Exhibit 10.2
EXECUTION COPY
CREDIT AGREEMENT
Dated as of
January 28, 1998
among
FLAG LIMITED,
as the Borrower
BARCLAYS BANK PLC,
as Administrative Agent
INTERNATIONAL TRUST COMPANY OF BERMUDA LIMITED,
as Collateral Trustee
BARCLAYS BANK PLC
AND THE OTHER TERM LENDERS LISTED HEREIN,
as the Term Lenders
BARCLAYS BANK PLC
AND THE OTHER REVOLVING CREDIT LENDERS LISTED HEREIN,
as the Revolving Credit Lenders
------------------------------------------------------
BARCLAYS BANK PLC,
as the Arranger
------------------------------------------------------
Term and Working Capital Financing of an
Approximately 27,000 Kilometer Submarine Fiberoptic
Cable System Connecting Europe, the Middle East and Asia
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS........................................................................ 2
SECTION 1.1. Defined Terms............................................................................ 2
SECTION 1.2. Classification of Loans and Borrowings................................................... 37
SECTION 1.3. Terms Generally.......................................................................... 37
SECTION 1.4. Accounting Terms; GAAP................................................................... 38
ARTICLE II
THE COMMITMENTS.................................................................... 38
SECTION 2.1. Commitments.............................................................................. 38
SECTION 2.2. Loans and Borrowings..................................................................... 38
SECTION 2.3. Requests for Borrowings.................................................................. 39
SECTION 2.4. Funding of Borrowings.................................................................... 40
SECTION 2.5. Interest Elections....................................................................... 40
SECTION 2.6. Termination and Reduction of Commitments................................................. 41
SECTION 2.7. Repayment of Loans; Evidence of Debt..................................................... 43
SECTION 2.8. Optional Prepayments of Loans............................................................ 44
SECTION 2.9. Mandatory Prepayments.................................................................... 45
SECTION 2.10. Fees.................................................................................... 47
SECTION 2.11. Interest................................................................................ 47
SECTION 2.12. Alternate Rate of Interest; Illegality.................................................. 48
SECTION 2.13. Increased Costs......................................................................... 49
SECTION 2.14. Break Funding Payments.................................................................. 50
SECTION 2.15. Taxes................................................................................... 50
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs............................. 51
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.......................................... 52
ARTICLE III
REPRESENTATIONS AND WARRANTIES..................................................... 54
SECTION 3.1. Financial Condition...................................................................... 54
SECTION 3.2. No Change................................................................................ 54
SECTION 3.3. Organization; Existence; Business........................................................ 54
SECTION 3.4. Compliance with Law...................................................................... 54
SECTION 3.5. Power and Authorization; Enforceable Obligations......................................... 55
SECTION 3.6. Corporate Structure...................................................................... 55
SECTION 3.7. Governmental Actions, Rights-of-Way and Other Consents and
Approvals.............................................................................. 56
SECTION 3.8. No Legal Bar............................................................................. 56
PAGE
SECTION 3.9. No Proceeding or Litigation.............................................................. 57
SECTION 3.10. No Default, Event of Default or Event of Loss........................................... 57
SECTION 3.11. Ownership of Property; Liens; Common Stock.............................................. 57
SECTION 3.12. Taxes................................................................................... 58
SECTION 3.13. Federal Regulations..................................................................... 58
SECTION 3.14. ERISA................................................................................... 59
SECTION 3.15. Investment Company Act.................................................................. 59
SECTION 3.16. Full Disclosure......................................................................... 59
SECTION 3.17. Principal Place of Business, Etc. ...................................................... 59
SECTION 3.18. Intellectual Property................................................................... 59
SECTION 3.19. Sufficiency of Project Documents........................................................ 60
SECTION 3.20. Environmental Matters................................................................... 60
SECTION 3.21. Commercial Insurance.................................................................... 60
SECTION 3.22. Immunity................................................................................ 60
SECTION 3.23. Foreign Corrupt Practices Act........................................................... 60
SECTION 3.24. Fees and Enforcement.................................................................... 60
SECTION 3.25. Enforcement; Performance................................................................ 60
SECTION 3.26. Available Capacity...................................................................... 61
SECTION 3.27. Outstanding Contractor Obligations...................................................... 61
ARTICLE IV
CONDITIONS......................................................................... 61
SECTION 4.1. Conditions Precedent to Closing.......................................................... 61
SECTION 4.2. Conditions Precedent to each Loan........................................................ 70
ARTICLE V
AFFIRMATIVE COVENANTS.............................................................. 72
SECTION 5.1. Financial Statements and Other Information............................................... 72
SECTION 5.2. Reports; Other Information............................................................... 73
SECTION 5.3. Payment of Obligations................................................................... 74
SECTION 5.4. Existence................................................................................ 74
SECTION 5.5. Compliance with Laws..................................................................... 74
SECTION 5.6. Performance and Enforcement of Agreements................................................ 74
SECTION 5.7. Taxes and Claims......................................................................... 74
SECTION 5.8. Notices.................................................................................. 75
SECTION 5.9. Insurance................................................................................ 76
SECTION 5.10. Fiscal Year............................................................................. 76
SECTION 5.11. Use of Proceeds......................................................................... 76
SECTION 5.12. Interest Rate Protection................................................................ 77
SECTION 5.13. Operating Budgets....................................................................... 77
SECTION 5.14. Governmental Actions and Rights-of-Way.................................................. 77
SECTION 5.15. Cooperation with Independent Engineer................................................... 77
PAGE
SECTION 5.16. Revenue Account......................................................................... 77
SECTION 5.17. Maintenance of Process Agent............................................................ 77
SECTION 5.18. System Operation and Maintenance........................................................ 77
SECTION 5.19. Event of Loss........................................................................... 78
SECTION 5.20. Books and Records; Inspection Rights.................................................... 78
SECTION 5.21. Foreign Corrupt Practices Act........................................................... 79
SECTION 5.22. Intellectual Property Collateral........................................................ 79
SECTION 5.23. Maintenance of Restoration.............................................................. 79
SECTION 5.24. PSA 3; FSA Date......................................................................... 79
SECTION 5.25. Further Assurances...................................................................... 80
ARTICLE VI
NEGATIVE COVENANTS................................................................. 80
SECTION 6.1. Indebtedness............................................................................. 81
SECTION 6.2. Liens.................................................................................... 81
SECTION 6.3. Fundamental Changes...................................................................... 82
SECTION 6.4. Sale of Assets........................................................................... 82
SECTION 6.5. Investments, Loans, Advances, Guarantees and Acquisitions................................ 82
SECTION 6.6. Restricted Payments; Payments with respect to Senior Unsecured Notes..................... 83
SECTION 6.7. Limitations on Issuance of Interests..................................................... 83
SECTION 6.8. Limitations on Transfer of Interests..................................................... 84
SECTION 6.9. Payment of Construction Costs; Construction Cost Certificate; Operating Budget........... 84
SECTION 6.10. Amendment of Project Documents, Senior Unsecured Note Documents......................... 85
SECTION 6.11. Termination, Assignment of Project Documents............................................ 86
SECTION 6.12. Approval of Additional Contracts........................................................ 87
SECTION 6.13. Sales of Capacity....................................................................... 87
SECTION 6.14. Acceptance of System.................................................................... 88
SECTION 6.15. Construction and Maintenance Agreement.................................................. 88
SECTION 6.16. Changes to Configuration................................................................ 88
SECTION 6.17. Leases.................................................................................. 89
SECTION 6.18. Change of Office........................................................................ 89
SECTION 6.19. Change of Name.......................................................................... 89
SECTION 6.20. Transactions with Affiliates............................................................ 89
SECTION 6.21. Sale and Leaseback...................................................................... 89
SECTION 6.22. Capital Expenditures; Other Purchases of Assets......................................... 90
SECTION 6.23. Unrelated Activities; Abandonment....................................................... 90
SECTION 6.24. Set-off................................................................................. 90
PAGE
SECTION 6.25. Intentionally Omitted................................................................... 90
SECTION 6.26. Subsidiaries............................................................................ 90
SECTION 6.27. Concentration of Cash................................................................... 91
SECTION 6.28. Amendments, etc. of Organizational and Other Documents.................................. 91
SECTION 6.29. Immunity................................................................................ 91
SECTION 6.30. Restrictive Agreements.................................................................. 92
SECTION 6.31. Minimum Cumulative Net Revenue.......................................................... 92
SECTION 6.32. Minimum Present Value Coverage Ratio.................................................... 93
ARTICLE VII
EVENTS OF DEFAULT.................................................................. 93
ARTICLE VIII
ACCOUNTS........................................................................... 98
SECTION 8.1. Creation of Accounts..................................................................... 98
SECTION 8.2. Required Deposits into the Accounts...................................................... 98
SECTION 8.3. Deposits Held as Cash Collateral.........................................................100
SECTION 8.4. Source of Payments; Deposits Irrevocable.................................................101
SECTION 8.5. Books of Account; Statements.............................................................101
SECTION 8.6. Location of the Accounts.................................................................101
SECTION 8.7. Receipt by the Borrower..................................................................101
SECTION 8.8. Construction Account.....................................................................101
SECTION 8.9. Presale Proceeds Account.................................................................102
SECTION 8.10. Revenue Account.........................................................................103
SECTION 8.11. Debt Reserve Account....................................................................105
