EXHIBIT 4.3(c)
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ("Agreement") is entered into effective as of
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July 14, 1999 by GlobeNet Communications Holdings Ltd. ("Company"), and
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ALCATEL, a societe anonyme established in France (the "Guarantor").
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R E C I T A L S
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(A) Concurrently with the execution hereof, Guarantor has executed a
Guaranty (Qualified Capacity Agreement) (such agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time by
the Guarantor and the Agent, the "Guaranty") for the benefit of the Lenders
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(defined below) and Toronto Dominion (Texas), Inc., as administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such
capacity, the ("Agent"). The Guaranty has been executed and delivered by
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Guarantor pursuant to a Credit Agreement, dated as of July 14, 1999 (together
with all amendments, supplements and other modifications, if any, from time to
time hereafter made thereto, including and together with any agreement or
agreements refunding, replacing or refinancing such Credit Agreement, the
"Credit Agreement"), among Company, the various financial institutions and other
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entities (individually, a "Lender" and collectively, the "Lenders") as are or
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may from time to time become, parties thereto and the Agent.
(B) Guarantor has executed and delivered the Guaranty at the special
instance and request of Company, and in conjunction therewith Guarantor has
required the execution and delivery of this Reimbursement Agreement.
NOW, THEREFORE, based upon the foregoing, and in order to induce the
Guarantor to execute and deliver the Guaranty, Company and Guarantor agree as
follows:
ARTICLE 1
Definitions
1.1 Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Credit Agreement. As
used in this Agreement, the following terms shall have the following meanings
unless the context otherwise requires:
"Available Committed Amount" means the Contingent Guaranty Amount less
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the Guaranteed Draw Amount.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City, New York (and, solely for the
purposes of the providing and receipt of notices, Paris, France) are authorized
or required by law to remain closed.
"Capital Lease Obligations" of any Person, means the obligations of
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such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Contingent Guaranty Amount" means initially $100,000,000, which
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amount is subject to increase up to * (but the Contingent Guaranty Amount shall
in no event exceed the amount of the Term C Loan Commitment) as provided in
Schedule 1 attached hereto. The Contingent Guaranty Amount is subject to
reduction under certain conditions as provided in the Guaranty.
* MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR CONFIDENTIAL
TREATMENT.
"Credit Agreement Termination Date" means the date of repayment in
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full in cash (including, without limitation, cash obtained by way of set-off) of
all obligations and termination of all commitments under the Credit Agreement or
any subsequent credit or similar agreement relating to any refunding,
replacement or refinancing of the indebtedness and/or commitments evidenced by
the Credit Agreement.
"Guaranteed Draw Amount" means, at the time of determination, the
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aggregate amount of principal then outstanding in respect of the Term C Loans
that is subject to the Guaranty. The Guaranteed Draw Amount (i) shall not exceed
the Contingent Guaranty Amount, and (ii) shall not include any interest in
respect of the Term C Loans or any other sums advanced or due under the Credit
Agreement.
"Guaranty Draw Fee" means a fee equal to one percent (1%) of the
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principal amount of Term C Loan Commitment that is specified in the applicable
Notice of Guaranty Draw as being made subject to the Guaranty.
"Increased Indebtedness Fee" means, with respect to each borrowing
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constituting Indebtedness for Borrowed Money (other than any borrowing incurred
pursuant to or in connection with the Credit Agreement), a fee equal to three
percent (3%) of the principal amount of such borrowing determined as of the time
all of the proceeds of such borrowing are actually received by the Borrower or
any Subsidiary, as the case may be.
"Indebtedness for Borrowed Money" means the principal amount of the
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borrowings of the Company and its Subsidiaries, excluding (i) fees or interest
in respect of borrowings, (ii) non-speculative hedging transactions, (iii) any
amounts owed pursuant to this Agreement, (iv) leases properly classified as
operating leases under GAAP, but Indebtedness for Borrowed Money shall include
the capitalized value of any Capital Lease Obligations, and (v) intercompany
indebtedness.
"Lender Hedging Agreement" means any agreement relating to the
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obligations referred to in clause (i)(B) of Section 4.6.
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"Notice of Guaranty Draw" means a notice given by Agent to Guarantor
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pursuant to Section 9.08 of the Credit Agreement (but subject to the limitations
set forth in Section 2.8 of the Guaranty) specifying that an advance of funds in
respect of the Term C Loan Commitment is made subject to the Guaranty and
specifying the remaining amount that may be advanced under Term C Loan
Commitment after giving effect to such Advance.
"Parent" means GlobeNet Communications Group Limited, a Bermuda
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company.
"Party" means either the Guarantor or the Company.
