances under the Revolver Loan hereunder, substantially in the form of Exhibit
-------
A hereto, together in each case, with any extension, renewal or amendment
-
thereof, or substitution therefor.
"Revolver Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof designated as its
Revolver Specified Percentage, or as adjusted or specified (i) in any Assignment
and Acceptance or (ii) in any amendment to this Agreement.
"Rights" means rights, remedies, powers, and privileges.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, other than a Multiple Employer Plan of the Borrower.
"Solvent" means, with respect to any Person, that on such date (a) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including without limitation Contingent Liabilities of such Person,
(b) the present fair salable value of the assets of such Person on a going
concern basis is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute an unreasonably small capital.
"Special Counsel" means the law firm of Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.,
Dallas, Texas, or such other individual or firm acting as special counsel to
Administrative Agent, as designated by Administrative Agent from time to time.
"Subordinated Indebtedness" means Debt of the Borrower that is unsecured
and subordinated to the Obligations, such Debt in each case (a) to be pursuant
to documentation containing terms and conditions no more onerous than this
Agreement and the Loan Papers, (b) to have a maturity not less than one year
after the Maturity Date, and (c) to be subordinated on terms and conditions
acceptable to the Administrative Agent and the Majority Lenders in their sole
discretion.
"Subsidiary" of any Person means any corporation, limited liability
company, partnership, joint venture, trust or estate of which (or in which) 50%
or more of:
(a) the outstanding Capital Stock having voting power to elect a
majority 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 or might have voting power upon the occurrence of any
contingency),
16
(b) the interest in the capital or profits of such partnership or
joint venture, or
(c) the beneficial interest of such trust or estate, is at the time
directly or indirectly owned by such Person, by such Person and one or more of
its Subsidiaries or by one or more of such Person's Subsidiaries.
"Taxes" means all taxes, assessments, imposts, fees, or other charges at
any time imposed by any Laws or Tribunal.
"Total Debt" means all Debt for Borrowed Money for the Borrower, the
Restricted Subsidiaries and Bermuda Corp. which would be shown on a consolidated
balance sheet in accordance with GAAP, including, without limitation, (a)
Capital Lease obligations, (b) Debt of any other Person secured by a Lien on the
property of the Borrower, any Restricted Subsidiary or Bermuda Corp. in an
amount equal to the lesser of (i) such Debt of such Person and (ii) the value of
such pledged property, (c) Contingent Liabilities, (d) Withdrawal Liability and
(e) overdue interest on any Debt for Borrowed Money (but not accrued interest
that is not overdue).
"Total Leverage Ratio" means, on any date of determination, the ratio of
(a) Total Debt on such date to (b) Annualized Operating Cash Flow, provided that
for purposes of this calculation, Operating Cash Flow shall be calculated as if
all assets (including Capital Stock of the Subsidiaries of the Borrower)
acquired on any date during the period of determination were acquired on the
first day in such period of determination, and all assets (including Capital
Stock of the Subsidiaries of the Borrower) sold on any date during the period of
determination were sold on the first day in such period of determination.
"Total Specified Percentage" means, as to any Lender on any date of
determination, the percentage that such Lender's outstanding Advances bears to
the aggregate outstanding amount of Advances made by all Lenders hereunder,
provided that, if there are no outstanding Advances hereunder, "Total Specified
Percentage" shall mean for such Lender the percentage that its Revolver
Specified Percentage of the Revolver Commitment bears to the aggregate
Commitments of all Lenders on such date.
"Tribunal" means any state, commonwealth, federal, foreign, territorial, or
other court or government body, subdivision, agency, department, commission,
board, bureau, or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at the
Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of
California on the Closing Date.
17
"Unlimited Guaranty" means the Guaranty, executed in substantially similar
form by each Restricted Subsidiary of the Borrower, guarantying payment and
performance of the Obligations, substantially in the form of Exhibit F attached
---------
hereto, as such agreement may be amended, modified, renewed or extended from
time to time, and each subsequent unlimited Guaranty in the form of Exhibit F
---------
hereto executed by any newly acquired or created Restricted Subsidiary, as each
such agreement may be amended, modified, renewed or extended from time to time.
"Unrestricted Subsidiary" means (a) all international Subsidiaries of the
Borrower that are not less than 50% owned and which are designated in writing to
the Administrative Agent and each Lender by the Borrower as Unrestricted
Subsidiaries, provided that no Restricted Subsidiary existing on the Closing
Date may be designated as an Unrestricted Subsidiary and (b) International
Exchange Communications, Inc., a Delaware corporation and a wholly owned
domestic Subsidiary of the Borrower. Unrestricted Subsidiaries as of the
Closing Date are listed on Schedule 1.02 hereto. Except as expressly excluded
-------------
throughout this Agreement and the Loan Papers, Bermuda Corp. shall be an
Unrestricted Subsidiary.
"Unused Facility Amount" means the Commitments minus the sum of (a) all
outstanding Revolver Advances, plus (b) all issued and outstanding Letters of
Credit denominated in Dollars, plus (c) all issued and outstanding Letters of
Credit denominated in a Eurocurrency, as converted to Dollars pursuant to
Section 1.03 hereof, plus (d) all reimbursement obligations with respect to any
------------
draws under any Letters of Credit, whether in Dollars or as converted from a
Eurocurrency to Dollars pursuant to Section 1.03 hereof.
------------
"Voting Stock" of a Person means all classes of Capital Stock or other
interests of such Person then outstanding and normally entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
"Year 2000 Compliant" means, with respect to a Person, that all computer
hardware and software that are material to the business and operations of such
Person will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000, including functions
with respect to any leap year.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Borrower and its Restricted
Subsidiaries, unless otherwise expressly stated herein. References herein to
one gender shall be deemed to include all other genders. Except where the
context otherwise requires, (a) definitions imparting the singular shall include
the plural and vice versa and (b) all references to time are deemed to refer to
Pacific coast time.
1.03. Currency Equivalents Generally. For purposes of this Agreement,
the equivalent of any Eurocurrency in Dollars shall be determined by using the
quoted spot rate at which Administrative Agent's principal office in London
offers to exchange such Eurocurrency for Dollars
18
in London at 11:00 a.m. (London time) on the date on which such equivalent is to
be determined. The equivalent in Dollars of each Eurocurrency Letter of Credit
may be recalculated hereunder on each date that it shall be necessary to
determine each Lender's Unused Facility Amount of the Commitment, or any or all
Advance or Advances outstanding on such date.
ARTICLE II. THE LOAN FACILITY
2.01. Revolver Loan. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make Revolver Advances to
the Borrower on a Business Day during the period from the Closing Date to the
Maturity Date, in an aggregate principal amount not to exceed at any time
outstanding such Lender's Revolver Specified Percentage of the difference
between the Revolver Commitment and the sum of the undrawn face amount of all
outstanding Letters of Credit, plus reimbursement obligations under Article III
hereof (or if any Letters of Credit or reimbursement obligations are denominated
in a currency other than Dollars, the Dollar equivalent of such currency).
Subject to the terms and conditions of this Agreement, the Borrower may borrow,
repay and reborrow the Revolver Advances; provided, however, that at no time
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shall the sum of (i) all outstanding Revolver Advances, plus (ii) the undrawn
face amount of all outstanding Letters of Credit (or if any Letter of Credit is
denominated in a currency other than Dollars, the Dollar equivalent of such
currency), plus (iii) reimbursement obligations under Article III hereof (or if
any reimbursement obligation is denominated in a currency other than Dollars,
the Dollar equivalent of such currency)exceed the Revolver Commitment.
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written notice
of the Borrower, received by Administrative Agent not later than (i) 10:00
a.m. three Business Days prior to the date of the proposed Borrowing, in
the case of Advances which are LIBOR Advances and (ii) 10:00 a.m. on the
date of such Borrowing, in the case of Advances which are Base Advances.
Each such notice of a Borrowing (a "Borrowing Notice") shall be by telecopy
or telephone, promptly confirmed by letter, in substantially the form of
Exhibit C hereto specifying therein:
---------
(i) the date of such proposed Borrowing, which shall be a
Business Day;
(ii) the Type of Advances of which the Borrowing is to be
comprised;
(iii) the amount of such proposed Borrowing which (A) shall not
exceed the unused portion of the Revolver Commitment less outstanding
Letters of Credit and reimbursement obligations (or if any Letter of Credit
or reimbursement obligation shall be in a currency other than Dollars, the
Dollar equivalent of such currency) and (B) shall (I) in the case of a
Borrowing of Base Advances, be in an amount of not less than $2,000,000 or
an integral multiple of $1,000,000 in excess thereof (or any lesser amount
if such amount is the remaining undrawn portion under the Revolver
Commitment, respectively), and (II) in the
19
case of a Borrowing of LIBOR Advances, be in an amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof; and
(iv) if the Borrowing is to be comprised of LIBOR Advances, the
duration of the initial Interest Period applicable to such Advances.
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any Borrowing or Refinancing Advance, as applicable,
comprised of LIBOR Advances, such Interest Period shall be three months.
Administrative Agent shall promptly notify Lenders of each such notice. Each
Lender shall, before 1:00 p.m. on the date of each Advance under the Revolver
Loan hereunder (other than a Refinancing Advance), make available to
Administrative Agent, at its office at 0000 Xxxxxxx Xxxx., 0xx Xxxxx, Xxxxxxx,
XX 00000-0000, attn: Xxxxx Steezes, tel. (000) 000 0000, such Lender's Revolver
Specified Percentage of the aggregate Advances under the Revolver Loan, to be
made on that day in immediately available funds.
(b) Unless any applicable condition specified in Article IV has not been
satisfied, Administrative Agent will make the funds promptly available to the
Borrower (other than with respect to a Refinancing Advance) by either (i) wiring
such amounts pursuant to any wiring instructions, or (ii) depositing such amount
in the account of the Borrower at the Administrative Agent, in each case as
specified by the Borrower to the Administrative Agent in writing.
(c) After giving effect to any Borrowing, (i) there shall not be more than
three different Interest Periods in effect and (ii) the aggregate principal
amount of outstanding Advances under the Revolver Loan, plus the sum of the
outstanding amount available to be drawn of the Letters of Credit, and
reimbursement obligations under Article III (or if any Letter of Credit or
reimbursement obligation shall be denominated in a currency other than Dollars,
the Dollar equivalent of such currency) shall not exceed the Revolver
Commitment.
(d) No Interest Period applicable to any Advance shall extend beyond the
Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior to the
date of any Advance that it will not make available its Applicable Specified
Percentage of any Advance, Administrative Agent may assume that such Lender has
made the appropriate amount available in accordance with Section 2.02(a) hereof,
and Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If and to the extent any Lender shall
not have made such amount available to Administrative Agent, such Lender and the
Borrower severally agree to repay to Administrative Agent immediately on demand
such corresponding amount together with interest thereon, from the date such
amount is made available to the Borrower until the date such amount is repaid to
Administrative Agent, at (i) in the case of the Borrower, the Base Rate, and
(ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Applicable Specified
Percentage of any Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Applicable Specified Percentage of any
Advance. In no event, however, shall any Lender be responsible for the failure
of any other Lender to make available any portion of any Advance.
20
(g) The Borrower shall indemnify each Lender against any Consequential
Loss incurred by each Lender as a result of (i) any failure to fulfill, on or
before the date specified for an Advance, the conditions to the Advance set
forth herein (including a Refinancing Advance) or (ii) the Borrower's requesting
that an Advance (including a Refinancing Advance) not be made on the date
specified in the Borrowing Notice.
2.03. Evidence of Debt for Borrowed Money. The Advances made by each
Lender under the Revolver Loan shall be evidenced by a Revolver Note in the
amount of such Lender's Revolver Specified Percentage of the Revolver Commitment
in effect on the Closing Date. Administrative Agent's and each Lender's records
shall be presumptive evidence as to amounts owed Administrative Agent and such
Lender under the Notes and this Agreement.
2.04. Optional Prepayments.
(a) The Borrower may, upon at least two Business Days prior written notice
to Administrative Agent stating the proposed date and aggregate principal amount
of the prepayment, prepay the outstanding principal amount of any Advances in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid without premium or penalty other than any
Consequential Loss; provided, however, that in the case of a prepayment of a
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Base Advance, the notice of prepayment may be given by telephone by 10:00 a.m.
on the date of prepayment. Each partial prepayment shall, in the case of Base
Advances under the Loan, be in an aggregate principal amount of not less than
$100,000 or a larger integral multiple of $50,000 in excess thereof and, in the
case of LIBOR Advances under the Loan, be in an aggregate principal amount of
not less than $500,000 or a larger integral multiple of $100,000 in excess
thereof. If any notice of prepayment is given, the principal amount stated
therein, together with accrued interest on the amount prepaid and the amount, if
any, due under Section 2.12 and Section 2.14 hereof, shall be due and payable on
the date specified in such notice unless the Borrower revokes its notice,
provided that, if the Borrower revokes its notice of prepayment prior to such
date specified, the Borrower shall reimburse the Administrative Agent for the
account of all Lenders for all Consequential Losses suffered by each Lender as a
result of the Borrower's failure to prepay. A certificate of each Lender
claiming compensation under this Section 2.04(a), setting forth in reasonable
detail the calculation of the additional amount or amounts to be paid to it
hereunder shall be presumptive evidence of the validity of such claim.
(b) All prepayments made pursuant to this Section 2.04 shall be first
applied to Base Advances then to LIBOR Advances, all without premium or penalty,
except the Borrower must pay together with any such prepayments, any
Consequential Losses identified at such time.
2.05. Mandatory Prepayments.
(a) Asset Sales. To the extent that the Borrower, any of the Restricted
Subsidiaries or Bermuda Corp. consummates any sale of any asset or any of its
Properties, other than Permitted Asset Sales, then the Borrower shall
immediately use 100% of the Net Proceeds of any such transaction to repay the
Obligations under the Loan.
21
(b) Public or Private Issuance of Debt or Equity. To the extent that the
Borrower, any of the Restricted Subsidiaries or Bermuda Corp. consummates any
public or private issuance of Debt or equity (this provision in and of itself
not constituting permission to do so), then the Borrower shall immediately use
the Net Proceeds in excess to repay the Obligations under the Revolver Loan.
(c) Mandatory Prepayments, Generally. All prepayments made pursuant to
this Section 2.05 shall be first applied to Base Advances then to LIBOR
Advances, all without premium or penalty, except the Borrower must pay together
with any such prepayments, any Consequential Losses.
2.06. Repayment.
(a) LIBOR Advances. The principal amount of each LIBOR Advance is due and
payable on the last day of the applicable Interest Period, which principal
payment may be made by means of a Refinancing Advance in accordance with the
terms of Section 2.09 hereof (and subject to the other provisions of this
Agreement).
(b) Commitment Reduction. On the date of a reduction of the Commitment
pursuant to Section 2.11 hereof, the aggregate amount of outstanding Revolver
Advances plus the amount available to be drawn of the Letters of Credit, and
reimbursement obligations under Article III (or if any Letter of Credit or
reimbursement obligation shall be denominated in a currency other than Dollars,
the Dollar equivalent of such currency) in excess of the Revolver Commitment as
reduced shall be immediately due and payable (which such principal repayments
may not be made by means of Refinancing Advances).
(c) Maturity Date. All outstanding Advances under the Loan and all other
Obligations shall be due and payable in full on the Maturity Date.
(d) Repayments, Generally. All outstanding Advances and other Obligations
shall be due and payable in full on the Maturity Date. Any repayments made
pursuant to this Section shall be without premium or penalty, except the
Borrower must pay together with any such prepayments, any Consequential Losses.
Advances shall be applied to Base Advances first, and then to LIBOR Advances.
2.07. Interest. Subject to Section 2.08 and Section 11.08 hereof, the
Borrower shall pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal shall be paid in full, at either
the Base Rate or the LIBOR Rate, as set forth in subsection (i) or (ii) below,
as selected by the Borrower in accordance with Section 2.02 hereof and as
follows:
(i) Base Advances. Base Advances shall bear interest at a rate per
annum equal to the Base Rate as in effect from time to time. If the amount
of interest payable in respect of any interest computation period is
reduced to the Highest Lawful Rate and the amount of interest payable in
respect of any subsequent interest computation period would be less than
the Maximum Amount, then the amount of interest payable in respect of such
subsequent
22
interest computation period shall be automatically increased to the
Maximum Amount; provided that at no time shall the aggregate amount by
--------
which interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to this
sentence.
(ii) LIBOR Advances. LIBOR Advances shall bear interest at the rate
per annum equal to the LIBOR Rate applicable to such Advance.
(iii) Payment Dates. Accrued and unpaid interest on Base Advances
shall be paid quarterly in arrears on each Quarterly Date and on the
Maturity Date. Accrued and unpaid interest in respect of each LIBOR
Advance shall be paid on the last day of the appropriate Interest Period,
on the Maturity Date and on the date of any prepayment or repayment of such
Advance; provided, however, that if any Interest Period for a LIBOR Advance
-------- -------
exceeds three months, interest shall also be paid on the date which falls
three months after the beginning of such Interest Period.