SECTION 8.12. Supplemental Debt Reserve Account.......................................................106
SECTION 8.13. Operating Reserve Account...............................................................106
SECTION 8.14. Current Account.........................................................................106
SECTION 8.15. Maintenance Reserve Account.............................................................106
SECTION 8.16. Repair and Restoration Reserve Account..................................................106
SECTION 8.17. Capital Expenditure Account.............................................................107
SECTION 8.18. Rebate Account..........................................................................107
SECTION 8.19. Insurance Proceeds Account..............................................................108
SECTION 8.20. Special Payment Account.................................................................109
SECTION 8.21. Sales and Issuances Proceeds Account....................................................109
SECTION 8.22. Excess Revenue Account..................................................................110
SECTION 8.23. Permitted Sources Account...............................................................111
SECTION 8.24. Delivery of Officer's Certificates; Timing of Payments..................................111
SECTION 8.25. Release of Excess Amounts...............................................................111
SECTION 8.26. Event of Default........................................................................112
SECTION 8.27. Investment..............................................................................112
SECTION 8.28. Statements of Accounts..................................................................112
SECTION 8.29. Value...................................................................................113
PAGE
SECTION 8.30. Other Determinations....................................................................113
SECTION 8.31. Sales of Permitted Investments..........................................................113
SECTION 8.32. Available Cash..........................................................................113
SECTION 8.33. Termination.............................................................................113
ARTICLE IX
THE ADMINISTRATIVE AGENT...........................................................113
ARTICLE X
THE COLLATERAL TRUSTEE.............................................................116
SECTION 10.1. Appointment of Collateral Trustee.......................................................116
SECTION 10.2. Actions Etc. Under Financing Documents..................................................116
SECTION 10.3. Exculpatory Provisions..................................................................119
SECTION 10.4. Reliance by Collateral Trustee..........................................................120
SECTION 10.5. Supplemental Provisions Relating to the Collateral Trustee..............................121
SECTION 10.6. Limitations and Duties of Collateral Trustee............................................122
SECTION 10.7. Proceeds to be Held in Trust............................................................122
SECTION 10.8. Resignation and Removal of the Collateral Trustee.......................................123
SECTION 10.9. Status of Successor Collateral Trustee..................................................124
SECTION 10.10. Merger of the Collateral Trustee.......................................................124
SECTION 10.11. Appointment of Separate or Co-Collateral Trustee.......................................124
SECTION 10.12. Treatment of Payee or Indorsee by Collateral Trustee;
Representatives of Secured Parties.................................................124
SECTION 10.13. Indemnification; Fees..................................................................125
SECTION 10.14. Representation and Warranties of the Collateral Trustee................................126
SECTION 10.15. Release of Collateral..................................................................127
ARTICLE XI
MISCELLANEOUS......................................................................127
SECTION 11.1. Notices.................................................................................127
SECTION 11.2. Waivers; Amendments.....................................................................127
SECTION 11.3. Expenses; Indemnity; Damage Waiver......................................................129
SECTION 11.4. Successors and Assigns; Consent and Agreement...........................................131
SECTION 11.5. Survival................................................................................133
SECTION 11.6. Counterparts; Integration; Effectiveness................................................133
SECTION 11.7. Severability............................................................................133
SECTION 11.8. Right of Setoff.........................................................................134
SECTION 11.9. GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS......................................................................134
PAGE
SECTION 11.10. Waiver of Sovereign Immunity...........................................................135
SECTION 11.11. Judgment Currency......................................................................136
SECTION 11.12. Damage Waiver..........................................................................136
SECTION 11.13. WAIVER OF JURY TRIAL...................................................................136
SECTION 11.14. Headings...............................................................................136
SECTION 11.15. Replacement of Independent Engineer....................................................136
SECTION 11.16. Confidentiality........................................................................136
SCHEDULES:
Schedule 1.1(a) -- Presale Proceeds
Schedule 1.1(b) -- Original Configuration of the FLAG System
Schedule 1.1(c) -- Present Value Coverage Ratios
Schedule 2.1 -- Commitments; Addresses
Schedule 2.7(b) -- Term Loan Amortization; Principal Payment Dates
Schedule 3.6(a) -- Capital Structure
Schedule 3.6(b) -- Subsidiaries
Schedule 3.7(b) -- Governmental Actions and Rights-of-Way
Schedule 3.9 -- Litigation
Schedule 3.11(b) -- Collateral Recordings and Filings
Schedule 3.19(b) -- Contractual Obligations
Schedule 3.26 -- Available Capacity
Schedule 5.9 -- Insurance
Schedule 8.10(b) -- Contingent Amortization
EXHIBITS:
Exhibit A-1 -- Form of Revolving Credit Note
Exhibit A-2 -- Form of Term Note
Exhibit B-1 -- Form of Borrowing Request (Revolving Credit Loans)
Exhibit B-2 -- Form of Borrowing Request (Term Loans)
Exhibit C -- Form of Borrowing Certificate
Exhibit D -- Form of Continuation/Conversion Notice
Exhibit E -- Form of Borrower Security Agreement
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Intentionally Omitted
Exhibit H -- Intentionally Omitted
Exhibit I-1 -- Form of Contractor Consent
Exhibit I-2 -- Form of AT&T Guaranty Consent
Exhibit I-3 -- Form of BANS Consent
Exhibit I-4 -- Form of Xxxx Atlantic Shareholder Consent
Exhibit I-5 -- Form of KDD Guaranty Consent
Exhibit J -- Intentionally Omitted
Exhibit K -- Form of Construction Cost Certificate
Exhibit L -- Intentionally Omitted
Exhibit M -- Form of Assignment and Acceptance
Exhibit N-1 -- Form of Opinion of Xxxxxx, Xxxxx & Bockius LLP, New York
counsel to the Borrower
Exhibit N-2 -- Form of Opinion of Xxxxxx Xxxxx, Esq., in-house counsel to the Borrower
Exhibit N-3 -- Form of Opinion of Xxxxxx, Westwood & Riegels, British Virgin
Islands counsel to Xxxxxxxx
Exhibit N-4 -- Form of Opinion of Xxxxxxx, Xxxxxxxx & Xxxxx, Bermuda counsel to
Marubeni Telecom
Exhibit N-5 -- Form of Opinion of Xxxxxx X. Xxxxxxxxx, Xx., Esq., in-house counsel to
Marubeni Telecom
Exhibit N-6 -- Form of Opinion of X.X. Xxxxxx & Company, Cayman Islands counsel to
AIF
Exhibit N-7 -- Form of Opinion of Xxxxx & XxXxxxxx, Thai counsel to KIN
Exhibit N-8 -- Form of Opinion of Xxxx Xxxx, Esq., in-house counsel to the Xxxx Atlantic
Shareholder
Exhibit N-9 -- Form of Opinion of Xxxxxxx Xxxxxxxx, Esq., in-house counsel to AT&T
Capital
Exhibit N-10 -- Form of Opinion of Xxxxxx Xxxxxx, Esq., in-counsel to GE Capital
Exhibit N-11 -- Form of Opinion of Mello, Hollis, Xxxxx & Xxxxxx, Bermuda counsel to
GE Capital
Exhibit N-12 -- Form of Opinion of Mello, Hollis, Xxxxx & Xxxxxx, Bermuda counsel to
the Collateral Trustee
Exhibit N-13 -- Form of Opinion of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel to the
Lenders
Exhibit O -- Form of Contractor Escrow Agreement
Exhibit P -- Form of Registrar and Transfer Agent Agreement
Exhibit Q -- Form of Expense Certificate
CREDIT AGREEMENT, dated as of January 28, 1998 (as amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), among
FLAG LIMITED, a company organized and existing under the laws of Bermuda (the
"BORROWER"), the Term Lenders (as defined herein), the Revolving Credit Lenders
(as defined herein; and together with the Term Lenders, the "LENDERS"), BARCLAYS
BANK PLC, as administrative agent for the Lenders (in such capacity, the
"ADMINISTRATIVE AGENT"), and INTERNATIONAL TRUST COMPANY OF BERMUDA LIMITED, as
collateral trustee (in such capacity, the "COLLATERAL TRUSTEE").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in Section 1.1 of this
Agreement;
WHEREAS, the Borrower (a) has developed and constructed a
fiberoptic submarine cable system to furnish digital transmission facilities
between and among points in the United Kingdom, Spain, Italy, Egypt, the United
Arab Emirates, India, Thailand, Malaysia, Hong Kong, the People's Republic of
China, the Republic of Korea and Japan (the "FLAG SYSTEM") and (b) proposes to
sell capacity on the FLAG System to telecommunications carriers;
WHEREAS, in order to provide for the construction and
installation of the FLAG System, the Borrower entered into the Construction
Contract with TSS, KDD-SCS and Marubeni;
WHEREAS, TSS and KDD-SCS have physically completed the
construction and installation of the FLAG System and the Certificate of
Provisional System Acceptance has been issued under the Construction Contract in
respect thereof;
WHEREAS, the Borrower, the Landing Party PTTs and the
Participating PTTs have executed and delivered the C&MA which sets forth, among
other things, the terms and conditions upon which the FLAG System has been
constructed and will be owned, maintained and operated;
WHEREAS, the Borrower has requested the Lenders to provide
certain extensions of credit hereunder in order to (a) refinance the Borrower's
existing senior secured indebtedness, (b) redeem the Existing Preferred Stock,
(c) pay for certain transaction, legal and other expenses, (d) provide for all
remaining FLAG System construction costs and (e) provide a working capital
facility, all in accordance with the terms hereof; and
WHEREAS, in furtherance of the foregoing and in order to
secure and support the Borrower's obligations to the Lenders under the Financing
Documents, the
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Borrower and the Shareholders (other than Gulf) will enter into the Security
Documents;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, including in the
preamble hereto, the following terms shall have the meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ACCOUNTS" shall be the collective reference to the Revenue Account,
the Current Account, the Construction Account, the Presale Proceeds Account, the
Debt Reserve Account, the Supplemental Debt Reserve Account, the Operating
Reserve Account, the Insurance Proceeds Account, the Special Payment Account,
the Sales and Issuances Proceeds Account, the Repair and Restoration Reserve
Account, the Capital Expenditure Account, the Maintenance Reserve Account, the
Excess Revenue Account, the Rebate Account, the Permitted Sources Account and
each other account, together with each sub-account of such accounts, established
and maintained pursuant to Article VIII.
"ADDITIONAL CONTRACT" shall mean each contract entered into by the
Borrower or any Subsidiary thereof after the Closing Date (other than employment
contracts and contracts involving less than $1,000,000 annually).
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" shall have the meaning ascribed thereto in the
preamble, together with each of its successors hereunder.
"AFFILIATE" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or
3
is under common Control with the Person specified.
"AGREEMENT" shall have the meaning ascribed thereto in the preamble.
"AGREEMENT FOR THE MAINTENANCE OF PACIFIC OCEAN CABLE SYSTEMS IN THE
YOKOHAMA ZONE" shall mean the Agreement for the Maintenance of Pacific Ocean
Cable Systems in the Yokohama Zone, dated March 11, 1997, between and among
AT&T, KDD, the Borrower, and other Persons from time to time parties thereto, as
amended, supplemented or otherwise modified prior to the Closing Date and as the
same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
"AGREEMENT FOR THE MAINTENANCE OF THE FLAG SUBMARINE CABLE SYSTEM"
shall mean Agreement No. 136H-96 for Maintenance & Repair of FLAG Submarine
Cable System, dated November 1, 1997, between Emirates Telecommunications
Corporation and the Borrower, as amended, supplemented or otherwise modified
prior to the Closing Date and as the same may be further amended, supplemented
or otherwise modified from time to time in accordance with the terms of this
Agreement.
"AIF" shall mean the Asian Infrastructure Fund, a corporation organized
and existing under the laws of the Cayman Islands.
"AIF/DRESDNER SUBORDINATED PLEDGE AGREEMENT" shall mean the Pledge
Agreement, dated as of June 30, 1995, between AIF and Dresdner Bank AG, New York
Branch, as amended, supplemented or otherwise modified prior to the Closing
Date.