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"Person" means an individual, corporation, partnership, limited
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liability company, trust or other entity.
"Quarterly Availability Fee" means, as to any applicable period of
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determination, (i) for each day during such period when there is not outstanding
any Guaranteed Draw Amount, an amount equal to 0.375 percent per annum of the
average daily Available Committed Amount during such number of days (including,
without limitation, all amounts added back to the Available Committed Amount
pursuant to Section 9.08 of the Credit Agreement during such period), , and (ii)
for each day during such period when there is any outstanding Guaranteed Draw
Amount, an amount equal to 0.75 percent per annum of the average Available
Committed Amount during such number of days.
"Quarterly Guaranteed Draw Fee" means an amount equal to 2.0 percent
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per annum of the average daily Guaranteed Draw Amount outstanding for the
applicable period of determination, provided that for the purposes of
determining the Quarterly Guaranteed Draw Fee, the Guaranteed Draw Amount shall
be reduced by any portion thereof that has become a Reimbursement Amount.
"Reimbursement Amount" has the meaning set forth in Section 3.1.
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"Reimbursement Obligation" has the meaning set forth in Section 3.1.
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"Semi-Annual Payment Date" means each June 30 and December 31 (or, if
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such day is not a Business Day, the immediately preceding Business Day)
commencing with December 31, 2001 (or, if such day is not a Business Day, the
immediately preceding Business Day).
"Senior Obligations" means all obligations of Company now existing or
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hereafter arising under the Credit Agreement, any Lender Hedging Agreement or
any other Loan Document, including, without limitation, principal, reimbursement
obligations in respect of letters of credit, interest (including, without
limitation, interest accruing after the filing of, or which would have accrued
but for the filing of, a petition initiating any proceeding referred to in
Section 5.3, whether or not allowed as a claim in such proceeding), fees,
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indemnities and expenses.
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"Subordinated Obligations" means the Reimbursement Amount, all
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interest thereon and all other amounts payable in connection therewith.
"Upfront Fee" means a fee that is paid once, in an amount equal to the
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sum of (i) $250,000, plus (ii) one percent (1%) of the Contingent Guaranty
Amount on the date of this Agreement.
ARTICLE 2
Payment of Fees in Respect of Guaranty
2.1 Payment of Fees in Respect of Guaranty. In consideration for the
provision of the Guaranty, the Company agrees to pay the following fees to
Guarantor at the times indicated:
(a) Upfront Fee. The Upfront Fee shall be payable in full within
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three (3) Business Days after all of the following have occurred: (i) the
Net Equity Proceeds and the Parent Senior Note Proceeds have been received
by Parent, and (ii) the Credit Agreement has been executed by Company and
the Lenders;
(b) Guaranty Draw Fee. The Guaranty Draw Fee shall be payable three
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(3) Business Days after receipt by Guarantor from the Agent of the
applicable Notice of Guaranty Draw pursuant to the Credit Agreement;
provided, however, that Company shall not be liable for making any such
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payment until the proceeds of the applicable draw have actually been
received by the Company;
(c) Quarterly Availability Fee. The Quarterly Availability Fee shall
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commence to accrue on the date hereof and shall be payable on a calendar
quarter basis in arrears on the last Business Day of the last month of such
calendar quarter during the term of the Guaranty, based upon the average
daily Available Committed Amount outstanding during the preceding calendar
quarter (or, if applicable, portion thereof);
(d) Quarterly Guaranty Draw Fee. The Quarterly Guaranty Draw Fee
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shall be payable on a quarterly basis in arrears on the last Business Day
of the last month of each calendar quarter during the term of the Guaranty
(or, if applicable, portion thereof), based upon the average daily
Guaranteed Draw Amount outstanding during the preceding calendar quarter
(or, if applicable, portion thereof); and
(e) Increased Indebtedness Fee. The Increased Indebtedness Fee shall
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be payable on the last Business Day of any month during which the Company
or any of its Subsidiaries incurs any Indebtedness for Borrowed Money other
than that incurred pursuant to or in connection with the Credit Agreement,
including any Indebtedness for Borrowed Money incurred to refund, replace
or refinance Indebtedness for Borrowed Money incurred pursuant to or in
connection with the Credit Agreement. The Company agrees to give notice to
the Guarantor within three (3) Business Days after it incurs any
Indebtedness for Borrowed Money that would obligate it to pay the Increased
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Indebtedness Fee. Notwithstanding anything to the contrary, the aggregate
amount of all Increased Indebtedness Fees shall not exceed $1,250,000.