2.08. Default Interest. During the continuation of any Event of
Default, the Borrower shall pay, on demand, interest (after as well as before
judgment to the extent permitted by Law) on the principal amount of all Advances
outstanding and on all other Obligations due and unpaid hereunder at a per annum
rate equal to the lesser of the (a) the Highest Lawful Rate and (b) the Base
Rate plus 2%. LIBOR Advances shall not be available for selection by the
Borrower during the continuance of an Event of Default.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative
Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion
of outstanding Advances which are Base Advances (in an aggregate amount not
less than $500,000 or an integral multiple of $100,000 in excess thereof)
into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period
therefor, all or any portion of outstanding Advances which are LIBOR
Advances comprised in the same Borrowing (in an aggregate amount not less
than $100,000 or an integral multiple of $50,000 in excess thereof) into
Base Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any Advances which are LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
-------- -------
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$500,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Advances at the end of each respective Interest Period.
23
(b) The Borrower shall deliver a notice of conversion or continuation (a
"Conversion or Continuation Notice"), in substantially the form of Exhibit D
---------
hereto, to Administrative Agent not later than (i) 10:00 a.m. three Business
Days prior to the proposed date of conversion or continuation, if the Advances
(or any portion of either thereof) are to be converted into or continued as
LIBOR Advances; and (ii) 10:00 a.m. on the Business Day of the proposed
conversion, if the Advances (or any portion thereof) are to be converted into
Base Advances.
Each such Conversion or Continuation Notice shall be by telecopy or
telephone, promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or
continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, (i) the Borrower shall have failed to select a new Interest Period to
be applicable to such LIBOR Advances, the Interest Period shall be shall be
three months, or (ii) if an Event of Default shall then have occurred and be
continuing, the Borrower shall be deemed to have elected to convert such LIBOR
Advances into Base Advances effective as of the expiration date of such current
Interest Period.
(d) Notwithstanding any other provision contained in this Agreement, after
giving effect to any conversion or continuation of any Advances, there shall not
be outstanding Advances with more than seven different Interest Periods.
2.10. Fees.
(a) Revolver Commitment Fee. Subject to Section 11.08 hereof, the Borrower
shall pay to Administrative Agent for the account of Lenders pro rata in
accordance with each Lender's Revolver Specified Percentage, a commitment fee
(the "Revolver Commitment Fee") equal to 0.375% per annum on the average daily
amount of the Unused Facility Amount, payable in arrears on each Quarterly Date
commencing with the first Quarterly Date after the Closing Date, and continuing
until the Maturity Date.
(b) Other Fees. Borrower shall pay to Administrative Agent and the Lenders
such other fees as set forth in any commitment letter or any fee letter
addressed to the Administrative Agent or any Lender.
24
2.11. Reduction of Commitments.
(a) Mandatory Termination of the Revolver Commitment. The Revolver
Commitment shall automatically be reduced to zero and terminate on the Maturity
Date.
(b) Mandatory Reduction of Commitment Due to Asset Sales. The Commitment
shall be reduced immediately and automatically in an amount equal to any amount
required by Section 2.05(a) hereof to prepay the Loan as a result of any asset
sales of the Borrower, any of the Restricted Subsidiaries or Bermuda Corp. (this
provision in and of itself not constituting permission to effectuate any asset
sales), provided that, so long as there exists no Default or Event of Default
both before and after giving effect to such asset sales and both before and
after any permitted reinvestment, the Commitment shall not be automatically and
immediately reduced if the Borrower in good faith intends to reinvest, and such
proceeds are ultimately reinvested within a 12 month period after any such asset
sale, in telecommunications assets or Permitted Acquisitions.
(c) Mandatory Reduction of Commitment Due to Issuances of Public or Private
Debt or Equity. At the time of any issuance of public or private Debt or equity
by the Borrower, any of the Restricted Subsidiaries or Bermuda Corp. (other than
Debt permitted to be incurred in accordance with the provisions of Section 8.02
hereof) (this provision in and of itself not constituting permission to
effectuate any such transaction),the Commitment shall be reduced immediately and
automatically in an amount equal to 100% of any amount required by Section
2.05(b) hereof to prepay outstanding Advances under the Loan (regardless of
whether there are actually any outstanding Advances) as a result of any
issuances of public or private Debt or equity.
(d) Change of Control. If any Change of Control shall have occurred, the
Revolver Commitment shall immediately and automatically be reduced to zero.
(e) Voluntary Commitment Reductions. The Borrower may from time to time,
upon notice to Administrative Agent not later than 1:00 p.m., three Business
Days in advance, terminate in whole or reduce in part the Commitment, as
designated by the Borrower; provided, however, that the Borrower shall pay the
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accrued interest and the applicable accrued Commitment Fee on the amount of such
reduction and all amounts due, and any partial reduction shall be in an
aggregate amount which is an integral multiple of $5,000,000.
(g) Commitment Reduction and Repayments, Generally. To the extent
outstanding Revolver Advances exceed the Revolver Commitment after any reduction
thereof, the Borrower shall repay, on the date of such reduction, any such
excess amount and all accrued interest thereon, the applicable Revolver
Commitment Fee on the amount of such reduction and all amounts due. Once reduced
or terminated, the Revolver Commitment may not be increased or reinstated. No
reduction of the Commitment, either voluntary or mandatory shall relieve or
alter the mandatory reduction and termination of the Revolver Commitment
pursuant to Section 2.11 hereof.
2.12. Funding Losses. The Borrower may prepay the outstanding principal
balance of any Advance, in full at any time or in part from time to time in
accordance with the terms of Section 2.04 hereof, provided, that as a condition
--------
precedent to the Borrower's right to make, and any Lender's
25
obligation to accept, any such prepayment, each such prepayment shall be in the
amount of 100% of the principal amount to be prepaid, plus accrued unpaid
interest thereon to the date of prepayment, plus any other sums which have
become due to Administrative Agent and Lenders under the Loan Papers on or
before the prepayment date but have not been paid, plus (subject to Section
11.08 hereof) any Consequential Loss.
The Borrower agrees that each Lender is not obligated to actually reinvest
the amount prepaid in any specific obligation as a condition to receiving any
Consequential Loss, or otherwise.
2.13. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other Loan
Papers not later than 1:00 p.m. on the day when due in same day funds (by wire
transfer or otherwise) to Administrative Agent, for the account of Lenders
unless otherwise specifically provided herein, at Administrative Agent's office
at 0000 Xxxxxxx Xxxx., 0xx Xxxxx, Xxxxxxx, XX 00000-0000, attn: Xxxxx Steezes,
tel. (000) 000 0000, for further credit to the account of Pacific Gateway
Exchange, Inc. No later than the end of each day when each payment hereunder is
made, the Borrower shall notify Loan Operations at (000) 000-0000 or such other
Person as Administrative Agent may from time to time specify.
(b) Unless Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due hereunder that the
Borrower will not make payment in full, Administrative Agent may assume that
such payment is so made on such date and may, in reliance upon such assumption,
make distributions to Lenders. If and to the extent the Borrower shall not have
made such payment in full, each Lender shall repay to Administrative Agent
forthwith on demand the applicable amount distributed, together with interest
thereon at the Federal Funds Rate, from the date of distribution until the date
of repayment. The Borrower hereby authorizes each Lender, if and to the extent
payment is not made when due hereunder, to charge the amount so due against any
account of the Borrower with such Lender.
(c) Subject to Section 11.08 hereof, interest on LIBOR Advances under the
Loan Papers shall be calculated on the basis of actual days elapsed but computed
as if each year consisted of 360 days. Subject to Section 11.08 hereof,
interest on Base Advances, the Commitment Fee and other amounts due under the
Loan Papers shall be calculated on the basis of actual days elapsed but computed
as if each year consisted of 365 or 366 days, as applicable. Such computations
shall be made including the first day but excluding the last day occurring in
the period for which such interest, payment or Commitment Fee is payable. Each
determination by Administrative Agent or a Lender of an interest rate, fee or
commission hereunder shall be presumptive evidence of the validity of such
claim. All payments under the Loan Papers shall be made in United States
dollars, and without setoff, counterclaim, or other defense.
(d) Whenever any payment to be made hereunder or under any other Loan
Papers shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in the computation of interest or fees, if applicable;
provided, however, if such extension would cause payment of interest on or
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26
principal of LIBOR Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Reference to any particular index or reference rate for determining any
applicable interest rate under this Agreement is for purposes of calculating the
interest due and is not intended as and shall not be construed as requiring any
Lender to actually obtain funds for any Advance at any particular index or
reference rate.
2.14. Yield Protection; Changed Circumstances.
(a) If any Lender determines that either (i) the adoption of any
Applicable Law, rule, regulation or guideline regarding capital adequacy and
applicable to commercial banks or financial institutions generally or any change
therein, or any change, after the date hereof, in the interpretation or
administration thereof by any Tribunal, central bank or comparable agency
charged with the interpretation or administration thereof, or (ii) compliance by
any Lender (or Lending Office of any Lender) with any request or directive
applicable to commercial banks or financial institutions generally regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency has the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount reasonably deemed by such Lender to be
material, then from time to time, within fifteen days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount or amounts
as will adequately compensate such Lender for such reduction. Each Lender will
notify the Borrower of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section 2.14(a)
as promptly as practicable after such Lender obtains actual knowledge of such
event; provided, no Lender shall be liable for its failure or the failure of any
--------
other Lender to provide such notification. A certificate of such Lender
claiming compensation under this Section 2.14(a), setting forth in reasonable
detail the calculation of the additional amount or amounts to be paid to it
hereunder shall be presumptive evidence of the validity of such claim. If such
Lender demands compensation under this Section 2.14(a), the Borrower may at any
time, on at least five Business Days' prior notice to such Lender (i) repay in
full the then outstanding principal amount of LIBOR Advances, of such Lender,
together with accrued interest thereon, or (ii) convert the LIBOR Advances to
Base Advances in accordance with the provisions of this Agreement; provided,
--------
however, that the Borrower shall be liable for the Consequential Loss arising
-------
pursuant to those actions.
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes, or its obligation to make a LIBOR Advance, or imposes on any Lender
any other condition affecting a Letter of Credit; and the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining its
Letter of Credit, LIBOR Advances, or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or under the Notes, the Letters
of Credit or
27
reimbursement obligations by an amount deemed by such Lender, to be material,
then, within five days after demand by such Lender, the Borrower shall
----
pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction. Each Lender will (i) notify the
Borrower of any event occurring after the date of this Agreement that entitles
such Lender to compensation pursuant to this Section 2.14(b), as promptly as
practicable after such Lender obtains actual knowledge of the event; provided,
--------
no Lender shall be liable for its failure or the failure of any other Lender to
provide such notification and (ii) use good faith and reasonable efforts to
designate a different Lending Office for LIBOR Advances, of such Lender if the
designation will avoid the need for, or reduce the amount of, the compensation
and will not, in the sole opinion of such Lender, be disadvantageous to such
Lender. A certificate of such Lender claiming compensation under this Section
2.14(b), setting forth in reasonable detail the computation of the additional
amount or amounts to be paid to it hereunder shall be presumptive evidence of
the validity of such claim. If such Lender demands compensation under this
Section 2.14(b), the Borrower may at any time, on at least five Business Days'
prior notice to such Lender (i) repay in full the then outstanding principal
amount of LIBOR Advances, of such Lender, together with accrued interest
thereon, or (ii) convert the LIBOR Advances to Base Advances in accordance with
the provisions of this Agreement; provided, however, that the Borrower shall be
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liable for the Consequential Loss arising pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
issue or maintain Letters of Credit, make LIBOR Advances or to continue to fund
or maintain LIBOR Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower, (i) each LIBOR Advance will
automatically, upon such demand, convert into a Base Advance, (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Agent and the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist, and (iii) the obligation of such Lender to make or
maintain Letters of Credit shall be suspended until such Lender notifies
Administrative Agent and the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or Event
of Default, (i) each LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of each Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended.
(e) If any Lender notifies Administrative Agent that the LIBOR Rate for
any Interest Period for any LIBOR Advances will not adequately reflect the cost
to such Lender of making, funding or maintaining LIBOR Advances for such
Interest Period, Administrative Agent shall promptly so notify the Borrower,
whereupon (i) each such LIBOR Advance will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Agent that such
Lender has determined that the
28
circumstances causing such suspension no longer exist and Administrative Agent
notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.14 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.14.
(g) The obligations of the Borrower under this Section 2.14 shall survive
any termination of this Agreement, provided that, in no event shall the Borrower
be required to make a payment under this Section 2.14 with respect to any event
of which the Lender making such claim had knowledge more than 6 months prior to
demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.14 shall be
presumptively correct. Any certificate delivered to the Borrower by a Lender
pursuant to this Section 2.14 shall include in reasonable detail the basis for
such Lender's demand for additional compensation and a certification that the
claim for compensation is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender.
(i) Notwithstanding any other provision of this Agreement, no Lender not
organized under the Laws of the United States or any State (or which has a Bank
Affiliate not organized under the Laws of the United States or any State) shall
be entitled to compensation pursuant to this Section 2.14 with respect to any
amount which would otherwise be due under this Section 2.14 but which is the
result of an act of a Tribunal of the country in which such Lender or Bank
Affiliate is organized.
2.15. Use of Proceeds. The proceeds of the Revolver Advances shall be
available (and the Borrower shall use such proceeds) solely (a) for Permitted
Acquisitions consummated by the Borrower and the Restricted Subsidiaries, (b)
for Capital Expenditures made by the Borrower and the Restricted Subsidiaries
and permitted under the terms of this Agreement, (c) for working capital of the
Borrower and the Restricted Subsidiaries and (d) for other lawful corporate
purposes of the Borrower and the Restricted Subsidiaries.
2.16. Collateral. Payment of the Obligations will be secured by (a) a
first perfected security interest in 66% of the Capital Stock of Bermuda Corp.
and (b) Unlimited Guaranties of the Obligations by each Guarantor (collectively,
together with all other Properties or assets of the Borrower, its Subsidiaries
and other Persons securing the Obligations from time to time, the "Collateral").
The Borrower agrees that it will, and will cause its Subsidiaries to execute and
deliver, or cause to be executed and delivered, such documents as the
Administrative Agent may from time to time reasonably request to create and
perfect a first Lien for the benefit of the Administrative Agent and the Lenders
in the Collateral.
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ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit. The Borrower shall give the
Administrative Agent not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Agent
shall promptly notify each Lender of such request. Letters of Credit may be
issued in Dollars, Eurocurrencies, or, subject to the provisions hereof, other
currencies which are determined by Administrative Agent to be available. If the
Letter of Credit requested is to be denominated in a currency other than Dollars
or Eurocurrencies, Administrative Agent shall notify Borrower within twenty-four
hours of receipt of the completed and duly executed Applications of the
availability of such currency and the expiration date available for Letters of
Credit denominated in such currency. Upon receipt of the Borrower's properly
completed and duly executed Applications, and subject to the terms of such
Applications and to the terms of this Agreement, the Administrative Agent agrees
to issue Letters of Credit on behalf of the Borrower in an aggregate face amount
not in excess of the lesser of (a) Letter of Credit Commitment and (b) the
remainder of the Revolver Commitment minus the sum of all outstanding Revolver
Advances plus the aggregate amount available to be drawn of all outstanding
Letters of Credit (or if any Letter of Credit is denominated in a currency other
than Dollars, the Dollar equivalent of such currency). No Letter of Credit
denominated in Dollars or Eurocurrencies shall have a maturity extending beyond
the earliest of (i) the Maturity Date, or (ii) one year from the date of its
issuance, or (iii) such earlier date as may be required to enable the Borrower
to satisfy its repayment obligations under Section 2.06 hereof. No Letter of
Credit denominated in a currency other than Dollars or Eurocurrencies shall have
a maturity extending beyond the earliest of (i) the Maturity Date, (ii) one year
from the date of its issuance, or (iii) such earlier date as reasonably
determined by Administrative Agent. Subject to such maturity limitations and so
long as no Default or Event of Default has occurred and is continuing or would
result from the renewal of a Letter of Credit, the Letters of Credit may be
renewed by the Administrative Agent in its discretion. The Lenders shall
participate ratably in any liability under the Letters of Credit and in any
unpaid reimbursement obligations of the Borrower with respect to any Letter of
Credit in their Revolver Specified Percentages (or if such Letter of Credit is
denominated in a currency other than Dollars, the Dollar equivalent of their
Revolver Specified Percentage of such currency). The amount of the Letters of
Credit issued and outstanding and the unpaid reimbursement obligations of the
Borrower for such Letters of Credit (or if any Letter of Credit is denominated
in a currency other than Dollars, the Dollar equivalent of such currency) shall
reduce the amount of Revolver Commitment available, so that at no time shall the
sum of (i) all outstanding Revolver Advances in the aggregate, plus (ii) the
aggregate face amount of all outstanding Letters of Credit (or is any Letter of
Credit is denominated in a currency other than Dollars, the Dollar equivalent of
such currency), plus (iii) (without duplication) all outstanding reimbursement
obligations related to Letters of Credit (or if such reimbursement obligations
are denominated in a currency other than Dollars, the Dollar equivalent of such
currency), exceed the Revolver Commitment, and at no time shall the sum of all
Revolver Advances by any Lender made plus its ratable share of amounts available
to be drawn under the Letters of Credit (or if any Letter of Credit is
denominated in a currency other than Dollars, the Dollar equivalent of such
currency) and the unpaid reimbursement obligations (or if any reimbursement
obligation is denominated in a currency other than Dollars, the Dollar
equivalent of such currency) of the Borrower in respect of such Letters of
Credit exceed its Revolver Specified Percentage of the Revolver Commitment.