"AIF/NYNEX CORPORATION SUBORDINATED PLEDGE AGREEMENT" shall mean the
Pledge Agreement, dated as of June 30, 1995, between AIF and NYNEX Corporation,
as amended, supplemented or otherwise modified prior to the Closing Date.
"AIF PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as of the
date hereof, substantially in the form of Exhibit F, made by AIF in favor of the
Collateral Trustee, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms of this Agreement.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until such time as the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the
4
Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"APPLICABLE LAWS" shall mean all Requirements of Law, all Governmental
Actions and all applicable laws, statutes, treaties, rules, codes, ordinances,
regulations, certificates, orders, interpretations, licenses and permits of any
Governmental Authority and judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment).
"APPLICABLE MARGIN" shall mean, for any day, with respect to any ABR
Loan or Eurodollar Loan, the applicable rate per annum set forth below under the
caption "ABR Spread" or "Eurodollar Spread", as the case may be:
ABR Spread Eurodollar Spread
---------- -----------------
0.90% 1.90%
PROVIDED that the Applicable Margins set forth above shall be increased by
0.225% on and after the date which is five years after the Closing Date.
"APPLICABLE PERCENTAGE" shall mean, with respect to any Lender at any
time of determination, the percentage of the total unused Commitments and
outstanding Loans represented by such Lender's unused Commitments and
outstanding Loans. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.
"APPROVED FUND" shall mean, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"ARRANGER" shall mean Barclays Bank PLC.
"ASSIGNED AGREEMENTS" shall be the collective reference to each
agreement which is being assigned by the Borrower or any Subsidiary of the
Borrower to the Collateral Trustee pursuant to any Security Document.
"ASSIGNMENT AND ACCEPTANCE" shall mean any assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent in
5
accordance with Section 11.4, substantially in the form of Exhibit M or any
other form approved by the Administrative Agent.
"ATLANTIC CABLE MAINTENANCE AGREEMENT" shall mean the Atlantic Cable
Maintenance And Repair Agreement, dated January 1, 1998, between and among AT&T,
British Telecommunications plc, the Borrower and the other Persons from time to
time parties thereto, as amended, supplemented or otherwise modified prior to
the Closing Date and as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Agreement.
"AT&T" shall mean AT&T Corp., a New York corporation, and its
successors.
"AT&T CAPITAL" shall mean AT&T Capital Corporation, a Delaware
corporation.
"AT&T CAPITAL PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated
as of the date hereof, substantially in the form of Exhibit F, made by AT&T
Capital in favor of the Collateral Trustee, for the benefit of the Secured
Parties, as amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"AT&T CONSTRUCTION CONTRACT GUARANTY" shall mean the Guaranty, dated as
of December 14, 1994, made by AT&T in favor of the Borrower, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"AT&T GUARANTY CONSENT" shall mean the Consent to Assignment, dated as
of the date hereof, made by AT&T in favor of the Collateral Trustee,
substantially in the form of Exhibit I-2, as amended, supplemented or otherwise
modified from time to time in accordance with the terms of this Agreement.
"BANS" shall mean Xxxx Atlantic Network Systems (Bermuda) Limited, a
corporation organized and existing under the laws of Bermuda, formerly known as
NNS (Bermuda) Limited.
"BANS CONSENT" shall mean the Consent to Assignment, dated as of the
date hereof, made by BANS in favor of the Collateral Trustee, substantially in
the form of Exhibit I-3, as amended, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
"BASIC SYSTEM MODULES" shall have the meaning ascribed thereto in the
C&MA.
"XXXX ATLANTIC CORPORATION" shall mean Xxxx Atlantic Corporation, a
Delaware corporation.
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"XXXX ATLANTIC SHAREHOLDER" shall mean NYNEX Network Systems Company, a
Delaware corporation, and a wholly-owned subsidiary of Xxxx Atlantic
Corporation.
"XXXX ATLANTIC SHAREHOLDER CONSENT" shall mean the Consent to
Assignment, dated as of the date hereof, made by the Xxxx Atlantic Shareholder
in favor of the Collateral Trustee, substantially in the form of Exhibit I-4, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms of this Agreement.
"XXXX ATLANTIC SHAREHOLDER PLEDGE AGREEMENT" shall mean the Pledge
Agreement, dated as of the date hereof, substantially in the form of Exhibit F,
made by the Xxxx Atlantic Shareholder in favor of the Collateral Trustee, for
the benefit of the Secured Parties, as amended, supplemented or otherwise
modified from time to time in accordance with the terms of this Agreement.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" shall have the meaning ascribed thereto in the preamble.
"BORROWER PLEDGE AGREEMENTS" shall be the collective reference to each
pledge agreement executed and delivered by the Borrower in accordance with
Section 6.26, as each may be amended, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
"BORROWER SECURITY AGREEMENT" shall mean the Security Agreement, dated
as of the date hereof, substantially in the form of Exhibit E, made by the
Borrower in favor of the Collateral Trustee, for the benefit of the Secured
Parties, as amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"BORROWER'S INSURANCE CONSULTANT" shall mean Xxxxx Group, LLC.
"BORROWING" shall mean Loans of the same Class and Type, made,
converted or continued on the same date and as to which a single Interest Period
is in effect.
"BORROWING CERTIFICATE" shall mean a certificate of the Borrower,
substantially in the form of Exhibit C, executed by a Responsible Officer of the
Borrower.
"BORROWING REQUEST" shall mean a notice from the Borrower, executed by
a Responsible Officer of the Borrower, substantially in the form of (a) Exhibit
B-1, in the
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case of a request for the making of Revolving Credit Loans and (b) Exhibit B-2,
in the case of a request for the making of Term Loans.
"BRANCHING UNIT" shall have the meaning ascribed thereto in the C&MA.
"BUSINESS DAY" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED that, when used in connection with a
Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"C&MA" shall mean the Construction and Maintenance Agreement, dated as
of December 14, 1994, among the Borrower, the Original Landing Party PTTs and
the Participating PTTs from time to time parties thereto, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"CAPACITY" shall have the meaning ascribed to the term "Design
Capacity" in the C&MA.
"CAPACITY PAYMENTS" shall mean the cash payments in Dollars that the
PTTs are obligated to make to the Borrower pursuant to Capacity Sales
Agreements.
"CAPACITY SALES AGREEMENTS" shall mean all agreements for the sale,
lease or other disposition of Capacity (including for non-cash consideration
pursuant to Capacity swap arrangements and agreements for mutual restoration)
entered into between the Borrower and any other Person, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"CAPITAL EXPENDITURE ACCOUNT" shall mean the special account designated
by that name established by the Collateral Trustee pursuant to Article VIII.
"CAPITAL EXPENDITURE MAXIMUM BALANCE" shall mean $35,000,000.
"CAPITAL LEASE OBLIGATIONS" of any Person, shall mean the obligation 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.
8
"CAPITAL STOCK" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, and any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASUALTY PROCEEDS" shall mean all payments and proceeds of each
insurance policy maintained by the Borrower or any Subsidiary thereof and all
compensation, award, damages or other payments or relief in respect of any
taking of, or in respect of casualty to or loss of, property, but excluding
business interruption insurance and payments in respect of liability policies.
"CASUALTY PROCEEDS DEPOSITS" shall have the meaning ascribed thereto in
Section 8.19(a).
"CERTIFICATE OF FINAL SYSTEM ACCEPTANCE" shall have the meaning
ascribed thereto in the Construction Contract.
"CERTIFICATE OF PROVISIONAL SYSTEM ACCEPTANCE" shall have the meaning
ascribed thereto in the Construction Contract.
"CHANGE IN CONTROL" shall mean and shall be deemed to have occurred if
any of the following occurs: (a) Xxxx Atlantic Corporation shall cease to
directly or indirectly own at least 20% of the issued and outstanding voting
stock of the Borrower, free and clear of all Liens, other than the Liens created
by the Security Documents or (b) Marubeni shall cease to directly or indirectly
own at least 5% of the issued and outstanding voting stock of the Borrower, free
and clear of all Liens, other than the Liens created by the Security Documents.
"CHANGE IN LAW" shall mean (a) the adoption of any law, rule or
regulation after the Closing Date, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the Closing Date or (c) compliance by any Lender or any parent of any
Lender with any request, guideline or directive of any Governmental Authority
made or issued after the Closing Date (whether or not having the force of law).
"CLASS" when used in reference to any Loan or Borrowing, refers to
whether such Loan is part of, or the Loans comprising such Borrowing are,
Revolving Credit Loans or Term Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Credit Commitment
or a Term Loan Commitment.
9
"CLOSING DATE" shall mean the date on which this Agreement shall have
been executed and delivered by the parties hereto and the conditions specified
in Section 4.1 are satisfied or waived as evidenced by the making of the Term
Loans.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall be the collective reference to (a) the "Collateral"
as such term is defined in any Security Agreement, (b) the Pledged Stock and (c)
all other property, if any, in which a security interest is, or is purported to
be, granted to secure the Obligations (or any portion thereof).
"COLLATERAL TRUSTEE" shall have the meaning ascribed thereto in the
preamble, together with each of its successors hereunder.
"COMMITMENTS" shall mean the Revolving Credit Commitments or the Term
Loan Commitments, or a combination thereof (as the context requires).
"COMMONLY CONTROLLED ENTITY" shall mean, as to any Person, an entity,
whether or not incorporated, which is under common control with such Person
within the meaning of Section 4001 of ERISA or is part of a group which includes
such Person and which is treated as a single employer under Section 414 of the
Code.
"CONSENTS" shall be the collective reference to the Contractor Consent,
the AT&T Guaranty Consent, the KDD Guaranty Consent, the Xxxx Atlantic
Shareholder Consent, the BANS Consent and each other consent to assignment, in
form and substance satisfactory to the Administrative Agent, to be executed and
delivered by each party (other than the Borrower) to any Additional Contract
which may be obtained and delivered to the Administrative Agent in accordance
with Section 6.12.
"CONSOLIDATED EBITDA" shall mean, for any period, the revenues of the
Borrower and its Subsidiaries for such period from continuing operations, minus
associated costs (including cost of sales but excluding Interest Expense, income
taxes, depreciation and amortization), determined in each case on a consolidated
basis in accordance with GAAP.
"CONSTRUCTION ACCOUNT" shall mean the special account designated by
that name established by the Collateral Trustee pursuant to Article VIII.
"CONSTRUCTION CONTRACT" shall mean the FLAG Cable System Terms and
Conditions of Contract, dated as of December 14, 1994, among the Borrower, TSS,
KDD-SCS and Marubeni (including all schedules and appendices thereto), as
amended, supplemented or otherwise modified prior to the Closing Date and as the
10
same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
"CONSTRUCTION CONTRACT GUARANTEES" shall be the collective reference to
the AT&T Construction Contract Guaranty and the KDD Construction Contract
Guaranty.