ARTICLE 3
Reimbursement Obligations
3.1 Reimbursement Obligation. If and to the extent Guarantor pays any
amount to the Agent pursuant to the terms of the Guaranty, Company shall
immediately and automatically be obligated (the "Reimbursement Obligation") to
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pay such amount (inclusive of all other such amounts, collectively, the
"Reimbursement Amount") to Guarantor with interest thereon as herein provided,
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subject to the subordination provisions of Article 5 hereof.
3.2 Interest on Reimbursement Amounts. The Reimbursement Amount shall bear
interest at the applicable rate specified in the Credit Agreement as to
principal of the Term C Loans that is not paid when due from the date that
Guarantor advances funds to Agent pursuant to the Guaranty until repaid as
provided herein. The Reimbursement Amount shall continue to bear interest at
such rate notwithstanding the termination of the Credit Agreement.
3.3 Payment of Reimbursement Amount.
(a) Unless otherwise agreed to by the Lenders, Guarantor and Company agree
that no payment shall be made in respect of the Reimbursement Amount or interest
thereon (except as provided below in this Section 3.3(a)) prior to the Credit
Agreement Termination Date; provided that Company shall be required to make
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payments in respect of the Reimbursement Amount and interest thereon to the
extent of 50 percent of the Excess Cash Flow available for such purpose (if any)
as provided in clause ninth of Section 8.08(d) of the Credit Agreement; such
payments shall be applied first to interest and then to the Reimbursement Amount
and shall be payable on each Semi-Annual Payment Date based upon the Excess Cash
Flow for the semi-annual period ending on such Semi-Annual Payment Date.
Notwithstanding anything herein to the contrary, Guarantor and Company agree
that no payment shall be required or made in respect of the Reimbursement Amount
or interest thereon during any time when a Default or Designated Event has
occurred and is continuing or would result therefrom (it being understood and
agreed that any payment default under the Credit Agreement cured by the
Guarantor shall not be a Default or Designated Event thereunder upon and
subsequent to such cure).
(b) After the Credit Agreement Termination Date, the Reimbursement Amount
shall be payable in four equal semi-annual installments of principal, the first
of which (together with accrued and unpaid interest thereon) shall be due and
payable on the first Business Day following the first six-month anniversary of
the Credit Agreement Termination Date, and a like installment of principal and
interest shall be due on the first Business Day following each subsequent six-
month anniversary of such date until the fourth such date, when the
Reimbursement Amount and all accrued and unpaid interest thereon, shall be due
and payable in full. In addition, after the Credit Agreement Termination Date,
75 percent of the Company's net cash flow (determined in accordance with
GAAP) shall be applied to prepay the Reimbursement
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Amount and interest thereon (with payments being applied first to interest),
with one-half (1/2) of such payments being applied in the regular order of
maturity and one-half (1/2) thereof being applied in the inverse order of
maturity; such payments shall be made on the first Business Day of each calendar
quarter based upon the net cash flow for the preceding calendar quarter.
3.4 Prepayment of Reimbursement Amount. Company may (to the extent it has
funds available therefor) prepay the Reimbursement Amount and interest thereon,
in whole or in part, at any time without penalty or premium.
ARTICLE 4
Certain Restrictions, Guaranty and Lien Rights
4.1 Restrictions on Declaration of Defaults and on Taking Certain Actions.
Guarantor agrees that until the earlier to occur of (i) the Credit Agreement
Termination Date, and (ii) the occurrence of an Event of Default under or in
respect of the Credit Agreement and the acceleration of payment of all
obligations thereunder, Guarantor may not, except as hereafter provided in this
Section 4.1, declare a default in respect of the Reimbursement Obligation or
otherwise accelerate payment of the Reimbursement Amount and interest thereon
under this Agreement. The foregoing provision shall not be construed to limit
the obligation of Company to pay the fees called for under Article 2 of this
Agreement or to make payments in respect of the Reimbursement Amount and
interest thereon out of Excess Cash Flow as provided in Section 3.3(a) hereof,
and upon any failure to pay such fees or payments Guarantor may (after giving no
less than 15 days prior written notice thereof to Agent) pursue any action
available to recover the amount of the fees or payments that have not been paid.
In addition to the foregoing, Guarantor may also declare a default under this
Agreement (after giving not less than 15 days prior written notice thereof to
Agent), if the Maturity Date set forth in the Credit Agreement is amended to
provide for a later date that is more than three months after the original
scheduled Maturity Date.
4.2 Restrictions on Indebtedness for Borrowed Money. Until such time as
all Reimbursement Amounts and all other amounts payable to Guarantor under this
Agreement have been paid in full and this Agreement has been terminated, the
Company agrees that its and its subsidiaries' total Indebtedness for Borrowed
Money shall not exceed $500,000,000 in the aggregate.