30
3.02. Letters of Credit Fee. In consideration for the issuance of each
Letter of Credit, the Borrower shall pay to (a) the Administrative Agent for its
sole account, an application and processing fee in the amount of the higher of
(i) $350.00 and (ii) the product of 1/8th of 1% multiplied by the face amount of
such Letter of Credit on each Letter of Credit (or if the Letter of Credit is
denominated in a currency other than Dollars, the Dollar equivalent of such
currency calculated by using the quoted spot rate to exchange Dollars for such
currency in effect on the last day of each Quarterly Date as the rate in effect
during the calendar quarter ending on such Quarterly Date), due and payable on
the date of issuance of each Letter of Credit, and (b) the Administrative Agent
for the account of the Administrative Agent and the Lenders in accordance with
their Revolver Specified Percentages, a per annum fee for each Letter of Credit
equal to the higher of (i) $350.00 and (ii) the product of the Applicable Margin
for LIBOR Advances multiplied by the face amount of each such Letter of Credit
(or if such Letter of Credit is denominated in a currency other than Dollars,
the Dollar equivalent of such currency calculated by using the quoted spot rate
to exchange Dollars for such currency in effect on the last day of each
Quarterly Date as the rate in effect during the calendar quarter ending on such
Quarterly Date). Each fee for each Letter of Credit under subsection (b) above
shall be due and payable to the Administrative Agent quarterly as it accrues, on
each Quarterly Date during the term of the Letter of Credit and on the
expiration or renewal and/or extension of each such Letter of Credit, beginning
with the first such Quarterly Date after the issuance of each Letter of Credit
and ending on the expiration date of each such Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Borrower hereby agrees to reimburse Administrative Agent
immediately upon demand by Administrative Agent, and in immediately available
funds, for any payment or disbursement made by Administrative Agent under any
Letter of Credit. Administrative Agent shall notify Borrower within one
Business Day of its receipt of a draw request with respect to a Letter of Credit
issued in a currency other than Dollars. Borrower, within one Business Day of
receipt of such notice from Administrative Agent, shall notify Administrative
Agent whether Borrower intends to make funds available to Administrative Agent
in such currency. Payment shall be made by the Borrower with interest on the
amount so paid or disbursed by Administrative Agent from and including the date
payment is made under any Letter of Credit to and including the date of payment,
at the lesser of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate
in effect from time to time plus 2% per annum; provided, however, that if the
-------- -------
Borrower would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.02 to borrow Revolver Advances in amounts at least equal to their
reimbursement obligation for a drawing under any Letter of Credit, a Base
Advance by each Lender, in an amount equal to such Lender's Revolver Specified
Percentage, shall automatically be deemed made on the date of any such payment
or disbursement made by Administrative Agent in the amount of such obligation
and subject to the terms of this Agreement.
(b) The Borrower hereby also agrees to pay to Administrative Agent
immediately upon demand by Administrative Agent and in immediately available
funds, as security for their reimbursement obligations in respect of the Letters
of Credit under Section 3.03(a) hereof and any other amounts payable hereunder
and under the Notes, an amount equal to the aggregate Dollar amount available to
be drawn under Letters of Credit then outstanding (or if any Letter of Credit is
denominated in a currency other than Dollars, the Dollar equivalent of such
currency), irrespective
31
of whether the Letters of Credit have been drawn upon, upon an Event of Default.
Any such payments shall be deposited in a separate account designated "Pacific
Gateway Exchange Special Account" or such other designation as Administrative
Agent shall elect. All such amounts deposited with Administrative Agent shall be
and shall remain funds of the Borrower on deposit with Administrative Agent and
may be invested by Administrative Agent as Administrative Agent shall determine.
Such amounts may not be used by Administrative Agent to pay the drawings under
the Letters of Credit; however, such amounts may be used by Administrative Agent
as reimbursement for Letter of Credit drawings which Administrative Agent has
paid. During the existence of an Event of Default but after the expiration of
any Letter of Credit that was not drawn upon, the Borrower may direct the
Administrative Agent to use any cash collateral for any such expired Letter of
Credit, if any, to reduce the amount of the Obligations. Any amounts remaining
in the Pacific Gateway Exchange Special Account, after the date of the
expiration of all Letters of Credit and after all Obligations have been paid in
full, shall be repaid to the Borrower promptly after such expiration and such
payment in full.
(c) The obligations of the Borrower under this Section 3.03 will continue
until all Letters of Credit have expired and all reimbursement obligations with
respect thereto have been paid in full by the Borrower and until all other
Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative Agent upon
demand for all amounts paid under the Letters of Credit as set forth in Section
3.03(a) hereof; provided, however, if the Borrower for any reason fails to
reimburse Administrative Agent in full upon demand, whether by borrowing
Revolver Advances to pay such reimbursement obligations or otherwise, the
Lenders shall reimburse Administrative Agent in accordance with each Lender's
Revolver Specified Percentage for amounts due and unpaid from the Borrower as
set forth in Section 3.04 hereof; provided, however, that no such reimbursement
made by the Lenders shall discharge the Borrower's obligations to reimburse
Administrative Agent.
(e) The Borrower shall indemnify and hold Administrative Agent or any
Lender, its officers, directors, representatives and employees harmless from
loss for any claim, demand or liability which may be asserted against
Administrative Agent or such indemnified party in connection with actions taken
under the Letters of Credit or in connection therewith (including losses
resulting from the negligence (but not the gross negligence) of Administrative
Agent or such indemnified party), and shall pay Administrative Agent for
reasonable fees of attorneys (who may be employees of Administrative Agent) and
legal costs paid or incurred by Administrative Agent in connection with any
matter related to the Letters of Credit, except for losses and liabilities
incurred as a direct result of the gross negligence or wilful misconduct of
Administrative Agent or such indemnified party. If the Borrower for any reason
fails to indemnify or pay Administrative Agent or such indemnified party as set
forth herein in full, the Lenders shall indemnify and pay Administrative Agent
upon demand, in accordance with each Lender's Revolver Specified Percentage of
such amounts due and unpaid from the Borrower. The provisions of this Section
3.03(e) shall survive the termination of this Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and
irrevocably to reimburse Administrative Agent on demand for such Lender's
Revolver Specified Percentage of each
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draw paid by Administrative Agent under any Letter of Credit (or if such Letter
of Credit is denominated in a currency other than Dollars, the Dollar equivalent
of such currency). All amounts payable by any Lender under this subsection shall
include interest thereon at the Federal Funds Rate, from the date of the
applicable draw to the date of reimbursement by such Lender. No Lender shall be
liable for the performance or nonperformance of the obligations of any other
Lender under this Section. The obligations of the Lenders under this Section
shall continue after the Maturity Date and shall survive termination of any Loan
Papers.
3.05. Administrative Agent's Obligations.
(a) Administrative Agent makes no representation or warranty, and assumes
no responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. Administrative Agent assumes no responsibility for
the financial condition of the Borrower and its Subsidiaries or for the
performance of any obligation of the Borrower. Administrative Agent may use its
discretion with respect to exercising or refraining from exercising any rights,
or taking or refraining from taking any action which may be vested in it or
which it may be entitled to take or assert with respect to any Letter of Credit
or any Application.
(b) Administrative Agent shall be under no liability to any Lender, with
respect to anything the Administrative Agent may do or refrain from doing in the
exercise of its judgment, the sole liability and responsibility of
Administrative Agent being to handle each Lender's share on as favorable a basis
as Administrative Agent handles its own share and to promptly remit to each
Lender its share of any sums received by Administrative Agent under any
Application. Administrative Agent shall have no duties or responsibilities
except those expressly set forth herein and those duties and liabilities shall
be subject to the limitations and qualifications set forth herein.
(c) Neither Administrative Agent nor any of its directors, officers, or
employees shall be liable for any action taken or omitted (whether or not such
action taken or omitted is expressly set forth herein) under or in connection
herewith or any other instrument or document in connection herewith, except for
gross negligence or willful misconduct, and no Lender or Borrower waives its
right to institute legal action against Administrative Agent for wrongful
payment of any Letter of Credit due to Administrative Agent's gross negligence
or willful misconduct. Administrative Agent shall incur no liability to any
Lender, the Borrower or any Affiliate of the Borrower or Lender in acting upon
any notice, document, order, consent, certificate, warrant or other instrument
reasonably believed by Administrative Agent to be genuine or authentic and to be
signed by the proper party.
3.06. Phase-In of the Euro. If at any time (i) a National Currency
ceases to be lawful currency of the state issuing the same and is replaced by a
European single or common currency or (ii) any National Currency and the Euro
are at the same time both recognized by the central bank or comparable
governmental authority of the state issuing such currency as the lawful currency
of such state, then Administrative Agent's obligation to issue any Letter of
Credit in a currency other than Dollars shall immediately terminate until such
time Borrower has taken all actions and executed all documents or other Loan
Papers reasonably requested by Administrative Agent in order to insure that
Administrative Agent and each Lender may issue such Letters of Credit in
accordance with
33
Applicable Law, and such Letters of Credit will become Obligations of the
Borrower under this Agreement.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance and the Issuance of the
Initial Letter of Credit. The obligation of each Lender to make the initial
Advance under the Loan, or issue the initial Letter of Credit, is subject to
receipt by the Administrative Agent of each of the following, in form and
substance satisfactory to the Administrative Agent, with a copy (except for the
Notes) for each Lender:
(a) a loan certificate of the Borrower certifying as to the accuracy of its
representations and warranties in the Loan Papers, certifying that no Default or
Event of Default has occurred under the terms of this Agreement, and including a
certificate of incumbency with respect to each Authorized Officer, and
containing a representation that the following items are attached thereto, and
that each of such items remains unchanged and valid, except as shown on the
attachments: (i) copies of the Articles of Incorporation of the Borrower, each
of the Restricted Subsidiaries and Bermuda Corp., certified to be true, complete
and correct by the secretary of state of each such Person's respective state of
incorporation, (ii) copies of the By-Laws of the Borrower, each of the
Restricted Subsidiaries and Bermuda Corp. and (iii) copies of a certificate of
good standing and a certificate of existence for the Borrower and each
Restricted Subsidiary in Delaware and California, and for Bermuda Corp. in
Bermuda;
(b) duly executed Revolver Notes by the Borrower, payable to the order of
each Lender, equal to its Revolver Specified Percentage of the Revolver
Commitment on the Closing Date;
(c) a loan certificate of the Borrower certifying that a copy of the
resolutions of the Borrower and each of the Restricted Subsidiaries authorizing
them to execute, deliver and perform this Agreement, the Notes and the other
Loan Papers to which each of them is a party is attached and is a true and
accurate copy;
(d) in form and substance acceptable to the Administrative Agent, duly
executed and completed Unlimited Guaranty of the Obligations by each of the
Restricted Subsidiaries;
(e) in form and substance acceptable to the Administrative Agent, a duly
executed and completed pledge agreement by the Borrower pledging 66% of the
Capital Stock of Bermuda Corp.;
(f) original stock or membership certificates, as applicable, constituting
the pledged 66% of the issued Capital Stock of Bermuda Corp., together with
stock powers executed in blank and UCC filings requested by the Administrative
Agent;
(g) payment in full by the Borrower to the Administrative Agent in
immediately available funds of the closing fee described in the first paragraph
of that certain commitment letter dated
34
October 15, 1998 from Xxxx Xxxxxxxx and Xxxxxxxx Xxxxxx of the Administrative
Agent to Xx. Xxxxxx Xxxx of the Borrower;
(h) all other Loan Papers to be delivered on the Closing Date duly executed
and completed, dated the Closing Date;
(i) opinions addressed to Administrative Agent on behalf of the Lenders of
(i) corporate counsel to the Borrower and each Restricted Subsidiary with
respect to organizational matters, due authorization, execution, etc., (ii)
validity and enforceability under California law and (ii) special FCC counsel
and/or PUC counsel to the Borrower and the Restricted Subsidiaries, as
applicable, with respect to the Licenses of the Borrower and the Subsidiaries
and the transactions contemplated hereby, each in form and substance acceptable
to the Administrative Agent;
(j) reimbursement for Administrative Agent with respect to its reasonable
fees and expenses and for Special Counsel's reasonable fees and expenses
rendered through the Closing Date;
(k) evidence that all corporate proceedings of the Borrower and each
Restricted Subsidiary taken in connection with the transactions contemplated by
this Agreement and the other Loan Papers, shall be reasonably satisfactory in
form and substance to the Lenders and Special Counsel; and the Lenders shall
have received copies of all documents or other evidence which the Administrative
Agent, Special Counsel or any Lender may reasonably request in connection with
such transactions;
(l) copies of all UCC searches of all Properties of the Borrower and the
Restricted Subsidiaries showing no Liens except Permitted Liens and Liens
permitted under Section 8.03(b) hereof and similar evidence for lack of Liens on
property of Bermuda Corp.;
(m) a duly completed Compliance Certificate evidencing no Default or Event
of Default dated as of the Closing Date for the most recently ended fiscal
quarter;
(n) a certificate from the Borrower stating that there has been no material
adverse change in the financial condition, business, operations, or prospects of
the Borrower and its Subsidiaries since June 30, 1998;
(o) evidence satisfactory that the Borrower and each of its Subsidiaries
has (i) undertaken a detailed review and assessment of all areas within its
business and operations that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by the Borrower and
its Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), ii) developed a detailed plan and timeline for addressing the Year 2000
Problem on a timely basis, iii) to date, implemented that plan in accordance
with that timetable, iv) reasonably anticipated that all computer applications
that are material to their business and operations will on a timely basis be
able to perform properly date-sensitive functions and v) made an inquiry of each
of their key suppliers, vendors and customers as to whether such Persons will on
a timely basis be Year 2000 compliant in all material respects and, on the basis
of that inquiry, believe that all such Persons will be so compliant; and
35
(p) in form and substance satisfactory to the Lenders and Special Counsel,
such other documents, instruments and certificates as the Administrative Agent
or any Lender may reasonably require in connection with the transactions
contemplated hereby, including without limitation the status, organization or
authority of the Borrower, any Restricted Subsidiary and Bermuda Corp., and the
enforceability of and security for the Obligations.
4.02. Conditions Precedent to All Advances and Letters of Credit. The
obligation of each Lender to make each Advance hereunder (excluding each
Refinancing Advance), and the obligation of the Administrative Agent to issue
any Letter of Credit shall be subject to the further conditions precedent that
on the date of such Advance or such issuance of such Letter of Credit:
(a) All of the representations and warranties of the Borrower under this
Agreement shall be true and correct at such time in all material respects, both
before and after giving effect to the application of the proceeds of the Advance
or the issuance of the Letter of Credit, except those representations and
warranties that specifically speak as of a particular date;
(b) The incumbency of the Authorized Officers shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 4.01(a) or as subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Agent. The Lenders may, without
waiving this condition, consider it fulfilled and a representation by the
Borrower made to such effect if no written notice to the contrary, dated on or
before the date of such Advance or the issuance of such Letter of Credit, is
received by the Administrative Agent from the Borrower prior to the making of
such Advance or such Letter of Credit;
(c) There shall not exist a Default or an Event of Default hereunder and
none shall exist as a result of making any such Advance or issuing such Letter
of Credit, and the Administrative Agent shall have received written or
telephonic certification thereof by an Authorized Officer (which certification,
if telephonic, shall be followed promptly by written certification);
(d) No event shall have occurred that could reasonably be expected to cause
a Material Adverse Change since June 30, 1998;
(e) In the case of each Letter of Credit, Borrower shall have delivered to
the Administrative Agent a duly executed and complete Application acceptable to
Administrative Agent; and
(f) In the case of any Revolver Advance, the aggregate outstanding Revolver
Advances after giving effect to such proposed Revolver Advance, plus the sum of
the face amount of all outstanding Letters of Credit plus all reimbursement
obligations under Article III hereof, shall not exceed the Revolver Commitment.
36
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties. The Borrower hereby represents
and warrants to each Lender as follows:
(a) The respective jurisdictions of incorporation and percentage ownership
of the Subsidiaries of the Borrower on the Closing Date and listed on Schedule
--------
5.01(a) hereto are true and correct. Each of the Borrower, the Restricted
-------
Subsidiaries and Bermuda Corp. is a entity duly organized, validly existing and
in good standing under the laws of its state of organization. Each of the
Borrower, the Restricted Subsidiaries and Bermuda Corp. has the corporate power
and corporate authority to own its properties and to carry on its business as
now being conducted. Each of the Borrower, the Restricted Subsidiaries and
Bermuda Corp. is duly qualified, in good standing and authorized to do business
in each jurisdiction in which the character of its Properties or the nature of
its business requires such qualification or authorization, except where the
failure to so qualify could not reasonably be expected to cause a Material
Adverse Change.