"CONSTRUCTION CONTRACT GUARANTORS" shall be the collective reference to
AT&T and KDD.
"CONSTRUCTION COST CERTIFICATE" shall have the meaning ascribed thereto
in Section 4.1(x).
"CONSULTANTS" shall be the collective reference to the Independent
Engineer and the Market Consultant.
"CONTEST" shall mean, with respect to any tax, Lien, claim or
obligation, a contest with respect thereto pursued in good faith and by
appropriate and timely proceedings diligently conducted, so long as (a) no Lien
(other than Permitted Liens) shall have been filed in connection therewith or
any Lien (other than Permitted Liens) filed in connection therewith shall have
been fully removed from the record by the bonding thereof, (b) except with
respect to any Lien that has been removed from the record by the bonding thereof
in accordance with clause (a), adequate reserves (which shall be in cash unless
the Administrative Agent otherwise agrees) shall have been established with
respect to such tax, Lien, claim or obligation, (c) during the period of such
contest the enforcement of any contested item is effectively stayed, (d) such
contest could not reasonably be expected to involve any material danger of the
sale, forfeiture or loss of any of the Pledged Stock or any material part of the
other Collateral or the Project, title thereto or any interest therein and will
not cause a material interference with any Project Activity and (e) the failure
to pay such tax, Lien, claim or obligation during the pendency of such contest
could not reasonably be expected to have a Material Adverse Effect.
"CONTINUATION/CONVERSION NOTICE" shall mean a notice in the form of
Exhibit D, executed by a Responsible Officer of the Borrower.
"CONTRACT VARIATIONS" shall mean any amendment, supplement or other
modification to the Construction Contract and shall include any "Contract
Variation" as such term is defined in the Construction Contract.
"CONTRACTOR CONSENT" shall mean the Consent to Assignment, dated as of
the date hereof, substantially in the form of Exhibit I-1, made by the
Contractors in favor of the Collateral Trustee, as amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Agreement.
11
"CONTRACTOR ESCROW ACCOUNT" shall mean the special account designated
by that name established by the Contractor Escrow Agent pursuant to the
Contractor Escrow Agreement.
"CONTRACTOR ESCROW AGENT" shall mean Barclays Bank PLC, in its capacity
as escrow agent under the Contractor Escrow Agreement.
"CONTRACTOR ESCROW AGREEMENT" shall mean the Escrow Agreement, dated as
of the Closing Date, substantially in the form of Exhibit O, among the Borrower,
the Contractors and the Contractor Escrow Agent, as amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Agreement.
"CONTRACTORS" shall be the collective reference to TSS, KDD-SCS and
Marubeni (as to Marubeni, solely in its capacity as a nominal supplier under the
Construction Contract).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or any agreement, instrument, judgment,
order, decree or other undertaking to which such Person is a party or by which
it or any of its property is bound.
"CONTROL" shall mean the possession, directly or indirectly, of (a) the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise and/or (b) the ownership of 10% or more of the securities having
ordinary voting power for the election of directors of a Person. "CONTROLLING"
and "CONTROLLED" have meanings correlative thereto.
"CUMULATIVE NET REVENUE" shall mean, for any period, the sum of (a) the
aggregate amount of Capacity Payments received during such period (plus up to
$4.5 million of Capacity Payments received prior to such period which did not
constitute Presale Proceeds) in respect of the sale, lease and/or other
disposition of Capacity which are not subject to return to the applicable PTT
(net of sales commissions, Landing Party commissions and Taxes payable with
respect thereto and net of any amount received which is subject to a rebate
obligation), MINUS (b) the aggregate amount of Presale Proceeds received during
such period, PLUS (c) the aggregate amount of Restoration Payments received
during such period (net of any amount received which is subject to a rebate
obligation), PLUS (d) the aggregate amount of Standby Maintenance Payments
received during such period, MINUS (e) the aggregate amount of Operating
Expenses (net of repair maintenance expenses and restoration
12
expenses reimbursed by third parties or paid out of the Repair and Restoration
Account) and capital expenditures paid (other than capital expenditures paid
with amounts on deposit in the Capital Expenditure Account) in respect of each
calendar year occurring prior to the date on which "Cumulative Net Revenue" is
calculated, in each case only to the extent such amounts were paid in accordance
with the then current Operating Budget or otherwise permitted hereunder, MINUS
(f) the aggregate amount transferred to the Capital Expenditure Account in
accordance with Section 8.10(a)(iii) in respect of each calendar year occurring
prior to the date on which "Cumulative Net Revenue" is calculated, MINUS (g) an
amount equal to a proportionate share of the Operating Expenses (net of repair
maintenance expenses and restoration expenses reimbursable by third parties) and
capital expenditures set forth in the then current Operating Budget (25% of such
amounts for each calendar quarter since the end of the previous fiscal year),
PLUS (h) the aggregate amount of Presale Proceeds received during the period
prior to the date on which "Cumulative Net Revenue" is calculated which were
used during such period to prepay the Term Loans, PLUS (i) the aggregate amount
of the Term Loans, if any, prepaid during such period with proceeds from the
Contractor Escrow Account, the Construction Account or Capital Expenditure
Account.
"CURRENT ACCOUNT" shall mean the special account designated by that
name established by the Collateral Trustee pursuant to Article VIII.
"DEBT RESERVE ACCOUNT" shall mean the special account designated by
that name established by the Collateral Trustee pursuant to Article VIII.
"DEBT RESERVE REQUIRED BALANCE" shall mean, as of any date of
determination, an amount (not less than zero) equal to the difference between
(a) the Gross Debt Reserve Required Amount at such time and (b) the aggregate
amount of the Revolving Credit Commitments at such time. The aggregate amount of
the Revolving Credit Commitments shall be computed for purposes of this
definition by taking into account any limitation of the Revolving Credit
Commitments pursuant to Section 2.6(e).
"DEFAULT" shall mean any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DESIGN DOCUMENTS" shall be the collective reference to each document
which justifies the Project (or any portion thereof) as meeting the requirements
and specifications set forth in the Construction Contract and/or the C&MA.
"DESIGNATED EVENT" shall mean, as of any date of determination, the
failure of the Borrower and its Subsidiaries to be in compliance with Section
6.31 or 6.32 as of such date, as set forth in the certificate delivered by the
Borrower to the Administrative Agent
13
and the Collateral Trustee in accordance with Section 5.2(b), or the failure of
the Borrower to deliver such certificate when required.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"ENVIRONMENTAL LAWS" shall mean any and all international, national,
state, local or municipal treaties, laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, permits or requirements of any Governmental
Authority relating to the protection of the environment, natural resources or
human health, including, but not limited to, those relating to emissions,
discharge, Releases or threatened Releases of Hazardous Materials into the
environment including, without limitation, ambient air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as now or hereafter in effect.
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
thereof directly or indirectly resulting from or based upon (a) a violation of
any Environmental Law or (b) the release or threatened release of any Hazardous
Materials into the environment.
"EOL COMPLIANCE CERTIFICATE" shall have the meaning ascribed thereto in
Section 5.19(a).
"EQUITY SUBSCRIPTION AGREEMENT" shall mean the FLAG Equity Subscription
Agreement, dated as of June 15, 1995, among the Xxxx Atlantic Shareholder,
Marubeni Telecom, Xxxxxxxx, AIF, KIN and the Borrower, as amended, supplemented
or otherwise modified prior to the Closing Date and as the same may be further
amended, supplemented or otherwise modified from time to time in accordance with
the terms of this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" shall mean any entity (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043(c)
14
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived under applicable PBGC
regulations); (b) the failure to make a required contribution to any Plan
sufficient to give rise to a lien under Section 302(f) of ERISA; (c) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the taking of any steps by the Borrower or any of its
ERISA Affiliates to terminate any Plan, if such termination could result in any
liability under Title IV of ERISA with respect to such Plan; (f) the receipt by
the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (g) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal, within the meaning of Section 4063 of ERISA, from any
multiple-employer Plan; or (h) the receipt by the Borrower or any ERISA
Affiliate of any notice from any Multiemployer Plan concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EURODOLLAR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" shall mean the occurrence of any of the events
specified in Article VII, PROVIDED that any requirement for the giving of
notice, the lapse of time or both, or for the happening of any other condition,
has been satisfied.
"EVENT OF LOSS" shall mean (a) the actual or constructive total loss
(by way of condemnation, expropriation or otherwise) of all or substantially all
of the Project or any Segment of the FLAG System, (b) the loss, destruction,
damage or constructive loss of a material portion of the Project or any Segment
of the FLAG System (by way of condemnation, expropriation or otherwise), (c) the
cessation or material impairment of the operation of the Project or any Segment
of the FLAG System for a period greater than 90 days or (d) the occurrence of
one or more judgments or decrees being entered in the form of an injunction or
similar form of relief requiring suspension or abandonment of a portion of the
Project and the failure of the Borrower to have such injunction or similar form
of relief stayed or discharged within 60 days.
"EXCESS CASH FLOW" shall mean, for each quarterly period ending on a
Principal Payment Date (or, with respect to the Initial Principal Payment Date,
the period from the Closing Date to the Initial Principal Payment Date), all
cash revenue received by the Borrower during such period and available after the
application of clauses first through seventh of Section 8.10(b) in accordance
with the terms of Article VIII.
15
"EXCESS CASH FLOW ACCOUNT" shall have the meaning ascribed thereto in
Section 6.27.
"EXCESS REVENUE ACCOUNT" shall mean the special account designated by
that name established by the Collateral Trustee pursuant to Article VIII.
"EXCHANGE NOTES" shall mean the promissory notes issued by the Borrower
in exchange for the Unregistered Notes (in an aggregate principal amount not to
exceed the aggregate principal amount of the Unregistered Notes being exchanged
and with terms identical in all material respects to those of the Unregistered
Notes except that the Exchange Notes will not contain terms with respect to
transfer restrictions) as contemplated by the Senior Unsecured Note Offering
Memorandum.
"EXCHANGE OFFER" shall mean the offer by the Borrower to exchange the
Exchange Notes for the Unregistered Notes as contemplated by the Senior
Unsecured Note Offering Memorandum.
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent,
the Collateral Trustee, the Arranger or any Lender (a) income or franchise taxes
imposed on (or incurred by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which such Lender, the Administrative Agent or the Collateral
Trustee, as the case may be, is located and (c) in the case of a Lender, any
withholding Tax that is attributable to such Lender's failure to comply with
Section 2.15(e).
"EXISTING AT&T CAPITAL STOCK PURCHASE AGREEMENT" shall mean the Stock
Purchase Agreement, dated as of December 28, 1995, between the Borrower and AT&T
Capital, as amended, supplemented or otherwise modified prior to the Closing
Date.