4.3 Restriction on Payment on Parent Senior Notes. Until such time as all
Reimbursement Amounts and all other amounts payable to Guarantor under this
Agreement have been paid in full and this Agreement has been terminated, the
Parent shall not make any payments in respect of principal on the Parent Senior
Notes.
4.4 Restriction on Redemptions and Reduction in Share Capital. During any
time while the Guaranty is in effect or there is outstanding and unpaid any
Reimbursement Obligation or other amount payable to Guarantor hereunder, then
the Company and Parent shall not redeem, reacquire, or buy back any outstanding
capital stock of the Company or Parent, as applicable, nor
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otherwise reduce its outstanding share capital, provided that foregoing
provision shall not restrict the Parent from redeeming (i) up to $31,000,000 of
its outstanding capital stock from the proceeds of the Company high yield debt
and equity offerings and (ii) its capital stock as required in connection with
its stock option plans and employment agreements, provided that redemptions
pursuant to this clause (ii) shall not exceed $10,000,000. In addition to the
foregoing, following the closing and funding of the Parent Senior Notes and the
sale of the equity interests in Parent described in the Credit Agreement, and
after any Notice of Guaranty Draw is given, the outstanding share capital of the
Company shall not be less than the excess of $540,000,000 over the sum of the
fees, out-of-pocket expenses and other costs incurred by the Parent and the
Company in connection with the issuance by the Parent of the Parent Senior Notes
and certain of its equity interests and the other transactions contemplated
hereunder and under the Credit Agreement.
4.5 Additional Guaranties and Lien Rights. After the occurrence of the
Credit Agreement Termination Date, Company agrees that it shall, to the extent
granted to the Agent, and shall cause all of its Subsidiaries to the extent
provided under the Credit Agreement (the "Subject Subsidiaries" which directly
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or indirectly own any interest in the System) to (i) guaranty Company's
obligations hereunder, and (ii) xxxxx x xxxx on their interests in the System,
to secure performance of Company's obligations under this Agreement. The
documentation evidencing such guaranties and liens shall be in substantially the
same form as that executed in conjunction with the Credit Agreement. Guarantor
agrees that it will not register, make any filing or take any similar action in
respect of such future lien until after the occurrence of the Credit Agreement
Termination Date.
4.6 Negative Pledge. So long as the Guaranty is in effect or any
Reimbursement Amount or any other amount is payable to Guarantor pursuant to
this Agreement, the Company and the Subject Subsidiaries shall not grant any
liens or security interests on or in any of their assets to secure the payment
of any borrowings, nor shall the Company or the Subject Subsidiaries guaranty
the payment of any borrowings of any other person or entity, except that the
foregoing provision shall not restrict the following: (i) any liens or security
interests or guarantees granted or made in connection with or with respect to
(A) the Credit Agreement, including any refunding, replacement or refinancing of
the indebtedness and/or commitments evidenced by the Credit Agreement, and (B)
all obligations under non-speculative hedging transactions payable to a Person
that was a Lender (or an affiliate of a Lender) at the time the hedging
transaction pursuant to which such obligations are payable was entered into to
the extent such obligations are secured by liens or security interests on assets
securing the obligations described in the preceding clause (A) or guaranteed by
any or all of the Persons guarantying such obligations; (ii) purchase money
security interests and liens securing up to $50,000,000 in principal
obligations, together with all interest, fees and other charges incurred in
respect of such borrowings; and (iii) liens arising by operation of law. The
Company shall notify Guarantor, within two (2) Business Days after the
consummation thereof, of the incurrence of any purchase money security interest
or lien as described in clause (ii) of the preceding sentence, and the principal
amount secured thereby.
4.7 Credit Agreement Definitions. Notwithstanding anything to the contrary
contained herein or in the Guaranty, for the purposes of this Agreement and the
Guaranty, the
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following terms: (a) "Qualified Capacity Agreement", (b) "Qualified
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Capacity Revenue, (c) "Qualified Purchaser", (d) "Capacity Swap Agreements",
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(e) "Capacity Sales Agreements", (f) "Net Equity Proceeds", (g) "Parent Senior
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Note Proceeds", and (h) "Parent Senior Notes", shall have the meanings ascribed
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to such terms in the Credit Agreement as of the date hereof, and shall only be
modified for purposes of this Agreement by any modification to the Credit
Agreement (including any agreement or agreements refunding, replacing or
refinancing the Credit Agreement in effect as of the date hereof) subsequent to
such date to the extent that such a modification is not adverse to the
Guarantor. In addition, the Company acknowledges and agrees that any reduction
of the Term A Loan Commitment, the Term B Loan Commitment and the Term C Loan
Commitment shall be calculated and reduced pro rata among all such loan
commitments. The Company agrees that it shall not amend Section 9.08 of the
Credit Agreement (or any successor provision) in a manner adverse to the
Guarantor without the Guarantor's prior consent.