(b) The Borrower has corporate power and has taken all necessary corporate
action to authorize it to borrow hereunder. Each of the Borrower and the
Restricted Subsidiaries has corporate power and has taken all necessary
corporate action to execute, deliver and perform the Loan Papers to which it is
party in accordance with the terms thereof, and to consummate the transactions
contemplated thereby. Each Loan Paper has been duly executed and delivered by
the Borrower or such Restricted Subsidiary executing it. Each of the Loan
Papers to which the Borrower and the Restricted Subsidiaries are party is a
legal, valid and binding obligation of the Borrower or such Restricted
Subsidiary, as applicable, enforceable in accordance with its terms, subject, to
enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the Borrower or any Subsidiary of the Borrower).
(c) The execution, delivery and performance by the Borrower and the
Restricted Subsidiaries of the other Loan Papers to which they are respectively
a party, and the consummation of the transactions contemplated thereby, do not
and will not (i) require any consent or approval not already obtained, (ii)
violate any Applicable Law, (iii) conflict with, result in a breach of, or
constitute a default under the articles of incorporation or by-laws of the
Borrower or any Restricted Subsidiary, or under any material License, indenture,
agreement or other instrument, to which the Borrower or any Restricted
Subsidiary is a party or beneficiary of, or by which they or their respective
Properties may be bound, or (iv) result in or require the creation or imposition
of any Lien upon or with respect to any property now owned or hereafter acquired
by the Borrower or any Restricted Subsidiary, except Permitted Liens.
(d) The Borrower and its Subsidiaries are primarily engaged in the
operation of telecommunications, internet and pursuing activities related
thereto.
(e) On the Closing Date, all material Licenses of the Borrower, the
Restricted Subsidiaries and Bermuda Corp. have been duly authorized and
obtained, and are in full force and effect. The
37
Borrower, the Restricted Subsidiaries and Bermuda Corp. are in compliance in all
material respects with all provisions thereof. On the Closing Date, no material
License is the subject of any pending or, to the best of the Borrower's
knowledge, threatened challenge or revocation. On each date after the Closing
Date on which this representation is deemed to be made, no material License is
the subject of any pending or, to the best of the Borrower's knowledge,
threatened challenge or revocation, which such event could reasonably be
expected to cause a Material Adverse Change. The Borrower, the Restricted
Subsidiaries and Bermuda Corp. are not required to obtain any material License
that has not already been obtained from, or effect any material filing or
registration that has not already been effected with, the FCC, any applicable
PUC or any other federal, state or local regulatory authority in connection with
the execution and delivery of this Agreement or any other Loan Paper, or the
performance thereof (other than any enforcement of remedies by the
Administrative Agent on behalf of the Lenders), in accordance with their
respective terms, including any borrowings hereunder.
(f) The Borrower, the Restricted Subsidiaries and Bermuda Corp. are in
compliance in all material respects with all material Applicable Laws. The
Borrower, the Restricted Subsidiaries and Bermuda Corp. have duly and timely
filed all reports, statements and filings that are required to be filed by any
of them under the Communications Act, and are in all material respects in
compliance therewith, including without limitation the rules and regulations of
the FCC and each applicable PUC. Except as set forth on Schedule 5.01(f)
----------------
hereto, as of the Closing Date, the Borrower is not aware of any event or
circumstance constituting noncompliance (or any Person alleging noncompliance)
with any rule or regulation of the FCC or any applicable PUC. On each date
after the Closing Date on which this representation is deemed to be made, the
Borrower is not aware of any event or circumstance constituting noncompliance
(or any Person alleging noncompliance) with any rule or regulation of the FCC or
any applicable PUC, which such event or circumstance could reasonably be
expected to cause a Material Adverse Change.
(g) On the Closing Date, the Borrower, the Restricted Subsidiaries and
Bermuda Corp. have good and indefeasible title to, or a valid leasehold interest
in, all of their material assets and Properties. On each date after the Closing
Date on which this representation is deemed to be made, the Borrower, the
Restricted Subsidiaries and Bermuda Corp. have good and indefeasible title to,
or a valid leasehold interest in, all of their material assets and Properties,
in which any such failure could reasonably be expected to cause a Material
Adverse Change. None of the assets of the Borrower, the Restricted Subsidiaries
and Bermuda Corp. is subject to any Liens, except Permitted Liens and Liens
permitted under Section 8.03(b) hereof. No financing statement or other Lien
filing authorized by the Borrower, any Restricted Subsidiary or Bermuda Corp.
(except relating to Permitted Liens and Liens permitted by Section 8.03(b)
hereof) is on file in any state or jurisdiction that names the Borrower, any of
the Restricted Subsidiaries or Bermuda Corp. as debtor or covers (or purports to
cover) any assets of the Borrower, any of the Restricted Subsidiaries or Bermuda
Corp. The Borrower, the Restricted Subsidiaries and Bermuda Corp. have not
signed any such financing statement or filing, nor any security agreement
authorizing any Person to file any such financing statement or filing.
(h) On the Closing Date, except as reflected on Schedule 5.01(h) hereto,
----------------
there is no action, suit, proceeding or any other Litigation pending against,
or, to the best of the Borrower's knowledge,
38
threatened against the Borrower or any of its Subsidiaries, or in any other
manner relating directly and materially adversely to the Borrower any of its
Subsidiaries, or any of their material Properties, in any court or before any
arbitrator of any kind or before or by any governmental body. On each date after
the Closing Date on which this representation is deemed to be made, there is no
action, suit, proceeding or any other Litigation pending against, or, to the
best of the Borrower's knowledge, threatened against the Borrower or any of its
Subsidiaries, or in any other manner relating to the Borrower or any of its
Subsidiaries, or any of their Properties, in any court or before any arbitrator
of any kind or before or by any governmental body, which could reasonably be
expected to cause a Material Adverse Change.
(i) All federal, state and other Tax returns of the Borrower and its
Subsidiaries required by law to be filed have been duly filed and all federal,
state and other Taxes, assessments and other governmental charges or levies upon
the Borrower, its Subsidiaries or any of their Properties, income, profits and
assets, which are due and payable, have been paid, except those that are
diligently contested in good faith by the Borrower and for which a reserve has
been established in accordance with GAAP, and no Lien (other than a Permitted
Lien) has attached and no foreclosure, distraint, sale or similar proceedings
have been commenced.
(j) The Borrower has furnished or caused to be furnished to the Lenders
copies of its financial statements at June 30, 1998 which are prepared in good
faith and complete in all material respects. Each such statement presents
fairly in all material respects and in accordance with GAAP, the financial
position of the Borrower, the Restricted Subsidiaries and Bermuda Corp. as at
such dates, and the results of operations for the periods then ended. The
Borrower, the Restricted Subsidiaries and Bermuda Corp. have no material
liabilities, contingent or otherwise, nor material losses, except as disclosed
in writing to the Lenders prior to the Closing Date or as disclosed on any
subsequent financial statements. On the Closing Date after giving effect to the
Advances made on such date, the Borrower, Bermuda Corp. and each of the
Restricted Subsidiaries is Solvent.
(k) On the Closing Date, since the date of the most recent financial
statements delivered to the Lenders, no event or circumstances have occurred or
arisen that could reasonably be expected to cause a Material Adverse Change.
(l) None of the Borrower or its Controlled Group maintains or contributes
to any Plan other than those disclosed to the Administrative Agent in writing.
Each such Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, and any other applicable Federal or state law,
rule or regulation. With respect to each Plan of the Borrower and each member
of its Controlled Group (other than a Multiemployer Plan), all reports required
under ERISA or any other Applicable Law to be filed with any governmental
authority, the failure of which to file could reasonably result in liability of
the Borrower or any member of its Controlled Group in excess of $100,000, have
been duly filed. All such reports are true and correct in all material respects
as of the date given. No such Plan of the Borrower or any member of its
Controlled Group has any accumulated funding deficiency (as defined in Section
412(a) of the Code) (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested. None of the Borrower or any member of its Controlled
Group has failed to make any contribution or pay any amount due or owing as
required by Section 412 of
39
the Code or Section 302 of ERISA or the terms of any such Plan prior to the due
date under Section 412 of the Code and Section 302 of ERISA. There has been no
ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C),
4068(f), 4063(a) or 4043(b) of ERISA with respect to any Plan or trust of the
Borrower or any member of its Controlled Group since the effective date of
ERISA. The value of the assets of each Plan (other than a Multiemployer Plan) of
the Borrower and each member of its Controlled Group equaled or exceeded the
present value of the benefit liabilities, as defined in Title IV of ERISA, of
each such Plan as of the most recent valuation date using Plan actuarial
assumptions at such date. There are no pending or, to the best of the Borrower's
knowledge, threatened claims, lawsuits or actions (other than routine claims for
benefits in the ordinary course) asserted or instituted against, and neither the
Borrower nor any member of its Controlled Group has knowledge of any threatened
Litigation or claims against, (i) the assets of any Plan or trust or against any
fiduciary of a Plan with respect to the operation of such Plan, or (ii) the
assets of any employee welfare benefit plan within the meaning of Section 3(1)
or ERISA, or against any fiduciary thereof with respect to the operation of any
such plan. None of the Borrower or any member of its Controlled Group has
engaged in any non-exempt prohibited transactions, within the meaning of Section
406 or Section 4.08 of ERISA or Section 4975 of the Code, in connection with any
Plan. None of the Borrower or any member of its Controlled Group has incurred or
reasonably expects to incur (A) any liability under Title IV of ERISA (other
than premiums due under Section 4007 of ERISA to the PBGC), (B) any withdrawal
liability (and no event has occurred which with the giving of notice under
Section 4219 of ERISA would result in such liability) under Section 4201 of
ERISA as a result of a complete or partial withdrawal (within the meaning of
Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C) any liability
under Section 4062 of ERISA to the PBGC or to a trustee appointed under Section
4042 of ERISA. None of the Borrower, any member of its Controlled Group, or any
organization to which the Borrower or any member of its Controlled Group is a
successor or parent corporation within the meaning of ERISA Section 4069(b), has
engaged in a transaction within the meaning of ERISA Section 4069. None of the
Borrower or any member of its Controlled Group maintains or has established any
welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
for continuing benefits or coverage for any participant or any beneficiary of
any participant after such participant's termination of employment except as may
be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") and the regulations thereunder, and at the expense of the
participant or the beneficiary of the participant, or retiree medical
liabilities. Each of the Borrower and its Controlled Group which maintains a
welfare benefit plan within the meaning of Section 3(1) of ERISA has complied in
all material respects with any applicable notice and continuation requirements
of COBRA and the regulations thereunder.
(m) The Borrower is not, nor is any of the Restricted Subsidiaries or
Bermuda Corp. engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying any
margin stock within the meaning of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, and no part of the proceeds of the
Advances will be used to purchase or carry any margin stock (as defined by
Regulation U) or to extend credit to others for the purpose of purchasing or
carrying any margin stock. Not more than 25% of the assets of the Borrower or
any of its Subsidiaries are margin stock (as defined by Regulation U), and none
of the Capital Stock of the Borrower's Subsidiaries is margin stock. None of
the Borrower and its Subsidiaries, nor any agent acting on their behalf, have
taken or will
40
knowingly take any action which might cause this Agreement or any Loan Papers to
violate any regulation of the Board of Governors of the Federal Reserve System
or to violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
(n) The Borrower, the Restricted Subsidiaries and Bermuda Corp. are in
compliance with all of the provisions of their articles of incorporation and by-
laws. As of the Closing Date, no event has occurred or failed to occur, which
has not been remedied or waived, the occurrence or non-occurrence of which
constitutes, or which with the passage of time or giving of notice or both would
constitute, (i) an Event of Default or (ii) a default by the Borrower, any of
the Restricted Subsidiaries or Bermuda Corp. under any material contract, or
other material indenture, agreement or other instrument, or any judgment, decree
or order to which the Borrower, any of the Restricted Subsidiaries or Bermuda
Corp. is a party or by which they or any of their material Properties is bound.
On each date after the Closing Date on which this representation is deemed to be
made, no event has occurred or failed to occur, which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes, or which with the
passage of time or giving of notice or both would constitute, (i) an Event of
Default or (ii) a default by the Borrower, any of the Restricted Subsidiaries or
Bermuda Corp. under any material contract or other material indenture, agreement
or other instrument, or any judgment, decree or order to which the Borrower, any
of the Restricted Subsidiaries or Bermuda Corp. is a party or by which they or
any of their material Properties is bound, that could reasonably be expected to
cause a Material Adverse Change.
(o) The Borrower is not, nor is any of its Subsidiaries, required to
register under the provisions of the Investment Company Act of 1940, as amended.
Neither the entering into or performance by the Borrower of this Agreement nor
the issuance of the Notes, nor the execution, delivery and performance of the
obligations under the Loan Papers by the Borrower and its Subsidiaries,
violates any provision of such act or requires any consent, approval, or
authorization of, or registration with, the Securities and Exchange Commission
or any other governmental or public body of authority pursuant to any provisions
of such act.
(p) On the Closing Date, none of the Borrower or any of its Subsidiaries
has any actual knowledge or reason to believe that any substance deemed
hazardous by any applicable Environmental Law, has been installed on any real
property now owned by the Borrower or any of its Subsidiaries, except (i) for
hazardous substances the presence of which is not in violation of law and (ii)
as disclosed in writing to the Lenders. On each date after the Closing Date on
which this representation is deemed to be made, none of the Borrower nor any
Restricted Subsidiary or Bermuda Corp. has any actual knowledge or reason to
believe that any substance deemed hazardous by any applicable Environmental Law,
has been installed in violation of law on any real property now owned by the
Borrower or any of the Restricted Subsidiaries or Bermuda Corp. except as
disclosed to the Lenders in writing, and which could not, in the reasonable
judgment of the Borrower, cause a Material Adverse Change. As of the Closing
Date, the Borrower, the Restricted Subsidiaries and Bermuda Corp. are not in
violation of or subject to any existing, pending or, to the best of the
Borrower's knowledge, threatened investigation or inquiry by any governmental
authority or to any material remedial obligations under any applicable
Environmental Laws, and this representation and warranty would continue to be
true and correct following disclosure to the applicable governmental authorities
of all relevant facts, conditions and circumstances, if any, pertaining to any
real property
41
of the Borrower, the Restricted Subsidiaries and Bermuda Corp. On each date
after the Closing Date on which this representation is deemed to be made, the
Borrower, the Restricted Subsidiaries and Bermuda Corp. are not in violation of
or subject to any existing, pending or, to the best of the Borrower's knowledge,
threatened investigation or inquiry by any governmental authority or to any
material remedial obligations under any applicable Environmental Laws which
could cause a Material Adverse Change, and this representation and warranty
would continue to be true and correct following disclosure to the applicable
governmental authorities of all relevant facts, conditions and circumstances, if
any, pertaining to any real property of the Borrower, the Restricted
Subsidiaries and Bermuda Corp. The Borrower, the Restricted Subsidiaries and
Bermuda Corp. are not required to obtain any permits, Licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property of the Borrower, any
Restricted Subsidiary or Bermuda Corp. by reason of any applicable Environmental
Laws, except those that have been obtained. As of the Closing Date, the
Borrower, the Restricted Subsidiaries and Bermuda Corp. have no actual knowledge
or reason to believe, after reasonable investigation, that any hazardous
substances or solid wastes have been disposed of or otherwise released on or to
the real property of the Borrower, any of its Restricted Subsidiaries or Bermuda
Corp. in violation of any applicable Environmental Law. On each date after the
Closing Date on which this representation is deemed to be made, the Borrower,
the Restricted Subsidiaries and Bermuda Corp. have no actual knowledge or reason
to believe, that any hazardous substances or solid wastes have been disposed of
or otherwise released on or to the real property of the Borrower, any of the
Restricted Subsidiaries and Bermuda Corp., within the meaning of the applicable
Environmental Laws, except as disclosed to the Lenders and which such disposal
or release could not cause a Material Adverse Change.
(q) On the Closing Date, there is no Litigation, or, to the best of the
Borrower's knowledge, threatened Litigation or pending or threatened claim of
breach or default, with respect to any material contract, or any loan agreement
or document evidencing any Debt for Borrowed Money of the Borrower or any of its
Subsidiaries that has not been disclosed in writing to the Lenders.
(r) All Capital Stock of the Borrower and its Subsidiaries has been duly
authorized and validly issued, and is fully paid and nonassessable. The Capital
Stock described on Schedule 5.01(a) hereto constitutes all the issued and
----------------
outstanding Capital Stock of the Borrower and the Subsidiaries of the Borrower,
or the Subsidiaries of another Subsidiary of the Borrower, except such shares
that have been issued after the Closing Date. No Person has conversion rights
with respect to, or any subscription rights, calls, commitments or claims of any
character for, or any repurchase or redemption options relating to, the Capital
Stock of the Borrower and its Subsidiaries, other than those that have been
waived. The Capital Stock of the Borrower and the Subsidiaries of the Borrower
when issued or sold, was either (i) registered or qualified under applicable
federal or state securities laws, or (ii) exempt therefrom.
(s) No broker's, finder's or other fee or commission will be payable by the
Borrower (other than to the Lenders hereunder) with respect to the making of the
Commitment or the Advances hereunder. The Borrower agrees to indemnify and hold
harmless the Administrative Agent and each Lender from and against any claims,
demand, liability, proceedings, costs or expenses asserted with respect to or
arising in connection with any such fees or commissions.