"EXISTING COLLATERAL TRUSTEE" shall mean International Trust Company of
Bermuda Limited, a company organized and existing under the laws of Bermuda, as
collateral trustee under the Existing Participation Agreement and certain of the
Existing Financing Documents.
"EXISTING EQUITY CONTRIBUTION AGREEMENTS" shall have the meaning
ascribed to the term "Equity Contribution Agreements" in Annex A to the Existing
Participation Agreement.
16
"EXISTING FINANCING DOCUMENTS" shall have the meaning ascribed to the
term "Financing Documents" in Annex A to the Existing Participation Agreement.
"EXISTING GE CAPITAL STOCK PURCHASE AGREEMENT" shall mean the Stock
Purchase Agreement, dated as of October 19, 1995, between the Borrower and GE
Capital, as amended, supplemented or otherwise modified prior to the Closing
Date.
"EXISTING PARTICIPATION AGREEMENT" shall mean the Amended and Restated
Participation Agreement, dated as of October 19, 1995, among the Borrower, the
Existing Collateral Trustee, the lenders from time to time parties thereto as
Tranche A Lenders, the lenders from time to time parties thereto as Tranche B
Lenders, the lenders from time to time parties thereto as Tranche C Lenders,
Barclays Bank PLC, New York Branch, as Tranche A Administrative Agent and
Tranche C Administrative Agent, Marubeni Corporation, as Tranche B
Administrative Agent and Canadian Imperial Bank of Commerce, New York Agency, as
Documentation Agent, as amended, supplemented or otherwise modified prior to the
Closing Date.
"EXISTING PREFERRED SHAREHOLDERS" shall mean GE Capital and AT&T
Capital.
"EXISTING PREFERRED STOCK" shall mean all of the issued and outstanding
shares of preferred stock of the Borrower as of the Closing Date (before giving
effect to the consummation of the Refinancing).
"EXISTING PREFERRED STOCK DOCUMENTS" shall be the collective reference
to the Existing Stock Purchase Agreements and each other document to which any
Existing Preferred Shareholder is a party to or which was otherwise executed in
connection with any Existing Preferred Shareholders' acquisition of any Existing
Preferred Stock.
"EXISTING SPONSOR SUBORDINATED PLEDGE AGREEMENTS" shall be the
collective reference to the AIF/NYNEX Corporation Subordinated Pledge Agreement,
the AIF/Dresdner Subordinated Pledge Agreement and the Xxxxxxxx/NYNEX
Corporation Subordinated Pledge Agreement.
"EXISTING STOCK PURCHASE AGREEMENTS" shall be the collective reference
to the Existing GE Capital Stock Purchase Agreement and the Existing AT&T
Capital Stock Purchase Agreement.
"EXPENSE CERTIFICATE" shall mean a certificate of the Borrower
substantially in the form of Exhibit Q.
17
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTER" shall mean the fee letter agreement, dated as of the date
hereof, among the Borrower, the Arranger and the Administrative Agent, as
amended, supplemented or otherwise modified from time to time.
"FINAL" shall, (a) as to any Governmental Action issued or transferred
to any Person, mean the status of such Governmental Action as (i) duly issued in
the name of, or validly transferred to, such Person and accepted by such Person,
(ii) in full force and effect and (iii) not then subject to any pending judicial
or administrative proceedings or (b) as to any judicial proceeding, mean the
resolution of such proceeding by a court of competent jurisdiction from which no
appeal is or can be taken. If the Applicable Law under which a Governmental
Action was issued provides for a fixed period for judicial or administrative
appeal or review thereof, such Governmental Action shall not be deemed "Final"
unless such period has expired and no petition for administrative or judicial
appeal or review has been filed.
"FINAL SYSTEM ACCEPTANCE" shall have the meaning ascribed thereto in
the Construction Contract.
"FINANCING DOCUMENTS" shall be the collective reference to this
Agreement, the Notes, the Security Documents, the Interest Hedging Agreements,
the Registrar and Transfer Agent Agreement, the Subsidiary Guarantees and the
Consents.
"FLAG SYSTEM" shall have the meaning ascribed thereto in the recitals
to this Agreement, as such system may be reconfigured or otherwise altered in
accordance with the terms of this Agreement.
"FNOC" shall have the meaning ascribed thereto in Paragraph 10.4 of the
C&MA.
"FSA DATE" shall mean the date the Certificate of Final System
Acceptance is issued in accordance with the terms of the Construction Contract
and the Financing Documents.
"GAAP" shall mean generally accepted accounting principles in the
00
Xxxxxx Xxxxxx xx Xxxxxxx, as in effect from time to time.
"GE CAPITAL" shall mean GE Capital Project Finance VI Ltd., a company
organized and existing under the laws of Bermuda.
"GE CAPITAL PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as
of the date hereof, substantially in the form of Exhibit F, made by GE Capital
in favor of the Collateral Trustee, for the benefit of the Secured Parties, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms of this Agreement.
"GOVERNMENTAL ACTION" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, claims,
orders, judgments and decrees, licenses, exemptions, publications, filings,
notices to and declarations of or with any Governmental Authority and shall
include, without limitation, all Permits (as defined in the Construction
Contract) and all construction, installation, siting, environmental and
operating permits and licenses that are required for the performance of the
Project Activities.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GROSS DEBT RESERVE REQUIRED AMOUNT" shall mean, as of any date of
determination, an amount equal to the sum of (a) 50% of all scheduled payments
of interest (based on the then current interest rates on the Loans and Senior
Unsecured Notes, as applicable, after giving effect to any principal prepayments
made on or prior to such date) and (b) 50% of all scheduled payments of
principal (before giving effect to any principal prepayments), in each case on
the Loans and the Senior Unsecured Notes during the succeeding twelve months,
PROVIDED that the amount set forth in clause (b) shall in no event exceed the
aggregate principal amount of the Loans outstanding as of such date.
"GROSS MAINTENANCE RESERVE REQUIRED AMOUNT" shall mean, as of any date
of determination, an amount (not less than zero) equal to the difference between
(a) the actual Operating Expenses for the preceding six-month period ending on
such date and (b) 50% of the aggregate of any O&M Payments received by the
Borrower during the 12-month period ending on such date (or, for any date prior
to the first anniversary of
19
the Closing Date, 50% of the aggregate of any O&M
Payments received by the Borrower prior to such date annualized to an annual
period).
"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; PROVIDED, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"GULF" shall mean Gulf Associates Communications, Ltd., a corporation
organized and existing under the laws of the British Virgin Islands.
"HAZARDOUS MATERIALS" shall mean any petroleum or petroleum products or
any chemicals, materials or substances defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants", or words of similar import, under
any applicable Environmental Law.
"HEDGING AGREEMENT" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (d) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, provided, however, that the amount of such Indebtedness shall be
20
the lesser of (x) the fair market value of such property and (y) the amount of
such Indebtedness of others, (e) all Guarantees by such Person of Indebtedness
of others, (f) all obligations of such Person constituting Capital Lease
Obligations, (g) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (h) all
obligations of such Person under any Hedging Agreement (including all Interest
Hedging Obligations) and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INDEPENDENT ENGINEER" shall mean BT Worldwide Networks or such other
engineer or engineering firm as may be appointed by the Administrative Agent in
accordance with Section 11.15.
"INITIAL PRINCIPAL PAYMENT DATE" shall mean April 30, 1998 or, if such
day is not a Business Day, the next preceding Business Day.
"INITIAL PURCHASERS" shall mean, with respect to the Unregistered
Notes, Salomon Brothers Inc, Barclays de Zoete Wedd Limited and Xxxxxx Xxxxxxx &
Co. Incorporated.
"INSURANCE PROCEEDS ACCOUNT" shall mean the special account designated
by that name established by the Collateral Trustee pursuant to Article VIII.
"INTELLECTUAL PROPERTY" shall mean, with respect to any Person, all
licenses, trademarks, tradenames, copyrights, patents, technology, know-how,
processes and other such similar agreements and all Software.
"INTEREST EXPENSE" shall mean, for any period, the amount of interest
expense, both expensed and capitalized, of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP for such period on
the aggregate principal amount of their Indebtedness determined on a
consolidated basis in accordance with GAAP.
"INTEREST HEDGING AGREEMENT" means any Hedging Agreement evidencing an
Interest Hedging Transaction.
"INTEREST HEDGING COUNTERPARTY" shall mean (a) Barclays Bank PLC, or
any agency, branch or Affiliate thereof or (b) any other financial institution
whose long-term unsecured indebtedness is rated "A" or better by S&P or "A2" or
better by Moody's, at the time of such financial institutions's entry into an
Interest Hedging Transaction with
21
the Borrower.
"INTEREST HEDGING OBLIGATIONS" shall mean all indebtedness, liabilities
and obligations of the Borrower under any agreement or agreements entered into
by the Borrower and one or more Interest Hedging Counterparties with respect to
any Interest Hedging Transaction.
"INTEREST HEDGING TRANSACTION" shall mean any interest rate swap
transaction, interest "cap" or "collar" transaction and/or any other interest
rate hedging transaction entered into by the Borrower with an Interest Hedging
Counterparty to hedge the Borrower's interest rate exposure with respect to the
Term Loans.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan,
the 30th day of each January, April, July and October, commencing with April 30,
1998 (or, if any such day is not a Business Day, the immediately preceding
Business Day) and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months' duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months' duration after the first day of such
Interest Period.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect in accordance with the terms of
this Agreement; PROVIDED that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period, (c)
Interest Periods shall be selected so that sufficient funds are available
without breakage to make scheduled amortization payments on the Loans, (d) if
the Administrative Agent elects an Interest Period under Section 2.5(e), such
Interest Period may be of any period of time and is not subject to the
restriction that it shall have a duration of either one, two, three or six
months and (e) any Interest Period that would otherwise extend beyond the
Maturity Date, shall end on the Maturity Date. For purposes hereof, the date of
a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"KDD" shall mean Kokusai Denshin Denwa Co., Ltd., a corporation
organized under the laws of Japan.
22
"KDD CONSTRUCTION CONTRACT GUARANTY" shall mean the Guaranty, dated as
of December 14, 1994, made by KDD in favor of the Borrower, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
"KDD GUARANTY CONSENT" shall mean the Consent to Assignment, dated as
of the date hereof, made by KDD in favor of the Collateral Trustee,
substantially in the form of Exhibit I-5, as amended, supplemented or otherwise
modified from time to time in accordance with the terms of this Agreement.
"KDD-SCS" shall mean KDD Submarine Cable Systems Inc., a corporation
organized under the laws of Japan and a wholly-owned subsidiary of KDD.
"KIN" shall mean K.I.N. (Thailand) Company Limited, a company organized
and existing under the laws of Thailand.