4.8 Reductions. (a) Company agrees that if it determines that there is an
increase of at least * in the aggregate in Qualified Capacity Revenue from any
one or more Qualified Capacity Agreements or any other Capacity Sales Agreements
or Capacity Swap Agreements that will not be needed to support any drawing under
the Term C Loan Commitment, Company shall promptly notify Agent and, to the
extent permitted under Section 9.08 of the Credit Agreement, shall require the
Agent to notify Guarantor that the Contingent Guaranty Amount or the Guaranteed
Draw Amount, as applicable, shall be reduced to the extent of such increase. In
connection with the foregoing, Company shall promptly furnish to the Agent such
information in Company's possession (including copies of the applicable
Qualified Capacity Agreements) as may be necessary to enable the Agent to make a
determination that such a reduction is permitted under the Credit Agreement.
(b) In the event that there exists any Qualified Capacity Revenue in
excess of * in the aggregate from any one or more Qualified Capacity Agreements
or any other Capacity Sales Agreements or Capacity Swap Agreements that is not
supporting any Term C Loan after the expiration of the availability of the Term
C Loan Commitment, Company will promptly notify Agent and, to the extent
permitted under Section 9.08 of the Credit Agreement, shall require the Agent to
notify Guarantor that the Guaranteed Draw Amount shall be reduced to the extent
of such amount of Qualified Capacity Revenue. In connection with the foregoing,
Company shall promptly furnish to the Agent such information in Company's
possession as referred to in Section 4.8(a) above.
* MATERIAL OMITTED AND FILED SEPARATELY UNDER AN APPLICATION FOR CONFIDENTIAL
TREATMENT.
ARTICLE 5
SUBORDINATION
5.1 Agreement to Subordinate. Each of Guarantor and Company agrees that
the Subordinated Obligations are and shall be subject, subordinate and rendered
junior, to the extent and in the manner hereinafter set forth, in right of
payment, to the prior payment in full in cash
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of all Senior Obligations. Guarantor acknowledges and agrees that these
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Obligations, whether such Senior
Obligations were created or acquired before or after the execution and delivery
of this Agreement, to acquire and continue to hold such Senior Obligations and
such holder of Senior Obligations shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold such Senior
Obligations.
5.2 Payment Restrictions. Company shall not make, and Guarantor shall not
receive or accept, any payment in respect of the Subordinated Obligations if a
Default or Designated Event has occurred and is continuing or would result
therefrom, unless otherwise agreed to by the Lenders. For purposes of these
provisions, "payment" in respect of the Subordinated Obligations shall include
any direct or indirect payment or distribution from any source, whether in cash,
property or securities, by set-off or otherwise, in respect of principal,
premium, interest or otherwise, including in connection with any redemption or
purchase thereof or any recovery on any claim for rescission or damages.
5.3 Insolvency and Related Proceedings. (a) Upon any payment, distribution
or other transfer of all or any of the assets of Company in the event of
(i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to Company or to its assets,
(ii) any liquidation, dissolution or other winding up of Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or
(iii) any assignment for the benefit of creditors, any scheme of
arrangement or reconstruction of creditor claims, or any marshaling of
assets and liabilities of Company,
then, and in any such event, unless the Lenders shall otherwise agree in
writing, the holders of the Senior Obligations shall receive payment in full in
cash of all amounts due or to become due (whether or not the Senior Obligations
have been declared due and payable prior to the date on which the Senior
Obligations would otherwise have become due and payable) on or in respect of all
Senior Obligations before the Guarantor or anyone claiming through or on its
behalf (including any receiver, trustee, or otherwise) are entitled to receive
any payment on account of the Subordinated Obligations, and to that end any
payment or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in respect of the Subordinated
Obligations in any such case, proceeding, dissolution, liquidation or other
winding up or event, shall be paid or delivered directly to the Agent for the
application (in the case of cash) to, or as collateral (in the case of non-cash
property or securities) for, the payment or prepayment of the Senior Obligations
until the Senior Obligations shall have been paid in full in cash.