42
(t) No event has occurred which permits (or with the passage of time would
permit) the revocation or termination of any material License, which could
result in the imposition of any restriction thereon of such a nature that could
reasonably be expected to cause a Material Adverse Change.
(u) To the best knowledge of the Borrower, as of the Closing Date, the
Borrower and its Subsidiaries have obtained all material patents, trademarks,
service-marks, trade names, copyrights, Licenses and other rights, free from
burdensome restrictions, that are necessary for the operation of their business
as presently conducted and as proposed to be conducted. On each date afer the
Closing Date on which this representation is deemed to be made, the Borrower,
the Restricted Subsidiaries and Bermuda Corp. have obtained all patents,
trademarks, service-marks, trade names, copyrights, Licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
business as presently conducted and as proposed to be conducted, except those,
the failure of which to obtain could not be reasonably expected to cause a
Material Adverse Change. Nothing has come to the attention of the Borrower, any
of the Restricted Subsidiaries or Bermuda Corp. to the effect that (i) any
process, method, part or other material presently contemplated to be employed by
the Borrower, any Restricted Subsidiary or Bermuda Corp. may infringe any
patent, trademark, service-xxxx, trade name, copyright, License or other right
owned by any other Person, or (ii) there is pending or overtly threatened any
claim or Litigation against or affecting the Borrower, any Restricted Subsidiary
or Bermuda Corp. contesting its right to sell or use any such process, method,
part or other material, which could reasonably be expected to cause a Material
Adverse Change.
(v) Neither this Agreement nor any other document, certificate or statement
which has been furnished to any Lender by or on behalf of the Borrower or any of
its Subsidiaries in connection herewith contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statement contained herein and therein not misleading at the time it was
furnished. On the Closing Date, there is no fact known to the Borrower and not
known to the public generally that could reasonably be expected to cause a
Material Adverse Change, which has not been set forth in this Agreement or in
the documents, certificates and statements furnished to the Lenders by or on
behalf of the Borrower prior to the date hereof in connection with the
transaction contemplated hereby. On each date after the Closing Date on which
this representation is deemed to be made, there is no fact known to the Borrower
or any of its Subsidiaries, and not known to the public generally, that could
reasonably be expected to cause a Material Adverse Change, which has not been
disclosed to the Lenders in writing.
(w) The Borrower is not, nor is any Restricted Subsidiary or Bermuda Corp.,
a party to any contractual relationship which is breached or in default solely
as a result of any change in the ownership or management of the Borrower, or the
Board of Directors, unless the Borrower has agreed to a substantially similar
provision in this Agreement.
43
(x) Year 2000 Compliance.
(a) The Borrower has (i) undertaken a detailed review and assessment
of all areas within its business and operations that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
hardware and software used by the Borrower and its Subsidiaries may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999 (including
recognizing and performing properly date-sensitive functions in leap
years)), (ii) developed a detailed plan, timeline and budget for addressing
the Year 2000 Problem on a timely basis, and (iii) to date, implemented
that plan in accordance with that timetable and budget. The aggregate
costs to and charges by the Borrower related to the Year 2000 Problem and
being Year 2000 Compliant shall not exceed an amount which could result in
a Material Adverse Change.
(b) Each of the Borrower and its Subsidiaries is in the process of
making inquiry of each of its key suppliers, vendors and customers as to
whether such Person will on a timely basis be Year 2000 Compliant in all
material respects. "Key suppliers, vendors and customers" refers to those
suppliers, vendors and customers of the Borrower and its Subsidiaries, the
business failure of which could result in a Material Adverse Change.
5.02. Survival of Representations and Warranties. All representations
and warranties made under this Agreement and the other Loan Papers shall be
deemed to be made at and as of the Closing Date and at and as of the date of
each Advance, and each shall be true and correct in all material respects when
made. All such representations and warranties shall survive, and not be waived
by, the execution hereof by any Lender, any investigation or inquiry by any
Lender, or by the making of any Advance under this Agreement.
ARTICLE VI. GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
6.01. Preservation of Existence and Similar Matters.
(a) The Borrower shall, and shall cause each Restricted Subsidiary and
Bermuda Corp. to, preserve and maintain, or timely obtain and thereafter
preserve and maintain (i) material rights, franchises, authorizations, consents,
privileges and all other material Licenses from federal, state and local
governmental bodies and any Tribunal (regulatory or otherwise) which the
Borrower, such Restricted Subsidiary or Bermuda Corp. deems reasonably necessary
or advisable to conduct its business in the ordinary course, and (ii) its
existence (except as permitted by Section 8.05 hereof); and
(b) The Borrower shall, and shall cause each Restricted Subsidiary and
Bermuda Corp. to, qualify and remain qualified and authorized to do business in
each jurisdiction in which the
44
character of its Properties or the nature of its business requires such
qualification or authorization, except where the failure to do so could not
cause a Material Adverse Change.
6.02. Business; Compliance with Applicable Law. The Borrower shall, and
shall cause the Restricted Subsidiaries and Bermuda Corp. to (a) engage
primarily in the business of telecommunications and internet, and activities
related thereto, and (b) comply in all material respects with the requirements
of all Applicable Law, except where the failure to do so could not cause a
Material Adverse Change.
6.03. Maintenance of Properties. The Borrower shall, and shall cause
each Restricted Subsidiary and Bermuda Corp. to, maintain or cause to be
maintained all their material Properties necessary to the conduct of their
business (whether owned or held under lease) in reasonably good repair, working
order and condition, taken as a whole, and from time to time make or cause to be
made all appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
6.04. Accounting Methods and Financial Records. The Borrower shall, and
shall cause each Restricted Subsidiary and Bermuda Corp. to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made and
all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. The Borrower shall, and shall cause
each of the Restricted Subsidiaries and Bermuda Corp. to maintain a fiscal year
ending on December 31.
6.05. Insurance. The Borrower shall, and shall cause each Restricted
Subsidiary and Bermuda Corp. to, maintain insurance from responsible companies
in such amounts and against such risks as shall be customary and usual in the
industry for companies of similar size and capability, but in no event less than
the amount and types insured as of the Closing Date.
6.06. Payment of Taxes and Claims. The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge all Taxes, assessments and
governmental charges or levies imposed upon it or its income or Properties prior
to the date on which penalties attach thereto, and all lawful material claims
for labor, materials and supplies which, if unpaid, might become a Lien upon any
of their Properties or assets except those Taxes, assessments and charges
contested by the Borrower diligently in good faith, and for which adequate
reserves have been established in accordance with GAAP. The Borrower shall, and
shall cause each of its Subsidiaries to, timely file all information returns
required by federal, state or local Tax authorities.
6.07. Visits and Inspections. The Borrower shall, and shall cause each
Restricted Subsidiary and Bermuda Corp. to, promptly, permit representatives of
the Administrative Agent or any Lender from time to time, upon prior notice
reasonable under the circumstances, to (a) visit and inspect the Properties of
the Borrower, each Restricted Subsidiary and Bermuda Corp. as often as the
Administrative Agent or any Lender shall deem advisable, (b) inspect and make
extracts from and copies of the Borrower's, each Restricted Subsidiary's and
Bermuda Corp.'s books and records, and (c) discuss with the Borrower's, each
Restricted Subsidiary's and Bermuda Corp.'s directors, officers,
45
employees and the auditors of the Borrower, the Restricted Subsidiaries and
Bermuda Corp., its business, assets, liabilities, financial positions, results
of operations and business prospects.
6.08. Payment of Debt for Borrowed Money. The Borrower shall, and shall
cause each Restricted Subsidiary and Bermuda Corp. to, pay its Debt for Borrowed
Money when and as the same becomes due.
6.09. Use of Proceeds. The Borrower shall use the proceeds of the
Revolver Advances exclusively (a) for Permitted Acquisitions consummated by the
Borrower and the Restricted Subsidiaries, (b) for Capital Expenditures made by
the Borrower and the Restricted Subsidiaries and permitted under the terms of
this Agreement, (c) for working capital of the Borrower and the Restricted
Subsidiaries and (d) for other lawful corporate purposes of the Borrower and the
Restricted Subsidiaries.
6.10. Indemnity.
(a) The Borrower shall, and shall cause each Restricted Subsidiary and
Bermuda Corp. to, defend, protect, indemnify and hold harmless the
Administrative Agent, each Lender, each of their respective Affiliates, and each
of their respective (including such Affiliates') officers, directors, employees,
agents, attorneys, shareholders and consultants (including, without limitation,
those retained in connection with the satisfaction or attempted satisfaction of
any of the conditions set forth herein) of each of the foregoing (collectively,
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees (whether direct, indirect
or consequential and whether based on any federal, state, or local laws and
regulations), under common law or at equitable cause, or on contract, tort or
otherwise, arising from or connected with the past, present or future operations
of the Borrower any of its Subsidiaries, or any of their predecessors in
interest, in any manner relating to or arising out of this Agreement, the Loan
Papers, or any act, event or transaction or alleged act, event or transaction
relating or attendant thereto, the making of any participations in the Advances
and the management of the Advances, including in connection with, or as a
result, in whole or in part, of any negligence of Administrative Agent or any
Lender (other than those matters raised exclusively by a participant against the
Administrative Agent or any Lender and not the Borrower), or the use or intended
use of the proceeds of the Advances hereunder, or in connection with any
investigation of any potential matter covered hereby, but excluding any claim or
liability that arises as the result of the gross negligence or willful
misconduct of any Indemnitee, as finally judicially determined by a court of
competent jurisdiction (collectively, the "Indemnified Matters").
(b) In addition, the Borrower shall, and shall cause each Restricted
Subsidiary and Bermuda Corp. to, periodically, upon request, reimburse each
Indemnitee for its reasonable legal and other actual expenses (including the
cost of any investigation and preparation) incurred in connection with any
Indemnified Matter. If for any reason the foregoing indemnification is
unavailable to any
46
Indemnitee or insufficient to hold any Indemnitee harmless with respect to
Indemnified Matters, then the Borrower, the Restricted Subsidiaries and Bermuda
Corp. shall contribute to the amount paid or payable by such Indemnitee as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the Borrower,
the Restricted Subsidiaries and Bermuda Corp., and the Borrower's stockholders,
the Restricted Subsidiaries' stockholders and Bermuda Corp.'s stockholders, on
the one hand and such Indemnitee on the other hand but also the relative fault
of the Borrower, the Restricted Subsidiaries and such Indemnitee, as well as any
other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations under this Section shall be in addition to any
liability which the Borrower may otherwise have, shall extend upon the same
terms and conditions to each Indemnitee, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of
the Borrower, the Restricted Subsidiaries, Bermuda Corp., the Administrative
Agent, the Lenders and all other Indemnitees. This Section shall survive any
termination of this Agreement and payment of the Obligations.
6.11. Environmental Law Compliance. The use which the Borrower or any
of its Subsidiaries intends to make of any real Property owned by it will not
result in the disposal or other release of any hazardous substance or solid
waste on or to such real Property in violation of any Environmental Law. As
used herein, the terms "hazardous substance" and "release" as used in this
Section shall have the meanings specified in CERCLA (as defined in the
definition of applicable Environmental Laws), and the terms "solid waste" and
"disposal" shall have the meanings specified in RCRA (as defined in the
definition of applicable Environmental Laws); provided, however, that if CERCLA
or RCRA is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment; and provided further, to the extent that any other law applicable to
the Borrower, any of its Subsidiaries or any of their properties and assets
establishes a meaning for "hazardous substance," "release," "solid waste," or
"disposal" which is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply. The Borrower shall, and shall cause each
Restricted Subsidiary and Bermuda Corp. to, indemnify and hold the
Administrative Agent and each Lender harmless from and against, and to reimburse
them with respect to, any and all claims, demands, causes of action, loss,
damage, liabilities, costs and expenses (including reasonable attorneys' fees
and courts costs) of any kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any of them at any time and from
time to time by reason of or arising out of (a) the failure of the Borrower or
any of its Subsidiaries to perform any obligation hereunder regarding asbestos
or applicable Environmental Laws, (b) any violation on or before the Release
Date of any applicable Environmental Law in effect on or before the Release
Date, and (c) any act, omission, event or circumstance existing or occurring on
or prior to the Release Date (including without limitation the presence on such
real Property or release from such real Property of hazardous substances or
solid wastes disposed of or otherwise released on or prior to the Release Date),
resulting from or in connection with the ownership of the real Property,
regardless of whether the act, omission, event or circumstance constituted a
violation of any applicable Environmental Law at the time of its existence or
occurrence, or whether the act, omission, event or circumstance is caused by or
relates to the negligence of any indemnified Person; provided, that the Borrower
shall not be under any obligation to indemnify the Administrative Agent or any
Lender to the extent that any such liability arises as the result of the gross
negligence or willful misconduct of such Person, as finally judicially
determined by a court of competent jurisdiction. The
47
provisions of this paragraph shall survive the Release Date and shall continue
thereafter in full force and effect.
6.12. Acquisitions, Generally. In connection with any Permitted
Acquisition made by the Borrower or any Restricted Subsidiary during the term of
this Agreement, the Borrower shall or shall cause such Restricted Subsidiary to,
(a) not less than ten Business Days prior to the proposed acquisition date,
deliver to Administrative Agent a detailed written description of the proposed
Permitted Acquisition in form reasonably acceptable to the Administrative Agent,
and (b) prior to the consummation of the acquisition a statement certified by an
Authorized Officer that (i) the proposed transaction complies with the
definition of Permitted Acquisition set forth in Article I hereof and with the
terms and conditions set forth in Section 8.05(b) hereof and/or, to the extent
applicable, Section 8.05(d) hereof, and (ii) no Default or Event of Default
exists prior to or after giving effect to any requested Advance or the
consummation of such acquisition, or will exist upon consummation of the
proposed acquisition and related borrowings and transactions, together with a
Compliance Certificate computed after giving effect to such acquisition and
borrowings.
6.13. Subsidiary Designation. The Borrower agrees that each Restricted
Subsidiary on the Closing Date will remain a Restricted Subsidiary until the
Obligations have been repaid in full and the Commitment has been terminated.
6.14. Subsidiary Creation or Acquisition. None of the Borrower, any
Restricted Subsidiary or Bermuda Corp. may create or acquire any Subsidiary
without 20 days prior written notice to the Administrative Agent in accordance
with the terms of Section 11.02 hereof.
6.15. Year 2000 Compliance. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of it Subsidiaries' business and operations will not be
Year 2000 Compliant on a timely basis, except to the extent that such failure
could not be reasonably expected to cause a Material Adverse Change.
6.16. Eurocurrency Conversion to the Euro.
(a) If, as a result of the implementation of the European economic and
monetary union ("EMU"), (i) any currency in which a Letter of Credit may be
issued under this Agreement (a "National Currency") ceases to be lawful currency
of the state issuing the same and is replaced by a European single or common
currency (the "Euro") or (ii) any National Currency and the Euro are at the same
time both recognized by the central bank or comparable governmental authority of
the state issuing such currency as lawful currency of such state, then any
amount payable hereunder by any party hereto in such National Currency
(including, without limitation, any Advance to be made under this Agreement)
shall instead be payable in the Euro and the amount so payable shall be
determined by redenominating or converting such amount into the Euro at the
exchange rate officially fixed by the European Central Bank for the purpose of
implementing the EMU, provided, that to the extent any EMU legislation provides
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that an amount denominated either in the Euro or in the applicable National
Currency can be paid either in Euros or in the applicable National Currency,
each party to this Agreement shall be entitled to pay or repay such amount in
Euros or in the applicable
48
National Currency. Prior to the occurrence of the event or events described in
clause (i) or (ii) of the preceding sentence, each amount payable hereunder in
any such National Currency will, except as otherwise provided herein, continue
to be payable only in that National Currency.
(b) Borrower shall from time to time, at the request of the Administrative
Agent pay to the Administrative Agent for the account of each Lender the amount
of any cost or increased cost incurred by, or of any reduction in any amount
payable to or in the effective return on its capital to, or of interest or other
return foregone by, such Lender or any Affiliate of such Lender as a result of
the introduction of, changeover to or operation of the Euro in any applicable
state.
(c) In addition, this Agreement (including, without limitation, the
definition of LIBOR Rate) will be amended to the extent determined by the
Administrative Agent (acting reasonably and in consultation with the Borrower)
to be necessary to reflect such implementation of the EMU and change in currency
and to put the Lenders and the Borrower in the same position, so far as
possible, that they would have been in if such implementation and change in
currency had not occurred. Except as provided in the foregoing provisions of
this Section 6.17, no such implementation or change in currency nor any economic
------------
consequences resulting therefrom shall (i) give rise to Borrower's termination
prematurely, contest, cancellation, rescission, alteration, modification or
renegotiation the provisions of this Agreement or (ii) discharge, excuse or
otherwise affect the performance of any obligations of Borrower under this
Agreement or other Loan Papers.