"KIN PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as of the
date hereof, substantially in the form of Exhibit F, made by KIN in favor of the
Collateral Trustee, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms of this Agreement.
"LANDING COUNTRY" shall mean, at any time of determination, each
country in which the FLAG System is landed or is planned to land at such time.
"LANDING PARTY PTTS" shall be the collective reference to the Original
Landing Party PTTs and each other PTT located in a Landing Country added
pursuant to Section 6.16 and which is designated as a "Landing Party" in the
C&MA.
"LENDERS" shall be the collective reference to the lenders listed on
the signature pages hereto, together with their respective successors and
permitted assigns hereunder.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
23
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the respective rates notified
to the Administrative Agent by each of the Reference Lenders as the rate at
which such Reference Lender is offered Dollar deposits at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period in the London interbank eurodollar market for delivery on the first day
of such Interest Period for the number of days comprised therein and in amount
comparable to the amount of its Eurodollar Loans to be outstanding during such
Interest Period.
"LIEN" shall mean, with respect to any asset (a) any mortgage,
assignment, deposit arrangement, deed of trust, lien (statutory or other),
pledge, hypothecation, encumbrance, charge, expropriation (or expropriatory
claims), security interest or similar encumbrance in, on or of such asset and
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset.
"LOANS" shall be the collective reference to the Revolving Credit Loans
and the Term Loans.
"MAINTENANCE RESERVE ACCOUNT" shall mean the special account designated
by that name established by the Collateral Trustee pursuant to Article VIII.
"MAINTENANCE RESERVE REQUIRED BALANCE" shall mean, as of any date of
determination, an amount (not less than zero) equal to the difference between
(a) the Gross Maintenance Reserve Required Amount at such time and (b) the
excess, if any, of the aggregate amount of the Revolving Credit Commitments at
such time over the Gross Debt Reserve Required Amount at such time. The
aggregate amount of the Revolving Credit Commitments shall be computed for
purposes of this definition by taking into account any limitation of the
Revolving Credit Commitments pursuant to Section 2.6(e).
"MAINTENANCE ZONE AGREEMENTS" shall be the collective reference to the
Atlantic Cable Maintenance Agreement, the Mediterranean Cable Maintenance
Agreement, the Agreement for the Maintenance of Pacific Ocean Cable Systems in
the Yokohama Zone, the South East Asia and Indian Ocean Cable Maintenance
Agreement and the Agreement for the Maintenance of the FLAG Submarine Cable
System, as each may be replaced in accordance with the terms of this Agreement
and as each may be amended, supplemented or otherwise modified from time to time
in accordance with the
24
terms of this Agreement.
"MAJORITY LENDERS" shall mean, at any time of determination, Lenders
having outstanding Revolving Credit Loans and Term Loans and unused Commitments
representing more than 51% of the sum of the aggregate outstanding Revolving
Credit Loans and Term Loans and aggregate unused Commitments at such time.
"MANAGEMENT COMMITTEE" shall mean the "MC", as such term is defined in
Paragraph 4 of the C&MA.
"MARKET CONSULTANT" shall mean Xxxxxx X. Xxxxxx Inc.
"MARKETING SERVICES AGREEMENT" shall mean the Marketing Services
Agreement, dated as of April 19, 1994, between BANS and the Borrower, as
amended, supplemented or otherwise modified prior to the Closing Date and as the
same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
"MARUBENI" shall mean the Marubeni Corporation, a Japanese corporation.
"MARUBENI TELECOM" shall mean Marubeni Telecom Development Limited, a
Bermuda corporation.
"MARUBENI TELECOM PLEDGE AGREEMENT" shall mean the Pledge Agreement,
dated as of the date hereof, substantially in the form of Exhibit F, made by
Marubeni Telecom in favor of the Collateral Trustee, for the benefit of the
Secured Parties, as amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the Project or the business, operations, condition (financial or otherwise),
property or prospects of the Borrower and its Subsidiaries taken as a whole or
the Project, (b) the ownership, use or operation of the Project, (c) the ability
of the Borrower or any of its Subsidiaries to perform its obligations under any
Financing Document, (d) the value, validity, perfection and enforceability of
the Liens granted to the Collateral Trustee under the Security Documents, or (e)
the validity or enforceability of the Financing Documents or the Principal
Project Documents (other than any Capacity Sales Agreement) or the availability
of the remedies of the Administrative Agent, the Collateral Trustee or the
Lenders under the Financing Documents; PROVIDED, HOWEVER, that an adverse change
in sales or prospective sales of Capacity based on changes or perceived changes
in external market conditions (including as a result of increased competition or
introductions or applications of new technology) will not, in and of itself,
provide a basis that an event described above has occurred.
25
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans)
in a principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Borrower in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower would be
required to pay if such Hedging Agreement were terminated at such time.
"MATURITY DATE" shall mean January 30, 2005.
"MEDITERRANEAN CABLE MAINTENANCE AGREEMENT" shall mean the
Mediterranean Cable Maintenance Agreement, dated January 1, 1993, between and
among Azienda di Stato per i Servizi Telefonici, Telefonica de Espana, S.A., the
Borrower and the other parties listed therein from time to time parties thereto,
as amended, supplemented or otherwise modified prior to the Closing Date and as
the same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
"MIUS" shall mean the minimum investment units in which Capacity is
disposed of from time to time.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean (a) with respect to the sale, transfer,
lease or other disposition of any asset (excluding Capacity), an amount
certified in reasonable detail by a Responsible Officer of the Borrower to the
Lenders as the excess, if any, of (i) the sum of cash received in connection
with such sale, transfer, lease or other disposition over (ii) the sum of (A)
amounts placed in escrow or held as a reserve against any liabilities directly
associated with such sale or disposition (except that, to the extent and as of
the time any such amounts are released from such escrow or reserve, such amounts
shall constitute Net Cash Proceeds), (B) amounts paid to minority interest
holders of such asset and the principal amount of any Indebtedness (other than
Indebtedness under this Agreement) which is secured by any such asset and which
is repaid in connection with the sale, transfer, lease or other disposition
thereof, (C) the out-of-pocket expenses incurred by the Borrower in connection
with such sale, transfer, lease or other disposition and (D) provision for taxes
payable by the Borrower and which are directly attributable to such sale,
transfer, lease or other disposition (as estimated by the Borrower in good faith
within one month of such sale to
26
be payable by the Borrower, PROVIDED that to the extent such estimate shall have
exceeded the amount of taxes actually paid, such difference shall thereupon
constitute Net Cash Proceeds), (b) with respect to the issuance of any Capital
Stock, an amount certified in reasonable detail by a Responsible Officer of the
Borrower to the Lenders as the excess of (i) the sum of the cash received in
connection with such issuance over (ii) the underwriting discounts and
commissions (if any) and other fees, out-of-pocket expenses and other costs
incurred by the Borrower in connection with such issuance and (c) with respect
to the incurrence of Indebtedness, an amount certified in reasonable detail by a
Responsible Officer of the Borrower to the Lenders as the excess of (i) the sum
of the cash received in connection with such incurrence of Indebtedness over
(ii) the fees, out-of-pocket expenses and other costs incurred by the Borrower
in connection with such incurrence of Indebtedness.
"NOTES" shall be the collective reference to the Revolving Credit Notes
and the Term Notes.
"NYNEX CORPORATION" shall mean NYNEX Corporation, a Delaware
corporation.
"O&M PAYMENTS" shall be the collective reference to the Standby
Maintenance Payments and Repair Maintenance Payments.
"OBLIGATIONS" shall mean (a) all the unpaid principal amount of, and
accrued interest on, the Loans, and all other obligations of the Borrower, any
of its Subsidiaries or any other Person to the Secured Parties (including,
without limitation, interest accruing at the then applicable rate provided for
in the Financing Documents after the maturity of the Loans and interest accruing
at the then applicable rate provided in the Financing Documents after the filing
or commencement of any bankruptcy, insolvency, reorganization or like proceeding
relating to the Borrower or any of its Subsidiaries whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of or in connection
with this Agreement, the Notes or any other Financing Document, whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all reasonable fees and
disbursements of counsel) or otherwise and (b) any extension, renewal,
refunding, or refinancing of any indebtedness referred to in clause (a) above.
"OPERATING BUDGET" shall mean an operating budget of the Borrower and
its Subsidiaries detailing anticipated costs in connection with operating the
Project (a) with respect to the initial Operating Year, which is delivered to
the Administrative Agent under Section 4.1(ac) or (b) with respect to each
ensuing Operating Year, adopted by the Borrower pursuant to Section 5.13, as
each may be amended, supplemented or otherwise modified from time to time in
accordance with Section 6.9(b).
27
"OPERATING EXPENSE TRANSFER DATE" shall have the meaning ascribed
thereto in Section 8.10(a).
"OPERATING EXPENSES" shall mean, with respect to any Operating Year,
all operation, administration and maintenance expenses with respect to the
Project which are payable by the Borrower or any Subsidiary of the Borrower in
such Operating Year, including all selling, general and administrative expenses,
all standby and repair maintenance expenses, landing site operations expense,
project management expense, insurance expense, all commissions on dispositions
of Capacity, all sales, excise and similar taxes and all other Taxes and duties
payable by the Borrower (excluding income taxes) in respect of operating the
Project; PROVIDED, HOWEVER, in no event shall "Operating Expenses" include (a)
any payments made by the Borrower to purchasers or lessees of Capacity relating
to such purchase or lease or (b) any payments made by the Borrower not related
to the transfer of Capacity or other Project Activities.
"OPERATING PROJECTIONS" shall have the meaning ascribed thereto in
Section 4.1(u).
"OPERATING RESERVE ACCOUNT" shall mean the special account designated
by that name established by the Collateral Trustee pursuant to Article VIII.
"OPERATING RESERVE MAXIMUM BALANCE" shall mean $20,000,000.
"OPERATING YEAR" shall mean each calendar year beginning with the 1998
calendar year.
"OPERATIONS AND MAINTENANCE PLAN" shall mean the plan prepared in
accordance with Paragraph 10.2 of the C&MA.