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(b) If any proceeding, liquidation, dissolution or winding up referred to
in clause (a) above is commenced by or against Company,
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(i) the Agent is hereby irrevocably authorized and empowered (in its
own name or in the name of Company, Guarantor or otherwise), but shall have
no obligation, to demand, xxx for, collect and receive every payment or
distribution in respect of the Subordinated Obligations and give
acquittance therefor and to file claims and proofs of claim and take such
other action (including, without limitation, voting the Subordinated
Obligations or enforcing any security interest or other lien securing
payment of the Subordinated Obligations) as the Agent may deem necessary or
advisable for the exercise or enforcement of any of the rights or interests
of the Lender Parties, including the Agent, hereunder; provided that
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Guarantor shall be permitted to take such action so long as, in the
reasonable judgment of the Agent, the taking of such action is not
inconsistent with the terms hereof and the parties agree that any party
taking any such action hereunder shall promptly notify the other party upon
the taking of any such action; provided, however, that if the Agent takes
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any such action, the Agent shall apply all proceeds first, to the payment
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of the costs of enforcement of these subordination provisions, and second,
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to the pro rata payment, prepayment and/or cash collateralization of the
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Senior Obligations in a manner consistent with the provisions set forth in
the Credit Agreement; and
(ii) the Guarantor shall duly and promptly take such action as the
Agent may reasonably request (A) to collect the Subordinated Obligations
for account of the holders of Senior Obligations and to file appropriate
claims or proofs of claim in respect of the Subordinated Obligations, (B)
to execute and deliver to the Agent such powers of attorney, assignments,
or other instruments as the Agent may reasonably request to enable them to
enforce any and all claims with respect to, and any security interests and
other liens securing payment of, the Subordinated Obligations and (C) to
collect and receive any and all payments or distributions which may be
payable or deliverable upon or with respect to the Subordinated
Obligations.
5.4 Payment Over. All payments, distributions or other transfers of assets
of Company, whether in cash, property or securities upon or with respect to the
Subordinated Obligations which are received by the Guarantor contrary to the
provisions of this Agreement shall be received in trust for the pro rata benefit
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of holders of Senior Obligations, shall be segregated from other funds and
property held by the Guarantor and shall be forthwith paid over to the Agent in
the same form as so received (with any necessary endorsement) to be applied, pro
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rata (in the case of cash) to, or held as collateral (in the case of noncash
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property or securities) for, the payment or prepayment of the Senior
Obligations, whether matured or unmatured, in accordance with the terms of this
Agreement.
5.5 Specific Performance. The Agent is hereby authorized to demand
specific performance of these subordination provisions, whether or not Company
or Guarantor shall have complied with any of the provisions hereof applicable to
it, at any time when Guarantor shall have failed to comply with any of the
provisions of this Agreement applicable to it. Guarantor hereby irrevocably
waives any defense (other than the defense of payment in full in cash of the
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Senior Obligations) based on the adequacy of a remedy at law which might be
asserted as a bar to such remedy of specific performance.
5.6 Subordination Legend; Further Assurances. Guarantor will cause each
note and instrument (if any) evidencing the Subordinated Obligations to be
endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated
to the prior payment in full in cash of the Senior Obligations (as
defined in the Reimbursement Agreement, dated as of July ___, 1999)
pursuant to, and to the extent provided in, the Reimbursement
Agreement by the maker hereof and payee named herein in favor of the
holders of such Senior Obligations and any person now or hereafter
designated as their agent."
Each of Guarantor and Company hereby agrees to xxxx its books of account in such
a manner as shall be effective to give proper notice of the effect of this
Agreement and will, in the case of any Subordinated Obligation not evidenced by
any note or instrument, following the occurrence and continuation of a Default,
or Designated Event, upon the Agent's request, cause such Subordinated
Obligation to be evidenced by an appropriate note or instrument or instruments
endorsed with the above legend. Each of Guarantor and Company will at its
expense and at any time and from time to time promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Agent may reasonably request to protect any right or
interest granted or purported to be granted hereunder or to enable holders of
Senior Obligations or the Agent to exercise and enforce their rights and
remedies hereunder.
5.7 No Change in or Disposition of Subordinated Obligations. Guarantor
will not, without the prior written consent of the Agents (a) sell, assign,
transfer, endorse, pledge, encumber or otherwise dispose of any of the
Subordinated Obligations ("Transfer") or (b) permit the terms of any of the
--------
Subordinated Obligations to be changed in such a manner as to have an adverse
effect upon the rights or interests of holders of Senior Obligations or the
Agent unless, in the case of any purported Transfer, either (i)
(a) the proposed assignee is a societe anonyme established or existing
under the laws of France or a corporation organized under the laws of
Bermuda, the United States, any state thereof or the District of
Columbia, or any member country as of the date hereof of the European
Union;
(b) the proposed assignee assumes all obligations of the Guarantor
hereunder, pursuant to agreements reasonably satisfactory to the
Agent;
(c) the proposed assignee has a long-term senior unsecured debt rating of
BBB-(or better) from Standard & Poor's Services and Baa3 (or better)
from Xxxxx'x Investor Service, Inc.; and
11
(d) the Guarantor delivers to the Agent an officer's certificate and an
opinion of counsel reasonably acceptable to the Agent, each stating
that such sale, assignment or transfer complies with the preceding
clauses (a) through (c);
or (ii) the proposed assignee agrees to be bound by the subordination
provisions of this Agreement pursuant to an agreement reasonably satisfactory to
the Agent and such Transfer does not cause or effect any Transfer of any of
Guarantor's obligations under this Agreement and in any event Guarantor remains
primarily liable in respect of all of its obligations hereunder.