ARTICLE VII. INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled), the Borrower shall furnish or cause
to be furnished to each Lender:
7.01. Quarterly Financial Statements and Information. Within 45 days
after the end of each fiscal quarter, (a) consolidated and consolidating balance
sheets of the Borrower, the Restricted Subsidiaries and Bermuda Corp., and (b)
consolidated balance sheets of the Borrower and its Subsidiaries, in each case,
as at the end of such quarter, and the related consolidated and consolidating
statements of income and consolidated statements of changes in cash for such
quarter and for the elapsed portion of the year ended with the last day of such
quarter, all of which shall be certified by an Authorized Officer, to, in his or
her opinion, present fairly in all material respects, in accordance with GAAP,
the financial position and results of operations of the Borrower, the Restricted
Subsidiaries and Bermuda Corp., and the Borrower and its Subsidiaries,
respectively, as at the end of and for such period, and for the elapsed portion
of the year ended with the last day of such period.
7.02. Annual Financial Statements and Information.
49
(a) Within 120 days after the end of each fiscal year, a copy of (i) (A)
the consolidated and consolidating balance sheets of the Borrower, the
Restricted Subsidiaries and Bermuda Corp., and (B) the consolidated balance
sheets of the Borrower and its Subsidiaries, in each case, as of the end of the
current and prior fiscal years and (ii) (A) consolidated and consolidating
statements of earnings, statements of changes in shareholders' equity, and
statements of changes in cash as of and through the end of such fiscal year for
the Borrower, the Restricted Subsidiaries and Bermuda Corp., and (B)
consolidated statements of earnings, statements of changes in shareholders'
equity, and statements of changes in cash as of and through the end of such
fiscal year for the Borrower and its Subsidiaries, all of which are prepared in
accordance with GAAP, and certified by independent certified public accountants
acceptable to the Lenders, whose opinion shall be in scope and substance in
accordance with GAAP and shall be unqualified.
(b) As soon as available, but in any event within 60 days following the end
of each fiscal year, a copy of the annual consolidated operating budget of the
Borrower and the Restricted Subsidiaries and the Borrower and its Subsidiaries
for the succeeding fiscal year.
7.03. Compliance Certificates. At the time financial statements are
furnished pursuant to Section 7.01 and Section 7.02 hereof, a duly completed
Compliance Certificate evidencing no Default or Event of Default, or to the
extent that a Default or Event of Default exists, the steps being taken to cure
such Default or Event of Default.
7.04. Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Borrower, any Restricted Subsidiary or
Bermuda Corp. by accountants in connection with any annual, interim or special
audit, including without limitation any report prepared in connection with the
annual audit referred to in Section 7.02 hereof, and any other comment letter
submitted to management in connection with any such audit, (ii) each financial
statement, report, notice or proxy statement sent by the Borrower, any
Restricted Subsidiary or Bermuda Corp. to stockholders generally, (iii) each
regular or periodic report and any registration statement or prospectus (or
material written communication in respect of any thereof) filed by the Borrower
or any Restricted Subsidiary with any securities exchange, with the Securities
and Exchange Commission or any successor agency, and (iv) all press releases
concerning material financial aspects of the Borrower or any Subsidiary of the
Borrower.
(b) Promptly upon becoming aware (i) that the holder(s) of any note(s) or
other evidence of indebtedness or other security of the Borrower, any Restricted
Subsidiary or Bermuda Corp. in excess of $250,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder, (ii) of any occurrence or non-occurrence
of any event which constitutes or which with the passage of time or giving of
notice or both could constitute a material breach by the Borrower, any
Restricted Subsidiary or Bermuda Corp. under any material agreement or
instrument other than this Agreement to which the Borrower, any Restricted
Subsidiary or Bermuda Corp. is a party or by which any of their Properties may
be bound, or (iii) of the occurrence of any event, circumstance or condition
which could reasonably be expected to cause a Material Adverse Change, a written
notice specifying the details thereof (or the
50
nature of any claimed default or event of default) and what action is being
taken or is proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and copies
of any notices received from the FCC, any applicable PUC or any other federal,
state or local regulatory agencies or any tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or noncompliance
with the Communications Act or any law, rule or regulation of any applicable
PUC, or might result in the payment of money by the Borrower, any Restricted
Subsidiary or Bermuda Corp. in an amount of $250,000 or more in the aggregate,
or otherwise cause a Material Adverse Change, or result in the loss or
suspension of any material License or any material contract;
(d) Promptly upon the knowledge of an Authorized Officer of receipt by the
Borrower, any Restricted Subsidiary or Bermuda Corp. from any governmental
agency, or any government, political subdivision or other entity, of any
material notice, correspondence, hearing, proceeding or order regarding or
affecting the Borrower, any Restricted Subsidiary, Bermuda Corp. or any of their
Properties or businesses not in the ordinary course of business, a copy of such
notice, correspondence, hearing, proceeding or order; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Borrower and the Subsidiaries of the
Borrower, as the Administrative Agent or any Lender may reasonably request.
7.05. Notice of Litigation, Default and Other Matters. Prompt notice of
the following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all proceedings and investigations by or before the
FCC, any applicable PUC, or any other governmental body, and all other actions
and proceedings in any court or before any arbitrator involving claims for
damages (including punitive damages) in excess of either $1,000,000 for any one
proceeding or investigation, or $5,000,000 in the aggregate for all such
proceedings and investigations (after deducting the amount with respect to the
Borrower, or any of its Subsidiaries is insured), against or in any other way
relating directly to the Borrower, any of its Subsidiaries, or any of their
properties, assets or businesses;
(b) Promptly upon the happening of any condition or event which constitutes
a Default or Event of Default, a written notice specifying the nature and period
of existence thereof and what action is being taken or is proposed to be taken
with respect thereto; and
(c) Any event which could cause a Material Adverse Change with respect to
the business, assets, liabilities, financial position, results of operations or
prospective business of the Borrower or any of its Subsidiaries.
7.06. ERISA Reporting Requirements.
51
(a) Promptly and in any event (i) within 30 days after the Borrower, or any
member of its Controlled Group knows or has reason to know that any ERISA Event
described in clause (a) of the definition of ERISA Event or any event described
in Section 4063(a) of ERISA with respect to any Plan of the Borrower or any
member of its Controlled Group has occurred, and (ii) within 10 days after the
Borrower or any member of its Controlled Group knows or has reason to know that
any other ERISA Event with respect to any Plan of the Borrower or any member of
its Controlled Group has occurred or a request for a minimum funding waiver
under Section 412 of the Code with respect to any Plan of the Borrower, or any
member of its Controlled Group, a written notice describing such event and
describing what action is being taken or is proposed to be taken with respect
thereto, together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its Controlled
Group of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof by
the Borrower or any member of its Controlled Group with the United States
Department of Labor, the Internal Revenue Service or the PBGC, copies of each
annual and other report (including Schedule B thereto) with respect to each
Plan;
(d) Promptly and in any event within 30 days after receipt thereof, a copy
of any notice, determination letter, ruling or opinion the Borrower or any
member of its Controlled Group receives from the PBGC, the United States
Department of Labor or the Internal Revenue Service with respect to any Plan;
(e) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group setting
forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(f) Notification within 30 days of any material increases in the benefits
of any existing Plan which is not a Multiemployer Plan, or the establishment of
any new Plans, or the commencement of contributions to any Plan to which the
Borrower, or any member of its Controlled Group was not previously contributing;
(g) Notification within three Business Days after the Borrower, or any
member of its Controlled Group knows or has reason to know that the Borrower, or
any such member of its Controlled Group has or intends to file a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA and a copy of such notice; and
52
(h) Promptly after receipt of written notice of commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower, or any member of its Controlled Group with
respect to any Plan.
ARTICLE VIII. NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment or any Letter of Credit is outstanding (whether or not the conditions
to borrowing have been or can be fulfilled):
8.01. Financial Covenants.
(a) Total Leverage Ratio. At all times until the Obligations have
been repaid in full and the Commitment has been terminated, the Borrower
shall not permit the Total Leverage Ratio to be more than 3.00 to 1.00.
(b) Interest Coverage Ratio. At all times until the Obligations have
been repaid in full and the Commitment has been terminated, the Borrower
shall not permit the Interest Coverage Ratio to be less than 2.50 to 1.00.
8.02. Debt for Borrowed Money. The Borrower shall not, and shall
not permit any Restricted Subsidiary or Bermuda Corp. to, create, assume, incur
or otherwise become or remain obligated in respect of, or permit to be
outstanding, or suffer to exist any Debt for Borrowed Money, except:
(a) with respect to the Borrower and the Restricted Subsidiaries, Debt for
Borrowed Money under the Loan Papers;
(b) with respect to the Borrower, its Restricted Subsidiaries and Bermuda
Corp., Debt for Borrowed Money in existence on the Closing Date described on
Schedule 8.02 hereto and not otherwise permitted pursuant to the terms of this
-------------
Section 8.02, in each case only in the principal amounts and as such Debt for
Borrowed Money exists as of the Closing Date;
(c) provided that no Default or Event of Default exists or would result
from the incurrence thereof, with respect to the Borrower and the wholly owned
Restricted Subsidiaries, Debt owed to each other;
(d) so long as there exists no Default or Event of Default both before and
after giving effect thereto, Debt of the Borrower in respect to Interest Rate
Protection Agreements;
(e) so long as there exists no Default or Event of Default both before and
after giving effect thereto, Debt of the Borrower in respect of Permitted
Refinancing Indebtedness;
53
(f) so long as there exists no Default or Event of Default both before and
after giving effect to the incurrence thereof, secured Debt (including Capital
Leases) of the Borrower in an amount in the aggregate over the term of this
Agreement not to exceed an amount equal to $10,000,000; and
(g) so long as there exists no Default or Event of Default both before and
after giving effect to the incurrence thereof, and so long as the Borrower
delivers to the Administrative Agent and the Lenders a pro forma Compliance
Certificate giving effect to the incurrence of any Subordinated Indebtedness and
demonstrating compliance with the terms of this Agreement and the Loan Papers
throughout the term of the Loan, unsecured Subordinated Indebtedness of the
Borrower in an amount in the aggregate over the term of this Agreement not to
exceed an amount equal to $150,000,000 with such other terms and conditions as
agreed to by the Administrative Agent and the Borrower.
8.03. Liens. The Borrower shall not, and shall not permit any
Restricted Subsidiary or Bermuda Corp. to, create, assume, incur, permit or
suffer to exist, directly or indirectly, any Lien on any of its assets or
Properties, whether now owned or hereafter acquired, except (a) Permitted Liens,
and (b) so long as no Default or Event of Default exists or would result from
the incurrence of such Lien, Liens securing Debt permitted to be incurred by
Section 8.02(f) hereof (and any Permitted Refinancing Indebtedness of such
Debt), but only so long as such Debt secured thereby shall not be increased and
the Liens shall cover Properties of the Borrower and purchased with the proceeds
of such Debt and shall not cover additional assets of the Borrower, any such
Restricted Subsidiary or Bermuda Corp. The Borrower shall not, and shall not
permit any Restricted Subsidiary of the Borrower or Bermuda Corp. to, agree with
any other Person that it shall not create, assume, incur, permit or suffer to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its assets or Properties.
8.04. Investments. The Borrower shall not, and shall not permit any
Restricted Subsidiary or Bermuda Corp. to, make any Investment, except that the
Borrower may purchase or otherwise acquire and own:
(a) Marketable, direct obligations of, or guaranteed by, the United States
of America and maturing within 365 days of the date of purchase;
(b) Commercial paper issued by U.S. corporations that have a rating of A-
1/P-1 or better by Standard & Poor's Ratings Group, a Division of XxXxxx-Xxxx,
Inc. or Xxxxx'x Investors Service, Inc.;
(c) Certificates of deposit of domestic banks maturing within 365 days of
the date of purchase, which banks' debt obligations have one of the two highest
ratings obtainable from Standard & Poor's Ratings Group, a Division of XxXxxx-
Xxxx, Inc. or Xxxxx'x Investors Service, Inc.;
(d) Securities issued by U.S. corporations that have one of the two highest
ratings obtainable from Standard & Poor's Ratings Group, a Division of XxXxxx-
Xxxx, Inc. or Xxxxx'x Investors Service, Inc.;
54
(e) Investments in acquisitions permitted by Section 8.05(b) hereof, so
long as each new Subsidiary of the Borrower (i) is wholly owned and subject to
the provisions hereof as a Restricted Subsidiary and (ii) immediately becomes a
party to an Unlimited Guaranty guaranteeing the Obligations;
(f) Accounts receivable that arise in the ordinary course of business and
are payable on standard terms;
(g) Investments not constituting existing Investments in Subsidiaries that
are in existence on the Closing Date and described on Schedule 8.04 hereto;
-------------
(h) so long as there exists no Default or Event of Default both at the time
of such Investment and immediately after giving effect thereto, Investments in
Unrestricted Subsidiaries and Bermuda Corp. which, in the aggregate, over the
term of this Agreement, do not exceed $10,000,000 for all such Investments.
8.05. Liquidation, Disposition or Acquisition of Assets, Merger, New
Subsidiaries. The Borrower shall not, and shall not permit any Restricted
Subsidiary or Bermuda Corp. to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution)
or otherwise wind up; or sell, lease, abandon, transfer or otherwise dispose of
all or any part of its assets, Properties or business other than (i) so long as
the Borrower complies with Section 2.05 and Section 2.11 hereof, Permitted Asset
Sales, (ii) so long as there exists no Default or Event of Default both before
and after giving effect to any such sale and the Borrower complies with Section
2.05 and Section 2.11 hereof, (A) and after delivery of prior written notice to
the Administrative Agent, any Restricted Subsidiary of the Borrower can be
dissolved so long as a wholly owned Restricted Subsidiary of the Borrower that
has executed an Unlimited Guaranty or the Borrower acquires all such Restricted
Subsidiary's assets, and (B) after delivery of prior written notice to the
Administrative Agent, any wholly owned direct or indirect Restricted Subsidiary
of the Borrower that has executed an Unlimited Guaranty of the Obligations
hereunder may sell or transfer assets, Property or business to the Borrower or
any other wholly owned indirect or indirect Restricted Subsidiary of the
Borrower that has executed an Unlimited Guaranty of the Obligations hereunder.
(b) acquire any assets, Property or business of any other Person, or
participate in any joint venture, except (i) assets and Property acquired in
the ordinary course of business, (ii) provided that the Borrower complies
fully with Sections 6.12, 6.14, 8.04(e) and 8.05(d) hereof, Permitted
Acquisitions may be consummated and (iii) after delivery of prior written
notice to the Administrative Agent, the Borrower or any wholly owned direct or
indirect Restricted Subsidiary of the Borrower that has executed an Unlimited
Guaranty of the Obligations hereunder may acquire assets, Property or business
from any other wholly owned direct or indirect Restricted Subsidiary of the
Borrower that has executed an Unlimited Guaranty of the Obligations hereunder;
(c) enter into any merger or consolidation, except that, so long as there
exists no Default or Event of Default and none is caused thereby (i) after
delivery of prior written notice to the Administrative Agent, any wholly owned
Restricted Subsidiary of the Borrower can merge or consolidate into any other
wholly owned Restricted Subsidiary of the Borrower, or so long as such
55
transaction is in connection with a Permitted Acquisition, into another Person,
so long as a wholly owned Restricted Subsidiary of the Borrower which has
executed an Unlimited Guaranty is a survivor, or into the Borrower so long as
the Borrower is the surviving corporation or (ii) after delivery of prior
written notice to the Administrative Agent, another Person may be merged with or
into the Borrower or any wholly owned Restricted Subsidiary of the Borrower that
has executed an Unlimited Guaranty in connection with a Permitted Acquisition,
so long as the Borrower or such wholly owned Restricted Subsidiary is the
surviving corporation; and
(d) create or acquire any Subsidiary, except (a) as permitted by Section
8.04(e) hereof and Section 8.05(b) above, and (b) so long as (i) there exists no
Default or Event of Default both before and after giving effect to the creation
of any new wholly owned Restricted Subsidiary and the transfer of any assets to
such wholly owned Restricted Subsidiary and (ii) immediately upon the creation
of any new wholly owned Restricted Subsidiary, such Restricted Subsidiary shall
become a signatory to an Unlimited Guaranty of the Obligations delivered to the
Administrative Agent, the Borrower may create a new wholly owned Restricted
Subsidiary of the Borrower. Nothing in this Section 8.05(d) shall permit the
Borrower or any Restricted Subsidiary of the Borrower to create any Subsidiary
that is not wholly owned, other than director's qualifying shares not to exceed
1% of the Capital Stock of such Subsidiary.
8.06. Guaranties; Contingent Liabilities. Other than as permitted
pursuant to Section 8.02 hereunder, the Borrower shall not, and shall not permit
------------
any Restricted Subsidiary or Bermuda Corp. to, at any time make or issue any
Guaranty, or assume, be obligated with respect to, or permit to be outstanding
any Contingent Liabilities, except pursuant to the Loan Papers.