"ORIGINAL CONFIGURATION" shall mean the configuration of the Project on
the Closing Date which consists of (a) thirty-two Basic System Modules on one
fiber pair available for traffic and restoration between: the United Kingdom and
Italy, Italy and Egypt, Egypt and India, India and Thailand, Thailand and Hong
Kong, Hong Kong and the People's Republic of China, the People's Republic of
China and the Republic of Korea, and the Republic of Korea and Japan (all as set
forth and more fully described in Schedule 1.1(b)), and (b) thirty-two Basic
System Modules on a second fiber pair available for traffic and restoration
between: the United Kingdom and Spain, Spain and Italy, Italy and Egypt, Egypt
and the United Arab Emirates, the United Arab Emirates and India, India and
Malaysia, Malaysia and Thailand, Thailand and Hong Kong, Hong Kong and the
People's Republic of China, the People's Republic of China and the Republic of
Korea, and the Republic of Korea and Japan (all as set forth and more fully
28
described in Schedule 1.1(b)) , and (c) terminal stations at (and only at) the
following: Porthcurno, the United Kingdom; Estepona, Spain; Palermo, Italy;
Alexandria, Egypt; Suez, Egypt; Fujairah, the United Arab Emirates; Mumbai,
India; Penang, Malaysia; Songkhla, Thailand; Lantau Island, Hong Kong, China;
Xxx Xxx, China; Keoje, Korea; Miura, Japan; and Ninomiya, Japan.
"ORIGINAL LANDING PARTY PTTS" shall mean, collectively, the following
PTTs: (i) Cable & Wireless Communications Limited; (ii) Telefonica de Espana
S.A.; (iii) TELECOM ITALIA S.p.A.; (iv) Telecom Egypt; (v) Emirates
Telecommunications Corporation; (vi) Videsh Xxxxxxx Xxxxx Limited; (vii) Telekom
Malaysia Berhad; (viii) The Communications Authority of Thailand; (ix) Hong Kong
Telecom International Limited; (x) China Telecom; (xi) Korea Telecom; (xii)
International Digital Communications Inc.; and (xiii) KDD.
"OTHER TAXES" shall mean any and all present or future stamp or
documentary Taxes, charges or similar levies arising from any payment hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Financing Document.
"PARTICIPATING PTTS" shall mean any PTT (other than a Landing Party
PTT) who has executed a Capacity Sales Agreement and, as a result, has become a
party to the C&MA.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERFORMANCE BOND" shall mean the letter of credit, dated July 18,
1995, issued by Canadian Imperial Bank of Commerce, New York Agency, in favor of
the Existing Collateral Trustee in accordance with Article 15 of the
Construction Contract, as amended, supplemented or otherwise modified prior to
the Closing Date, as amended by the amendment thereto, dated the date hereof,
pursuant to which the Collateral Trustee became the beneficiary thereof and as
the same may be further amended, supplemented or otherwise modified, or replaced
from time to time in accordance with the terms of this Agreement.
"PERMITTED C&MA AMENDMENT" shall mean (a) any amendment to the C&MA
contemplated by Paragraph 30.3(i) of the C&MA, (b) any amendment to the C&MA to
remove a PTT (which is not a Landing Party PTT) as a party thereto as a result
of the loss of the Capacity Sales Agreement to which such PTT is a party (or the
suspension or termination of the Capacity conveyed thereunder), (c) any
amendment to the C&MA
29
which (i) does not impose on the Borrower an obligation to make any payment
unless such payment is provided for in the then current Operating Budget or from
Permitted Sources and (ii) could not reasonably be expected to have an adverse
effect on the ability of the Borrower to perform its obligations under the
Financing Documents to which it is a party, and the Borrower shall have
delivered to the Administrative Agent a certificate of a Responsible Officer
certifying as to the matters set forth in clauses (i) and (ii) prior to entering
into such amendment and (d) any amendment to the C&MA which is required to
conform to Applicable Laws, PROVIDED that such amendment could not reasonably be
expected to have a Material Adverse Effect and is the most reasonable course of
action to take in order to comply with such Applicable Law.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least A-2 from S&P or at least P-2
from Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and
overnight sweep accounts, money market deposit accounts issued or
offered by, (i) the Administrative Agent or any of its Affiliates, (ii)
any Lender or (iii) any other bank which has a combined capital and
surplus and undivided profits of not less than $250,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"PERMITTED LIENS" shall mean:
(a) Liens imposed by law for Taxes that either are not yet
due or are subject to a Contest;
(b) materialmen's, mechanics', worker's, repairmen's,
employees', carriers', warehousemen's and other like Liens relating to
the construction of the Project (as modified in accordance with the
terms hereof) or otherwise arising in the ordinary course of business
for amounts that either are not more than 60 days past due or are
subject to a Contest;
30
(c) Liens of any of the types referred to in clause (b) above
that have been bonded for the full amount in dispute (or as to which
other security arrangements satisfactory to the Administrative Agent
have been made);
(d) the rights of the PTT's with respect to portions of the
Project as specifically provided in the C&MA;
(e) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfying the conditions for
the continuation of proceedings to contest Taxes set forth in the
definitions of "Contest";
(f) pledges and deposits made in the ordinary course of
business in compliance with worker's compensation, unemployment
insurance and other social security laws or regulations;
(g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not interfere with ordinary conduct of
business of the Borrower or the Project;
(h) Liens arising under the Contractor Escrow Agreement as in
effect on the Closing Date; and
(i) Liens arising under any Financing Document.
"PERMITTED PARENT COMPANY" shall mean any Person which directly owns at
least 97.8% of the Capital Stock of the Borrower and is created in accordance
with Section 6.8, together with any Person which indirectly owns at least 97.8%
of the Capital Stock of the Borrower.
"PERMITTED SALE LEASEBACKS" shall mean sale leasebacks of real and
personal property constituting a portion of the Project, PROVIDED that (a) such
sale leasebacks shall be undertaken for fair value pursuant to a tax program
reasonably satisfactory to the Majority Lenders and recommended by an
internationally recognized tax consultant of the Borrower, (b) the terms of such
sale leasebacks shall be acceptable to the Majority Lenders and (c) the Net Cash
Proceeds of any sale of assets undertaken in connection therewith shall be
applied to the prepayment of the Loans in accordance
31
with Section 2.9.
"PERMITTED SOURCES" shall mean, so long as no Event of Default shall
have occurred and be continuing, (a) funds received by the Borrower after the
Closing Date in respect of the issuance of common equity of the Borrower which
are not required to prepay the Loans in accordance with Section 2.9 and are on
deposit in the Sales and Issuances Proceeds Account (b) funds available in the
Capital Expenditure Account if such funds are being used pursuant to Section
6.16(b), (c) on and after the S&J Savings Declaration Date, funds available in
the Capital Expenditure Account, if (i) such funds are being used pursuant to
Section 6.16(a) or 6.22 or for Permitted Upgrades, and (ii) the Administrative
Agent shall have received a certificate of a Responsible Officer of the Borrower
certifying (A) the particular uses of such funds and (B) that the use of such
funds will create a benefit to the Borrower or an improvement to the FLAG System
and could not reasonably be expected to have an adverse effect on the ability of
the Borrower to perform its obligations under the Financing Documents to which
it is a party, (d) funds actually made available to the Borrower for its sole
benefit in accordance with clause ninth of Section 8.10(b) and which are being
maintained on deposit in the Permitted Sources Account (or, if such amounts are
not on deposit therein, such funds have been committed to on terms and pursuant
to documentation satisfactory to the Administrative Agent) or (e) funds made
available by parties other than the Borrower and its Subsidiaries without any
recourse to the Borrower, its assets (other than to Capacity to the extent
conveyed in accordance with the terms of this Agreement), any of its
Subsidiaries or their respective assets or any portion of the Project and which
funds are being maintained on deposit in the Permitted Sources Account (or, if
such amounts are not on deposit therein, such funds have been committed to on
terms and pursuant to documentation satisfactory to the Administrative Agent),
and in each case the use of such funds has not been provided for or otherwise
allocated to another purpose in accordance with the terms of this Agreement.
"PERMITTED SOURCES ACCOUNT" shall mean the special account designated
by that name established by the Collateral Trustee pursuant to Article VIII.
"PERMITTED UPGRADES" shall mean any and all physical additions,
improvements or upgrades to the FLAG System that the Independent Engineer
certifies to the Administrative Agent will add to the overall value of the FLAG
System, PROVIDED that such addition, improvement or upgrade (a) could not
reasonably be expected to have an adverse effect (other than a temporary or
minor adverse effect) on the normal use or operation of the FLAG System, (b)
will not require the Borrower to enter into any Additional Contract or otherwise
amend any Project Document, except as permitted by Sections 6.10 and 6.12, (c)
will not conflict with the provisions of Section 6.16, (d) will not otherwise
result in a Default or Event of Default and (e) could not reasonably be expected
to have a Material Adverse Effect.
32
"PERSON" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGE AGREEMENTS" shall be the collective reference to the Xxxx
Atlantic Shareholder Pledge Agreement, the Xxxxxxxx Pledge Agreement, the
Marubeni Telecom Pledge Agreement, the AIF Pledge Agreement, the KIN Pledge
Agreement, the GE Capital Pledge Agreement, the AT&T Capital Pledge Agreement
and the Borrower Pledge Agreements.
"PLEDGED STOCK" shall mean all Capital Stock of the Borrower (other
than the Capital Stock owned by Gulf) and of each of the Borrower's
Subsidiaries, together with all other "Collateral" as defined in the Pledge
Agreements.
"PRESALE PROCEEDS" shall mean all cash proceeds received by the
Borrower at any time in respect of Capacity Sales Agreements set forth on
Schedule 1.1(a).
"PRESALE PROCEEDS ACCOUNT" shall mean the special account designated by
that name established by the Collateral Trustee pursuant to Article VIII.
"PRESENT VALUE COVERAGE RATIOS" shall have the meaning ascribed thereto
on Schedule 1.1(c).
"PRICING SCHEDULE" shall mean the schedule setting forth for each
Segment the sale or lease price for Capacity on the FLAG System, including any
discounts for aggregated purchases, as the same may be amended by the Borrower
at its discretion from time to time.
"PRIME RATE" shall mean the rate of interest per annum established by
Barclays Bank PLC as its prime or reference or base rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is effective. The Prime Rate
is not necessarily the lowest rate of interest charged to borrowers.
"PRINCIPAL PAYMENT DATE" shall mean the Initial Principal Payment Date
and each date set forth on Schedule 2.7(b), or if any such day is not a Business
Day, the
33
preceding Business Day.
"PRINCIPAL PROJECT DOCUMENTS" shall be the collective reference to the
C&MA, the Construction Contract, each Construction Contract Guaranty, each
Capacity Sales Agreement, each Software Agreement, each Maintenance Zone
Agreement, the Marketing Services Agreement, the Contractor Escrow Agreement and
the Performance Bond, and any replacement of any of the foregoing in accordance
with the terms hereof.
"PROGRAM MANAGEMENT AGREEMENT" shall mean the Program Management
Services Agreement, dated as of April 19, 1994, between the Xxxx Atlantic
Shareholder and the Borrower, as amended, supplemented or otherwise modified
prior to the Closing Date and as the same may be further amended, supplemented
or otherwise modified from time to time in accordance with the terms of this
Agreement.