5.8 Obligations Hereunder Not Affected. All rights and interest of
holders of Senior Obligations and the Agent hereunder, and all agreements and
obligations of the Guarantor and Company hereunder, shall remain in full force
and effect irrespective of:
(a) any lack of validity or enforceability of any document evidencing
the Senior Obligations;
(b) except as contemplated in the last sentence of Section 4.1, any
change in the time, manner or place of payment of, or any other term of,
all or any of the Senior Obligations, or any other amendment or waiver of
or any consent to departure from any of the documents evidencing or
relating to the Senior Obligations;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty
or other document, for all or any of the Senior Obligations;
(d) any failure of any holder of Senior Obligations or the Agent to
assert any claim or to enforce any right or remedy against any other party
hereto under the provisions of this Agreement, the Credit Agreement or any
other document;
(e) any reduction, limitation, impairment or termination of the
Senior Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
Company and Guarantor hereby waive any right to or claim of) any defense
(other than the defense of payment in full in cash of the Senior
Obligations) or setoff, counterclaim, recoupment or termination whatsoever
by reason of invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Senior Obligation; and
(f) any other circumstance which might otherwise constitute a defense
(other than the defense of payment in full in cash of the Senior
Obligations) available to, or a discharge of, Company in respect of the
Senior Obligations or Guarantor in respect of these subordination
provisions.
These subordination provisions shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Senior Obligations
is rescinded or must otherwise be
12
returned by any holder of Senior Obligations or the Agent upon the insolvency,
bankruptcy or reorganization of Company or otherwise, all as though such payment
had not been made.
5.9 Miscellaneous Subordination Provisions. (a) The subordination
provisions contained herein are solely for the benefit of the holders from time
to time of Senior Obligations and their representatives, assignees and
beneficiaries and may not be rescinded, cancelled, amended or modified in any
way other than any amendment or modification that would not adversely affect the
rights of any holder of Senior Obligations. Guarantor shall not subordinate any
Subordinated Obligations to any indebtedness or obligation of Company other than
the Senior Obligations.
(b) No right of any present or future holder of any Senior
Obligations to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of
Company or by any act or failure to act, in good faith, by any such holder, or
by any non-compliance by Company with the terms, provisions and covenants of
this Agreement, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.
(c) These subordination provisions shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Senior Obligations is, pursuant to
applicable law, avoided, recovered, or rescinded or must otherwise be restored
or returned by any holder of Senior Obligations, whether as a "voidable
preference," "fraudulent conveyance," "fraudulent transfer," or otherwise, all
as though such payment or performance had not been made.
ARTICLE 6
Miscellaneous
6.1 Notices. All notices, requests and other communications to any party
hereunder shall be in writing in the English language (including bank wire,
facsimile transmission or similar writing) and shall be given to such party at
its address, telecopy number set forth on the signature pages hereof, or such
other address or telecopy number as such party may hereafter specify for the
purpose by notice to the other party. Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission, on the
next Business Day after such telecopy is transmitted to the telecopy number
specified in this Section and confirmation has been received, (ii) if given by
mail, ten (10) Business Days after such communication is deposited in the mails
with first class (or, in the case of international mail, airmail) postage
prepaid, addressed as aforesaid, or (iii) if given by any other means, the next
Business Day following delivery at the address specified in this Section.
6.2 No Waivers. No failure or delay by either Party or any Lender Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other
13
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any other rights or remedies.
6.3 Amendments and Waivers. This Agreement constitutes the complete
agreement of Company and the Guarantor with respect to the subject matter hereof
and supersedes all prior or contemporaneous negotiations, promises, covenants,
agreements or representations. No amendment, modification, termination or
waiver of any provision hereof, nor any consent to the departure from the
provisions hereof shall in any event be effective without the written consent of
both Parties and the Agent.
6.4 Successors and Assigns; Beneficiaries. This Agreement shall be binding
upon the Parties and their respective successors, transferees and assigns,
provided, however, that neither Party may assign this Agreement or transfer any
-------- -------
of the rights or obligations hereunder without the prior written consent of the
other Party.