8.07. Restricted Payments. The Borrower shall not, and shall not permit
any Restricted Subsidiary or Bermuda Corp. to, directly or indirectly declare,
make or pay any Restricted Payment; provided, however
(a) any wholly owned Subsidiary of the Borrower may declare, make
and pay Restricted Payments to the Borrower or any other wholly owned
Restricted Subsidiary that has executed an Unlimited Guaranty of the
Obligations hereunder, and
(b) so long as there exists no Default or Event of Default both
before and immediately after giving effect to any such Restricted Payment,
the Borrower may make loans and advances to employees of the Borrower and
its Subsidiaries which, in the aggregate over the term of this Agreement,
do not exceed $100,000.
8.08. Affiliate Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time engage in any transaction with an
Affiliate, nor make an assignment or other transfer of any of its assets or
Properties to any Affiliate, on terms materially less advantageous to the
Borrower or any such Subsidiary than would be the case if such transaction had
been effected with a non-Affiliate, except those transactions described on
Schedule 8.08 hereof and to the extent applicable, Schedule 8.16 hereof.
------------- -------------
56
8.09. Compliance with ERISA. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, or permit any member
of its Controlled Group to directly or indirectly, (a) terminate any Plan so as
to result in any material (in the opinion of the Majority Lenders) liability to
the Borrower or any member of its Controlled Group, (b) permit to exist any
ERISA Event, or any other event or condition which presents the risk of
liability of the Borrower or any member of its Controlled Group, (c) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan so as to result in any liability to the Borrower or
any member of its Controlled Group, (d) enter into any new Plan or modify any
existing Plan so as to increase its obligations thereunder except in the
ordinary course of business consistent with past practice which could result in
any liability to the Borrower, or any member of its Controlled Group, or (e)
permit the present value of all benefit liabilities, as defined in Title IV of
ERISA, under each Plan of the Borrower, or any member of its Controlled Group
(using the actuarial assumptions utilized by the PBGC upon termination of a
plan) to exceed the fair market value of Plan assets allocable to such benefits
all determined as of the most recent valuation date for each such Plan.
8.10. Capital Stock. The Borrower shall not, and shall not permit any
Restricted Subsidiary or Bermuda Corp. to (a) make or permit any transfer,
assignment, distribution, mortgage, pledge or gift of any shares of Capital
Stock, except (i) to the Borrower or another wholly owned direct or indirect
Restricted Subsidiary of the Borrower that has executed an Unlimited Guaranty of
the Obligations, and (ii) for asset sales permitted by Section 8.05(a) hereof
and (b) issue any Capital Stock.
8.11. Sale and Leaseback. The Borrower shall not, and shall not permit
any Restricted Subsidiary or Bermuda Corp. to, enter into any arrangement
whereby it sells or transfers any of its assets, and thereafter rents or leases
such assets.
8.12. Sale or Discount of Receivables. The Borrower shall not, and
shall not permit any Restricted Subsidiary or Bermuda Corp. to, directly or
indirectly sell, with or without recourse, for discount or otherwise, any notes
or accounts receivable.
8.13. Limitation on Restrictive Agreements. Except as otherwise
permitted in connection with the issuance of Debt under Section 8.02 hereof, the
------------
Borrower shall not, and shall not permit any Restricted Subsidiary or Bermuda
Corp. to, enter into any indenture, agreement, instrument, financing document or
other arrangement which, directly or indirectly, prohibits or restrains, or has
the effect of prohibiting or restraining, or imposes materially adverse
conditions upon: (a) the incurrence of indebtedness, (b) the granting of Liens,
(c) the making or granting of Guarantees, (d) the payment of dividends or
Distributions, (e) the purchase, redemption or retirement of any Capital Stock
of the Borrower or any Subsidiary of the Borrower, (f) the making of loans or
advances, (g) transfers or sales of Property or assets (including Capital Stock)
by the Borrower, or any of the Restricted Subsidiaries, (h) the making of
Investments, (h) any change of control or management, (i) the making of changes
or amendments to this Agreement or any other Loan Paper, or (j) the acceptance
of a waiver or consent with respect to any term or provision of this Agreement
or any other Loan Paper.
8.14. Amendment of Material Agreements. The Borrower shall not, and
shall not permit any Restricted Subsidiary or Bermuda Corp. to, amend, waive or
consent to any deviation from any
57
provision of any documentation or agreements of the (i) any material agreement
relating to the Borrower or any such Restricted Subsidiary and (ii) in any
material respect, articles of incorporation, by-laws and other organizational
documents of the Borrower, the Restricted Subsidiaries and Bermuda Corp.
8.15. Name Changes. The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its name without notifying Administrative
Agent 30 calendar day prior to such name change.
8.16. Unrestricted Subsidiaries. Except as specifically permitted by the
terms of this Agreement or listed on Schedule 8.16 hereto, the Borrower shall
-------------
not, and shall not permit any Restricted Subsidiary and Bermuda Corp. to,
contribute any equity, make any loan, advance or other investment in, or
otherwise conduct any business with, any Unrestricted Subsidiary and Bermuda
Corp.
ARTICLE IX. EVENTS OF DEFAULT
9.01. Events of Default. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) The Borrower shall fail to pay any (i) principal payable under any Loan
Paper on the date due; or (ii) any interest, fees or other amounts payable
within business three days of the date due;
(b) Any representation or warranty made or deemed made by any Obligor (or
any of its officers or representatives) under or in connection with any Loan
Paper shall prove to have been incorrect or misleading in any material respect
when made or deemed made;
(c) The Borrower shall fail to perform or observe any term or covenant
contained in Section 7.05 hereof or in Article VIII hereof;
(d) Any Obligor shall fail to perform or observe any other term or covenant
contained in this Agreement or any other Loan Paper, other than those described
in Sections 9.01(a), (b) and (c) above, and such failure shall not be remedied
within thirty days following the earlier of the Borrower's knowledge of such
failure or notice from any Lender of the occurrence of such failure;
(e) Any of the following shall occur: (i) Any Loan Paper or material
provision thereof shall, for any reason, not be valid and binding on the Obligor
signatory thereto, or not be in full force and effect, or shall be declared to
be null and void; or (ii) the validity or enforceability of any Loan Paper shall
be contested by any Obligor, any Unrestricted Subsidiary or any Affiliate of the
Borrower and its Subsidiaries; or (iii) any Obligor shall deny in writing that
it has any or further liability or obligation under its respective Loan Papers;
or (iv) any default or breach under any provision of any Loan Papers shall
continue after the applicable grace period, if any, specified in such Loan
Paper;
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(f) Any of the following shall occur: (i) the Borrower or any of its
Subsidiaries shall make an assignment for the benefit of creditors or be unable
to pay its debts generally as they become due; (ii) the Borrower or any of its
Subsidiaries shall petition or apply to any Tribunal for the appointment of a
trustee, receiver, or liquidator of it, or of any substantial part of its
assets, or shall commence any proceedings relating to the Borrower or any of its
Subsidiaries under any Debtor Relief Laws; (iii) any such petition or
application shall be filed, or any such proceedings shall be commenced, against
the Borrower or any of its Subsidiaries, or an order, judgment or decree shall
be entered appointing any such trustee, receiver, or liquidator, or approving
the petition in any such proceedings, and such petition or application shall be
consented to or uncontested by the Borrower or such Subsidiary, or if contested
by the Borrower or such Subsidiary, shall not be dismissed within 60 days
following the filing of such petition or application; (iv) any final order,
judgment, or decree shall be entered in any proceedings against the Borrower or
any of its Subsidiaries decreeing its dissolution; or (v) any final order,
judgment, or decree shall be entered in any proceedings against the Borrower or
any of its Subsidiaries decreeing its split-up which requires the divestiture of
a substantial part of its assets;
(g) Any of the following shall occur: (i) The Borrower, or any Subsidiary
of the Borrower shall fail to pay any Debt (other than Debt under the Loan
Papers) in an aggregate amount of $1,000,000 or more when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or (ii) the
Borrower or any Subsidiary of the Borrower shall fail to perform or observe any
term or covenant contained in any agreement or instrument relating to any such
Debt, when required to be performed or observed, and such failure shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, and can result in acceleration of the maturity of such Debt; or
(iii) any such Debt shall be declared to be due and payable, or required to be
prepaid, mandatorily redeemed or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or (iv)
there shall exist a breach by any the Borrower or any of its Subsidiaries under
one or more material contracts the effect of which could reasonably be expected
to cause a Material Adverse Change;
(h) Any Obligor shall have any final judgment(s) outstanding against it,
and such judgment(s) shall remain unstayed, in effect, and unpaid for the period
of time after which the judgment holder may cause the creation of Liens against
or seizure of any of its Property;
(i) Any of the following shall have occurred: (i) Any ERISA Event shall
have occurred with respect to a Plan of the Borrower or any Subsidiary of the
Borrower, and the sum of the Insufficiency of such Plan and liabilities relating
thereto is equal to or greater than $1,000,000 or (ii) the Borrower, the
Subsidiaries of the Borrower or any ERISA Affiliate of any of them shall have
committed a failure described in Section 302(f)(l) of ERISA, and the amount
determined under Section 302(f)(3) of ERISA is equal to or greater than
$1,000,000;
(j) The Borrower, or any ERISA Affiliate of the Borrower shall have been
notified by the sponsor of a Multiemployer Plan that (A) it has incurred
Withdrawal Liability to such Plan in an amount that exceeds $1,000,000 or
requires payments exceeding $1,000,000 per annum, or (B) such Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a
59
result thereof the aggregate annual contributions to all Multiemployer Plans in
reorganization or being terminated is increased over the amounts contributed to
such Plans for the preceding Plan year by an amount exceeding $1,000,000;
(k) Any of the Borrower or any of its Subsidiaries shall be required under
any Environmental Law (i) to implement any remedial, neutralization, or
stabilization process or program, the cost of which could reasonably be expected
to cause a Material Adverse Change, or (ii) to pay any penalty, fine, or damages
in an aggregate amount which could reasonably be expected to cause a Material
Adverse Change;
(l) Any of the following shall have occurred: (i) Any property or assets
(whether leased or owned), or the operations conducted thereon by any of the
Borrower or any of its Subsidiaries, or any current or prior owner or operator
thereof (in the case of real Property), shall violate or have violated any
applicable Environmental Law, if such violation could reasonably be expected to
cause a Material Adverse Change; or (ii) the Borrower or such Subsidiary shall
not obtain or maintain any License required to be obtained or filed under any
Environmental Law in connection with the use of such Property and assets,
including without limitation past or present treatment, storage, disposal, or
release of Hazardous Materials into the environment, if the failure to obtain or
maintain the same could reasonably be expected to cause a Material Adverse
Change;
(m) Any of the following shall have occurred: (i) A final non-appealable
order is issued by any Tribunal, including, but not limited to, the FCC, any
applicable PUC, or the United States Justice Department, requiring any Obligor
to divest a substantial portion of its assets pursuant to any antitrust,
restraint of trade, unfair competition, industry regulation, or similar Laws, or
(ii) any Tribunal shall condemn, seize, or otherwise appropriate, or take
custody or control of all or any substantial portion of the assets of the
Borrower or any of its Subsidiaries;
(n) Any of the following shall have occurred if the effect thereof could be
reasonably expected to cause a Material Adverse Change: (i) Any License whether
presently existing or hereafter granted to or obtained by the Borrower or any of
its Subsidiaries shall expire without renewal or be suspended or revoked, or
(ii) the Borrower or any of its Subsidiaries shall become subject to any
injunction or other order affecting or which may affect the Borrower's or any of
its Subsidiary's present or proposed operations under any such License;
(o) Any civil action, suit or proceeding shall be commenced against the
Borrower, any of its Subsidiaries under any federal or state racketeering
statute (including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970)("RICO") and such suit shall be adversely determined by
a court of applicable jurisdiction, and which is either non-appealable or which
the Borrower or such Subsidiary has elected not to appeal; or any criminal
action or proceeding shall be commenced against the Borrower, or any of its
Subsidiaries under any federal or state racketeering statute (including, without
limitation, RICO);
(p) There shall occur a Change of Control;
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(q) Any Litigation commenced against the Borrower or any of its
Subsidiaries is adversely determined by a court of applicable jurisdiction,
which such Litigation is either non-appealable or which such Obligor has elected
not to appeal, and in either case, is reasonably expected to cause a Material
Adverse Change;
(r) The Borrower or any Subsidiary of the Borrower shall fail to comply in
any respect with the Communications Act, or any rule or regulation promulgated
by the FCC or any applicable PUC, and such failure could reasonably be expected
to cause a Material Adverse Change; or any License or authorization constituting
authorizations, permits or licenses of the Borrower or any of its Subsidiaries
material to the operation of the business of the Borrower and any of its
Subsidiaries, has expired or shall expire without having been renewed or shall
be canceled or impaired, and such expiration, cancellation or impairment could
reasonably be expected to cause a Material Adverse Change;
(s) The Borrower or any of its Subsidiaries shall fail to operate its
business for any period of time which, in the aggregate, could reasonably be
expected to cause a Material Adverse Change;
(t) Any Substantial Portion shall not, for any reason (including, without
limitation, loss of FCC License, network or otherwise) be operating for a period
in excess of 30 days. For purposes of this Section 9.01(t), "Substantial
Portion" means any portion of the assets or Properties of the Borrower, the
Restricted Subsidiaries and Bermuda Corp. that has generated, for the most
recently completed twelve month period, in excess of five percent of the
Operating Cash Flow;
(u) Any of the following shall have occurred:
(i) Any Loan Paper shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority Lien in
the Collateral purported to be covered thereby (except as permitted by the
terms of this Agreement or consented to by the Lenders); or
(ii) Less than 66% of the Capital Stock of Bermuda Corp. shall be
subject to a first priority perfected pledge to the Administrative Agent to
secure the Obligations; or
(v) Any of the Borrower or any of its Subsidiaries shall fail to be Year
2000 Compliant.
9.02. Remedies upon Default. If an Event of Default described in
Section 9.01(f) shall occur, the aggregate unpaid principal balance of and
accrued interest on all Advances shall, to the extent permitted by applicable
Law, thereupon become due and payable concurrently therewith, without any action
by Administrative Agent or any Lender, and without diligence, presentment,
demand, protest, notice of protest or intent to accelerate, or notice of any
other kind, all of which are hereby expressly waived. Subject to the foregoing
sentence, if any Event of Default shall occur and be continuing, Administrative
Agent may at its election, do any one or more of the following:
(a) Declare the entire unpaid balance of all Obligations immediately due
and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice of
61
protest or intent to accelerate, or notice of any other kind (except notices
specifically provided for under Section 9.01 hereof), all of which are hereby
expressly waived (except to the extent waiver of the foregoing is not permitted
by applicable Law);
(b) Terminate the Revolver Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Demand (and the Borrower shall pay to Administrative Agent) immediately
upon demand and in immediately available funds, the amount equal to the
aggregate amount of the Letters of Credit then outstanding, irrespective of
whether such Letters of Credit have been drawn upon, all as set forth and in
accordance with the terms of provisions of Article III hereof. The
Administrative Agent shall promptly advise the Borrower of any such declaration
or demand but failure to do so shall not impair the effect of such declaration
or demand; and
(e) Exercise any Rights afforded under any Loan Papers, by Law, including
but not limited to the UCC, at equity, or otherwise.
9.03. Cumulative Rights. All Rights available to Administrative Agent
and Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Agent or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers.
9.04. Waivers. The acceptance by Administrative Agent or any Lender at
any time and from time to time of partial payment of any amount owing under any
Loan Papers shall not be deemed to be a waiver of any Default or Event of
Default then existing. No waiver by Administrative Agent or any Lender of any
Default or Event of Default shall be deemed to be a waiver of any Default or
Event of Default other than such Default or Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any Right under the
Loan Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
under the Loan Papers or otherwise.
9.05. Performance by Administrative Agent or any Lender. Should any
covenant of any Obligor fail to be performed in accordance with the terms of the
Loan Papers, Administrative Agent may, at its option, perform or attempt to
perform such covenant on behalf of such Obligor. Notwithstanding the foregoing,
it is expressly understood that neither Administrative Agent nor any Lender
assumes, and shall not ever have, except by express written consent of
Administrative Agent or such Lender, any liability or responsibility for the
performance of any duties or covenants of any Obligor.
9.06. Expenditures. The Borrower shall reimburse Administrative Agent
and each Lender for any reasonable sums spent by it in connection with the
exercise of any Right under Section 9.05 hereof. Such sums shall bear interest
at the lesser of (a) the Base Rate (whether or not in effect), plus 2.00% per
annum and (b) the Highest Lawful Rate, from five days after the date any Lender
makes
62
demand to the Borrower for reimbursement of such amount until the date of
repayment by the Borrower.
9.07. Control. None of the covenants or other provisions contained in
this Agreement shall, or shall be deemed to, give Administrative Agent or any
Lender any Rights to exercise control over the affairs and/or management of any
Obligor, the power of Administrative Agent and each Lender being limited to the
Rights to exercise the remedies provided in this Article; provided, however,
-------- -------
that if Administrative Agent or any Lender becomes the owner of any partnership,
stock or other equity interest in any Person, whether through foreclosure or
otherwise, it shall be entitled to exercise such legal Rights as it may have by
being an owner of such stock or other equity interest in such Person.