6.5 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
EXCLUDING ITS CONFLICTS OF LAW PROVISIONS.
6.6 Consent to Jurisdiction; Waiver of Immunities. (a) Each Party hereby
acknowledges and agrees that it expressly, irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for the recognition or
enforcement of any judgment, and hereby irrevocably and unconditionally agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
federal court. Each Party hereby irrevocably waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
herein. Each Party hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(b) The Company hereby irrevocably appoints CT Corporation System (the
"Company Process Agent"), with an office on the date hereof at 1633 Broadway,
---------------------
Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx, as the Company Process Agent of Company
as its agent to receive, on behalf of it and its property, service of copies of
the summons and complaint and any other process which may be served in any such
action or proceeding. Such service may be made by mailing or delivering a copy
of such process to the Company in care of the Company Process Agent at the
Company Process Agent's above address, and the Company hereby irrevocably
authorizes and directs the Company Process Agent to accept such service on its
behalf.
(c) The Guarantor hereby irrevocably appoints Xxxxxx Xxxx & Priest LLP
(the "Guarantor Process Agent"), with an office on the date hereof at 40 West
------------------------
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx, as the Guarantor
Process Agent of Guarantor as its agent
14
to receive, on behalf of it and its property, service of copies of the summons
and complaint and any other process which may be served in any such action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Guarantor in care of the Guarantor Process Agent at the Guarantor
Process Agent's above address, and the Guarantor hereby irrevocably authorizes
and directs the Guarantor Process Agent to accept such service on its behalf.
(d) As an alternative method of service, the Guarantor and the Company
each also irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to the Guarantor
or the Company, as the case may be, at its address specified on the signature
page hereof. Each Party agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
6.7. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT. EACH
PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDERS ENTERING INTO THE CREDIT AGREEMENT.
6.8 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, provided that if any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
6.9 Interpretation. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
6.10 Further Assurances. At any time or from time to time, upon the
reasonable request of a Party or the Agent therefor, the Parties shall execute
and deliver such further documents and do such other acts and things as may be
reasonably requested in order to effect fully the purposes of this Agreement.
6.11 Termination. This Agreement (except Article 5) shall terminate at such
time as (i) the Guaranty is no longer in effect and Guarantor has no further
obligations thereunder, and (ii) all Reimbursement Amounts and other amounts
payable to Guarantor hereunder have been paid in full.
15
6.12 Multiple Counterparts. This Agreement may be executed in one or more
counterparts.
6.13 Legal Opinion. The Company hereby agrees to promptly upon receipt of
appropriate invoices from Guarantor, reimburse Guarantor for all costs and
expenses incurred by Guarantor in connection with the delivery of any opinion
requested of Guarantor in accordance with section 5.9 of the Guaranty.
16
EXECUTED as of the date set forth above.
ALCATEL
/s/
By _____________________________________
Name:
Title:
Address: Alcatel
00 xxx Xx Xxxxxx
00000 Xxxxx, Xxxxxx
Fax:
The Common Seal of GLOBENET COMMUNICATIONS
HOLDINGS LTD. was hereunto affixed in the presence
of:
/s/ Xxxxxxx Xxxxx
By _____________________________________
Director
/s/ Xxx Xxxxxxxxx
By _____________________________________
Director / Secretary
GLOBENET COMMUNICATIONS HOLDINGS
LTD.
0 Xxxxxx'x Xxx Xxxx
Address: ______________________________
Southside
______________________________
St. David's
______________________________
Bermuda DD 02
000-000-0000
Fax: ______________________________
00
XXXXXXXXXXXX:
XXXXXXX XXXXXXXX (XXXXX), INC.,
as Administrative Agent
By: ______________________________
Name:
Title:
18
SCHEDULE 1
TO
REIMBURSEMENT AGREEMENT
For every * that the total amount owed or that may become owed to
Contractor under the Supply Contract (whether as a result of or with respect to
the Initial Contract Price, Contract Variations, System Upgrades, System
Extensions or otherwise) exceeds * , the Contingent Guaranty Amount shall
(unless the Agent, at the direction of the Company, notifies the Guarantor
in writing to the contrary) be increased by * ; provided, however, the
-------- -------
aggregate amount of such increases shall in no event result in the Contingent
Guaranty Amount exceeding * in the aggregate and that such increases
shall only be made in aggregate amounts of * or in whole number
multiples thereof. All capitalized terms used and not otherwise defined herein
shall have the meaning set forth in the Supply Contract.
* MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR CONFIDENTIAL
TREATMENT.
1-1