ARTICLE X. THE ADMINISTRATIVE AGENT
10.01. Authorization and Action. Each Lender hereby appoints and
authorizes Administrative Agent to take such action as Administrative Agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to the Administrative Agent by the terms of the Loan
Papers, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Papers (including without limitation enforcement or collection of the Notes),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 11.01 hereof), and
such instructions shall be binding upon all Lenders; provided, however, that
-------- -------
Administrative Agent shall not be required to take any action which exposes
Administrative Agent to personal liability or which is contrary to any Loan
Papers or applicable Law. Administrative Agent agrees to give to each Lender
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement, and to distribute to each applicable Lender in like funds all amounts
delivered to Administrative Agent by the Borrower for the individual account of
any Lender pro rata in accordance with the Applicable Specified Percentage, as
set forth in this Agreement. Functions of the Administrative Agent are
administerial in nature and in no event shall the Administrative Agent have a
fiduciary or trustee relationship in respect of any Lender by reason of this
Agreement or any other Loan Paper.
10.02. Administrative Agent's Reliance, Etc. Neither Administrative
Agent, nor any of its directors, officers, agents, employees, or representatives
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any other Loan Paper, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent (a) may treat the payee of any
Note as the holder thereof until Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower, any of the Restricted Subsidiaries and Bermuda Corp.),
independent public accountants, and other experts selected by it, and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants, or experts; (c) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties, or representations made in or in
connection with this Agreement or any
63
other Loan Papers; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants, or conditions of
this Agreement or any other Loan Papers on the part of the Borrower, the
Restricted Subsidiaries and Bermuda Corp. or to inspect the Property (including
the books and records) of the Borrower or its Subsidiaries; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, any other
Loan Papers, or any other instrument or document furnished pursuant hereto; and
(f) shall incur no liability under or in respect of this Agreement or any other
Loan Papers by acting upon any notice, consent, certificate, or other instrument
or writing believed by it to be genuine and signed or sent by the proper party
or parties.
10.03. Bank of America, NT&SA and Affiliates. With respect to its
Revolver Commitment, its Advances, and any Loan Papers, Bank of America, NT&SA
has the same Rights under this Agreement as any other Lender and may exercise
the same as though it were not Administrative Agent. Bank of America, NT&SA and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, any Obligor,
any Affiliate thereof, and any Person who may do business therewith, all as if
Bank of America, NT&SA were not Administrative Agent and without any duty to
account therefor to any Lender.
10.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 5.01(j),
Section 7.01 and Section 7.02 hereof and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Papers.
10.05. Indemnification by Lenders. Lenders shall indemnify
Administrative Agent, pro rata in accordance with each Lender's Total Specified
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Agent in any way relating to or arising out of
any Loan Papers or any action taken or omitted by Administrative Agent
thereunder, including any negligence of Administrative Agent; provided, however,
-------- -------
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements resulting from Administrative Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, Lenders shall reimburse
Administrative Agent, pro rata in accordance with each Lender's Total Specified
Percentage, promptly upon demand for any out-of-pocket expenses (including
reasonable attorneys' fees) incurred by Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment,
or enforcement (whether through negotiation, legal proceedings or otherwise) of,
or legal and other advice in respect of rights or responsibilities under, the
Loan Papers. The indemnity provided in this Section 10.05 shall survive the
termination of this Agreement.
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10.06. Successor Administrative Agent. Administrative Agent may resign
at any time by giving written notice thereof to Lenders and the Borrower, and
may be removed at any time with or without cause by the action of all Lenders
(other than Administrative Agent, if it is a Lender). Upon any such resignation
or removal, Majority Lenders shall have the right to appoint a successor
Administrative Agent with the prior written consent of the Borrower (which shall
not be unreasonably withheld), provided that, if there exists an Event of
Default that is continuing, no consent of the Borrower shall be required. If no
successor Administrative Agent shall have been so appointed and shall have
accepted such appointment within thirty days after the retiring Administrative
Agent's giving of notice of resignation, then the retiring Administrative Agent
may, on behalf of Lenders, appoint a successor Administrative Agent, which shall
be a commercial bank organized under the Laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the Rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan Papers,
provided that if the retiring or removed Administrative Agent is unable to
appoint a successor Administrative Agent, Administrative Agent shall, after the
expiration of a sixty day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE XI. MISCELLANEOUS
11.01. Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Papers, nor consent to any departure by the
Borrower or any Obligor therefrom, shall be effective unless the same shall be
in writing and signed by the Borrower and the Administrative Agent with the
consent of the Majority Lenders, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver, or consent shall (and the
-------- -------
result of action or failure to take action shall not) unless in writing and
signed by all of Lenders and Administrative Agent, (a) increase the Revolver
Commitment, (b) reduce any principal, interest, fees, or other amounts payable
hereunder, or waive or result in the waiver of any Event of Default under
Section 9.01(a) hereof, (c) postpone any date fixed for any payment of
principal, interest, fees, or other amounts payable hereunder, (d) release or
impair any collateral or guaranties securing any Obligor's obligations
hereunder, other than releases contemplated hereby and by the other Loan Papers,
(e) change the meaning of "Total Specified Percentage", "Revolver Specified
Percentage" or the number of Lenders required to take any action hereunder,
change the definitions of "Commitment", "Revolver Commitment", "Maturity Date",
"Majority Lenders", or "Letter of Credit Commitment", or (f) amend this Section
11.01. No amendment, waiver, or consent shall affect the Rights or duties of
Administrative Agent under any Loan Papers, unless it is in writing and signed
by Administrative Agent in addition to the requisite number of Lenders.
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11.02. Notices.
(a) Manner of Delivery. All notices communications and other materials to
be given or delivered under the Loan Papers shall, except in those cases where
giving notice by telephone is expressly permitted, be given or delivered in
writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or the Borrower has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
(i) If to the Borrower, any Restricted Subsidiary or Bermuda Corp.:
Pacific Gateway Exchange, Inc.
000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxx Xxxx
Chief Financial Officer
With copies to (which is not required for effective delivery as set
forth above):
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: J. Xxxxxx Xxxxxx, Esq.
(ii) If to Administrative Agent:
Bank of America, NT&SA
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
Vice President
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With a copy to (which is not required for effective delivery as set
forth above):
Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx Xxxxxxx
(iii) If to any Lender, to its address shown opposite its signature block
on the signature pages hereto, or on any Assignment and Acceptance, or in any
other notice to the Borrower and the Administrative Agent,
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
(c) Effectiveness. Each notice, communication and any material to be
given or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number, (iii) if sent by hand
delivery or overnight courier, when left at the address of the addressee
addressed as above provided, and (iv) if given by telephone, when communicated
to the individual or any member of the department specified as the individual or
department to whose attention notices, communications and materials are to be
given or delivered except that notices of a change of address, telecopier or
telephone number or individual or department to whose attention notices,
communications and materials are to be given or delivered shall not be effective
until received; provided, however, that notices to Administrative Agent pursuant
-------- -------
to Article II shall be effective when received. The Borrower agrees that
Administrative Agent shall have no duty or obligation to verify or otherwise
confirm telephonic notices given pursuant to Article II, and agrees to indemnify
and hold harmless Administrative Agent and Lenders for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, and expenses resulting, directly or indirectly, from acting upon any such
notice.
11.03. Parties in Interest. All covenants and agreements contained in
this Agreement and all other Loan Papers shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto. Each Lender may
from time to time assign or transfer its interests hereunder pursuant to Section
11.04 hereof. The Borrower may not assign or transfer its Rights or obligations
hereunder without the prior written consent of Administrative Agent.
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11.04. Assignments and Participations.
(a) Each Lender (an "Assignor") may assign its Rights and obligations as a
Lender under the Loan Papers to one or more transferees pursuant to an
Assignment and Acceptance, so long as (i) each assignment shall be of a
constant, and not a varying percentage of all Rights and obligations thereunder,
(ii) each Assignor shall obtain in each case the prior written consent of
Administrative Agent and the Borrower, in each case such consent of the Borrower
not to be unreasonably withheld or delayed, provided that, in the event there
exists an Event of Default that is continuing, no consent of the Borrower shall
be required to make an assignment, (iii) each Assignor shall in each case pay a
$3,500 processing fee to Administrative Agent and (iv) no such assignment is for
an amount less than $5,000,000 and in increments of $1,000,000 (and, if such
assignment is a partial assignment, no Lender shall hold less than $5,000,000
immediately after giving effect to any assignment). Assignments and other
transfers (except participations) with respect to each Lender's participation in
a given Letter of Credit may only be made with the prior written consent of the
Administrative Agent. Within five Business Days after Administrative Agent
receives notice of any such assignment, the Borrower shall execute and deliver
to Administrative Agent, in exchange for the Notes issued to Assignor, new Notes
to the order of such Assignor and its assignee in amounts equal to their
respective Applicable Specified Percentages of the Revolver Commitment. Such
new Notes shall be dated the effective date of the assignment. It is
specifically acknowledged and agreed that on and after the effective date of
each assignment, the assignee shall be a party hereto and shall have the Rights
and obligations of a Lender under the Loan Papers.
(b) Each Lender may sell participations to one or more Persons in all or any
of its Rights and obligations under the Loan Papers; provided, however, that (i)
-------- -------
such Lender's obligations under the Loan Papers shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 11.01(a), (b), (c) and (d) hereof, (v) Obligors, the Administrative
Agent, and other Lenders shall continue to deal solely and directly with such
Lender in connection with their respective Rights and obligations under the Loan
Papers and (vi) no such participation is for an amount less than $5,000,000.
(c) Any Lender may, in connection with any assignment or participation, or
proposed assignment or participation, disclose to the assignee or participant,
or proposed assignee or participant, any information relating to the Borrower
and its Subsidiaries furnished to such Lender by or on behalf of the Borrower
and its Subsidiaries.
(d) Notwithstanding any other provision set forth in this Agreement, (i) any
Lender may at any time create a security interest in all or any portion of its
Rights under this Agreement (including, without limitation, the Advances owing
to it and the Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System, (ii) no participant of any Lender may further assign or participate any
of its interest in the Loan Papers to any Person (except as may be required by
Law or a Tribunal having authority over such participant), and (iii) no Lender
(other than Bank of America, NT&SA) may assign any of
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its interest in the Loan Papers to any Person (except as may be required by Law
or a Tribunal having authority over Bank of America, NT&SA).
11.05. Sharing of Payments. If, after and during the continuance of any
Event of Default, any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any Right of set-off, or otherwise) on
account of its Advances in excess of its pro rata share of payments made by the
Borrower in accordance with such Lender's Total Specified Percentage, such
Lender shall forthwith purchase participations in Advances made by the other
Lenders as shall be necessary to share the excess payment pro rata in accordance
with each Lender's Total Specified Percentage with each of them; provided,
--------
however, that if any of such excess payment is thereafter recovered from the
-------
purchasing Lender, its purchase from each Lender shall be rescinded and each
Lender shall repay the purchase price to the extent of such recovery together
with a pro rata share of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 11.05 may, to the fullest extent permitted by Law,
exercise all its Rights of payment (including the Right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
11.06. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized (after prior written
noticed to the Administrative Agent) at any time and from time to time, to the
fullest extent permitted by Law, to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or any of its Subsidiaries against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the other Loan Papers, whether or not Administrative Agent or any Lender shall
have made any demand under this Agreement or the other Loan Papers, and even if
such obligations are unmatured. Each Lender shall promptly notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
Rights of each Lender under this Section 11.06 are in addition to other Rights
(including, without limitation, other Rights of set-off) which such Lender may
have.
11.07. Costs, Expenses, and Taxes.
(a) Notwithstanding anything to the contrary in the Loan Papers, the
Borrower agrees to pay on demand (i) all costs and expenses of Administrative
Agent in connection with the preparation and negotiation of all Loan Papers,
including without limitation the reasonable fees and out-of-pocket expenses of
Special Counsel, FCC counsel, PUC counsel and local counsel, as appropriate,
(ii) all costs and expenses (including reasonable attorneys' fees and expenses)
of Administrative Agent in connection with any interpretation, grant and
perfection of any Lien, modification, amendment, waiver, release of any Loan
Papers, restructuring or work-out and (iii) all costs and expenses (including
reasonable attorneys' fees and expenses) of Administrative Agent and each Lender
in connection with any collection of any portion of the Obligations or the
enforcement of any Loan Papers during the continuance of an Event of Default.
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(b) In addition, notwithstanding anything to the contrary in the Loan
Papers, the Borrower shall pay any and all stamp, debt, and other Taxes payable
or determined to be payable in connection with any payment hereunder (other than
Taxes on the overall net income of Administrative Agent or any Lender or
franchise Taxes or Taxes on capital or capital receipts of Administrative Agent
or any Lender), or the execution, delivery, or recordation of any Loan Papers,
and agrees to save Administrative Agent and each Lender harmless from and
against any and all liabilities with respect to, or resulting from any delay in
paying or omission to pay any Taxes in accordance with this Section 11.07,
including any penalty, interest, and expenses relating thereto. All payments by
the Borrower, any Restricted Subsidiary or Bermuda Corp. under any Loan Papers
shall be made free and clear of and without deduction for any present or future
Taxes (other than Taxes on the overall net income of Administrative Agent or any
Lender of any nature now or hereafter existing, levied, or withheld, or
franchise Taxes or Taxes on capital or capital receipts of Administrative Agent
or any Lender), including all interest, penalties, or similar liabilities
relating thereto. If the Borrower shall be required by Law to deduct or to
withhold any Taxes from or in respect of any amount payable hereunder (i) the
amount so payable shall be increased to the extent necessary so that, after
making all required deductions and withholdings (including Taxes on amounts
payable to Administrative Agent or any Lender pursuant to this sentence),
Administrative Agent or any Lender receives an amount equal to the sum it would
have received had no such deductions or withholdings been made, (ii) the
Borrower shall make such deductions or withholdings, and (iii) the Borrower
shall pay the full amount deducted or withheld to the relevant taxing authority
in accordance with applicable Law. Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 11.07 shall survive the execution of this
Agreement, termination of the Commitment, repayment of the Obligations,
satisfaction of each agreement securing or assuring the Obligations and
termination of this Agreement and each other Loan Paper.
11.08. Rate Provision. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall any Obligor or any other Person be
obligated to pay any amount in excess of the Maximum Amount. If Administrative
Agent or any Lender ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess shall be paid to the Borrower or the other Person
entitled thereto. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, each Obligor,
Administrative Agent and each Lender shall, to the maximum extent permitted
under Applicable Laws, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
--------
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to the Borrower
the amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 11.08 shall control every other provision of
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all agreements among the parties to the Loan Papers pertaining to the
transactions contemplated by or contained in the Loan Papers.
11.09. Severability. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of such Loan Paper a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
11.10. Exceptions to Covenants. No Obligor shall be deemed to be
permitted to take any action or to fail to take any action that is permitted as
an exception to any covenant in any Loan Papers, or that is within the
permissible limits of any covenant, if such action or omission would result in a
violation of any other covenant in any Loan Papers.
11.11. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
11.12. GOVERNING LAW; WAIVER OF JURY TRIAL.
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(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE CONTRACTS
MADE IN SAN FRANCISCO, CALIFORNIA, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA (EXCEPT TO THE EXTENT THE
ADMINISTRATIVE AGENT AND THE LENDERS HAVE GREATER RIGHTS OR REMEDIES UNDER
FEDERAL LAW, WHETHER AS NATIONAL BANKS OR OTHERWISE, IN WHICH CASE SUCH CHOICE
OF CALIFORNIA LAW SHALL NOT BE DEEMED TO DEPRIVE ADMINISTRATIVE AGENT AND
LENDERS OF ANY SUCH RIGHTS AND REMEDIES AS MAY BE AVAILABLE UNDER FEDERAL LAW)
AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE
BORROWER AGREES THAT THE FEDERAL COURTS OF CALIFORNIA LOCATED IN SAN FRANCISCO,
CALIFORNIA WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT THAT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT,
CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE
OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. EACH OF BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER REPRESENTS THAT IT HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER HEREBY WAIVES
PERSONAL SERVICE OF ANY LEGAL PROCESS UPON IT. THE BORROWER AGREES THAT SERVICE
OF PROCESS MAY BE MADE UPON IT BY REGISTERED MAIL (RETURN RECEIPT REQUESTED)
DIRECTED TO THE BORROWER AT ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
DEPOSIT IN THE UNITED STATES MAIL. NOTHING IN THIS SECTION 11.12 SHALL AFFECT
THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
11.13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
THE BORROWER:
PACIFIC GATEWAY EXCHANGE, INC.
/s/ S Grey
------------------------------------------
By: Xxxxxx Xxxx
Its: Chief Financial Officer
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ADMINISTRATIVE AGENT:
BANK OF AMERICA, NT&SA, as Administrative
Agent
/s/ Xxxx X. Xxxxxxxx
--------------------------------------
By: Xxxx X. Xxxxxxxx
Its: Vice President
LENDERS:
Revolver Specified Percentage: 100% BANK OF AMERICA, NT&SA, individually as
a Lender
Address:
000 Xxxxxxxxxx Xxxxxx /s/ Xxxx X. Xxxxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000 ---------------------------------------
Attn.: Xxxx X. Xxxxxxxx By: Xxxx X. Xxxxxxxx
Tel: (000) 000-0000 Its: Vice President
Facs: (000) 000-0000
74