"PROJECT" shall be the collective reference to the Segments-T, the
Segments-S, the Segment X-1, the Segment X-2, the FNOC and all other facilities
and components necessary for the use, operation and maintenance of the FLAG
System.
"PROJECT ACTIVITIES" shall mean (a) the design, development,
engineering, acquisition, installation, construction, landing, completion,
disposition, financing, modification, start-up, testing, operation, ownership,
possession, maintenance and use of the Project (and any portion thereof), (b)
the sale, lease or other disposition of Capacity on the FLAG System and (c) all
activities related or incidental to any of the foregoing.
"PROJECT DOCUMENTS" shall be the collective reference to the Principal
Project Documents and each other agreement in existence on the Closing Date that
the Borrower or any of its Subsidiaries is a party to related to any Project
Activity, including, without limitation, the documents set forth on Schedule
3.19(b) and each Additional Contract for which the prior written consent of the
Majority Lenders is required under Section 6.12.
"PROJECT REVENUES" shall mean, for any period, all revenues and
proceeds received by the Borrower or any Subsidiary thereof during such period
from whatever source (including, without limitation, in respect of (a) Interest
Hedging Transactions, (b) O&M Payments, (c) refunds in respect of Taxes, (d)
Restoration Payments and (e) the disposition of Capacity); PROVIDED, HOWEVER,
that Project Revenues shall not, in any event, include Special Payments,
Casualty Proceeds, Net Cash Proceeds and proceeds of Loans hereunder.
34
"PROPER INSTRUCTIONS" shall have the meaning ascribed thereto in
Section 10.4(c).
"PROPER PARTY" shall have the meaning ascribed thereto in Section
10.2(a).
"PROVISIONAL SYSTEM ACCEPTANCE" shall have the meaning ascribed thereto
in the Construction Contract.
"PSA AGREEMENT" shall mean the PSA Agreement, dated October 15, 1997,
among the Borrower, TSS and KDD, as amended, supplemented or otherwise modified
from time to time in accordance with the terms of this Agreement.
"PSA 2" shall have the meaning ascribed thereto in the PSA Agreement.
"PSA 3" shall have the meaning ascribed thereto in the PSA Agreement.
"PTT" shall mean any international telecommunications entity or other
Person which commits to purchase or lease or otherwise acquire rights with
respect to Capacity pursuant to a Capacity Sales Agreement.
"XXXXXXXX" shall mean Xxxxxxxx Limited, a company organized and
existing under the laws of the British Virgin Islands.
"XXXXXXXX/NYNEX CORPORATION SUBORDINATED PLEDGE AGREEMENT" shall mean
the Pledge Agreement, dated as of June 30, 1995, between Xxxxxxxx and NYNEX
Corporation, as amended, supplemented or otherwise modified prior to the Closing
Date.
"XXXXXXXX PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as
of the date hereof, substantially in the form of Exhibit F, made by Xxxxxxxx in
favor of the Collateral Trustee, for the benefit of the Secured Parties, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms of this Agreement.
"REBATE ACCOUNT" shall mean the special account designated by that name
established by the Collateral Trustee pursuant to Article VIII.
"REDEMPTION LETTER AGREEMENT" shall mean the letter agreement, dated as
of October 20, 1997, among the Borrower and the Existing Preferred Shareholders,
without giving effect to any amendments or supplements thereto.
"REFERENCE LENDERS" shall be the collective reference to Barclays Bank
PLC, Australia and New Zealand Banking Group Limited and Dresdner Bank AG.
"REFINANCED INDEBTEDNESS" shall mean all Indebtedness under the
Existing
35
Financing Documents.
"REFINANCING" shall be the collective reference to (a) the issuance by
the Borrower of the Senior Unsecured Notes, (b) the making of the initial
extensions of credit by the Lenders
hereunder, (c) the repayment in full of the Refinanced Indebtedness on the
Closing Date and (d) the repurchase of the Existing Preferred Stock on the
Closing Date.
"REGISTER" shall have the meaning ascribed thereto in Section 11.4(c).
"REGISTRAR AND TRANSFER AGENT AGREEMENT" shall mean the Registrar and
Transfer Agent Agreement, dated as of the date hereof, substantially in the form
of Exhibit P, among the Borrower, the Collateral Trustee and Xxxxxxxxxxx
Corporate Services Limited, as registrar, as amended, supplemented or otherwise
modified from time to time in accordance with the terms of this Agreement.
"RELATED PARTIES" shall mean, with respect to any specified Person,
such Person's Affiliates and subsidiaries and the respective directors, officers
and employees of such Person and such Person's Affiliates and subsidiaries.
"RELEASE" shall mean any release, burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying or placement.
"REPAIR AND RESTORATION RESERVE ACCOUNT" shall mean the special account
designated by that name established by the Collateral Trustee pursuant to
Article VIII.
"REPAIR MAINTENANCE PAYMENTS" shall mean payments due from time to time
from PTTs pursuant to Paragraph 11.2 of the C&MA or pursuant to comparable
arrangements.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than an event for which
the 30-day notice requirement is waived under Subsections .13, .14, .16, .18,
.19 or .20 of PBGC Regulation Section 2615.
"REQUIRED BALANCE" shall mean, as of any Principal Payment Date or
other date of determination (a) with respect to the Debt Reserve Account, the
Debt Reserve Required Balance and (b) with respect to the Maintenance Reserve
Account, the Maintenance Reserve Required Balance.
36
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-Laws (or in the case of a partnership, its partnership
agreement) or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation of any Governmental Authority, and any
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, with respect to any Person, the
Chairman, Chief Financial Officer, President or Treasurer of such Person.
"RESTORATION PAYMENTS" shall mean payments in dollars received by the
Borrower for providing restoration on the FLAG System.
"RESTORATION PLAN" shall have the meaning ascribed thereto in Section
4.1(ad), as the same may be amended, supplemented or otherwise modified from
time to time.
"RESTRICTED PAYMENT" shall mean any dividend or distribution (whether
in cash, securities or other property) with respect to any shares of any class
of Capital Stock of the Borrower, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of Capital Stock of the Borrower or any option, warrant or
other right to acquire any such shares of Capital Stock of the Borrower.
"REVENUE ACCOUNT" shall mean the special account designated by that
name established by the Collateral Trustee pursuant to Article VIII.
"REVOLVING CREDIT AVAILABILITY PERIOD" shall mean, with respect to any
Revolving Credit Loan, the period from and including the Closing Date to but not
including the Revolving Credit Termination Date (or such earlier date on which
the Revolving Credit Commitments shall terminate).
"REVOLVING CREDIT COMMITMENT" shall mean, as to any Revolving Credit
Lender, the obligation of such Revolving Credit Lender to make Revolving Credit
Loans to the Borrower in an aggregate amount not to exceed, at any one time
outstanding, the amount set forth opposite such Revolving Credit Lender's name
on Schedule 2.1 under the heading "Revolving Credit Commitment" or, in the case
of any Revolving Credit Lender that is an assignee, the amount of the assigning
Revolving Credit Lender's Revolving Credit Commitment assigned to such assignee
pursuant to Section 11.4, in each case as such amount may be adjusted or reduced
from time to time as provided herein (including pursuant to Section 2.6(e)).
37
"REVOLVING CREDIT LENDERS" shall mean, at any time of determination,
Lenders having outstanding Revolving Credit Loans or unused Revolving Credit
Commitments.
"REVOLVING CREDIT LOANS" shall have the meaning ascribed thereto in
Section 2.1.
"REVOLVING CREDIT NOTE" shall have the meaning ascribed thereto in
Section 2.7(f).
"REVOLVING CREDIT TERMINATION DATE" shall mean January 30, 2004.
"RIGHTS-OF-WAY" shall mean all easements, rights-of-way and other real
property or similar interests and all consents required or reasonably necessary
for access to the Project or for the performance of any Project Activity.
"R&R RESERVE MAXIMUM BALANCE" shall mean $5,000,000.
"S&J ACTUAL SAVINGS AMOUNT" shall have the meaning ascribed thereto in
Section 8.17(b).
"S&J EXPECTED SAVINGS AMOUNT" shall have the meaning ascribed thereto
in Section 8.17(b).
"S&J SAVINGS DECLARATION DATE" shall have the meaning ascribed thereto
in Section 8.17(b).
"S&P" shall mean Standard & Poor's Ratings Services.
"SALES AND ISSUANCES PROCEEDS ACCOUNT" shall mean the special account
designated by that name established by the Collateral Trustee pursuant to
Article VIII.
"SECURED PARTIES" shall be the collective reference to the
Administrative Agent, the Collateral Trustee, the Lenders and the Interest
Hedging Counterparties described in clause (a) of the definition thereof.
"SECURITY AGREEMENTS" shall be the collective reference to the Borrower
Security Agreement and the Subsidiary Security Agreements.
"SECURITY DOCUMENTS" shall be the collective reference to the Security
Agreements, the Pledge Agreements and any other document pursuant to which a
38
security interest is, or is purported to be, granted to secure the Obligations.
"SEGMENT-X" shall mean Segment X-1 or Segment X-2, as the case may be.
"SEGMENT X-1" shall have the meaning ascribed thereto in the C&MA.
"SEGMENT X-2" shall have the meaning ascribed thereto in the C&MA.
"SEGMENTS" shall be the collective reference to the Segments-S,
Segments-T, Segment X- 1, Segment X-2 and any other "Segment" under the C&MA.
"SEGMENTS-S" shall have the meaning ascribed thereto in the C&MA.
"SEGMENTS-T" shall have the meaning ascribed thereto in the C&MA.
"SENIOR UNSECURED NOTE DOCUMENTS" shall be the collective reference to
the Senior Unsecured Notes, the Senior Unsecured Note Indenture and the Senior
Unsecured Note Offering Memorandum.
"SENIOR UNSECURED NOTE INDENTURE" shall mean the Indenture, dated the
Closing Date, between the Borrower and the Senior Unsecured Note Trustee,
pursuant to which the Senior Unsecured Notes are issued, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms of this Agreement.
"SENIOR UNSECURED NOTE INTEREST PAYMENT DATE" shall mean the 30th day
of January and July of each calendar year, commencing with July 30, 1998 (or, if
any such day is not a Business Day, the immediately succeeding Business Day).
"SENIOR UNSECURED NOTE OFFERING MEMORANDUM" shall mean the Offering
Memorandum related to the issuance of the Unregistered Notes, which shall be in
form and substance reasonably satisfactory to the Administrative Agent.
"SENIOR UNSECURED NOTE TRUSTEE" shall mean IBJ Xxxxxxxx Bank & Trust
Company, as trustee under the Senior Unsecured Note Indenture.
"SENIOR UNSECURED NOTES" shall mean (a) at any time prior to the
consummation of the Exchange Offer, the Unregistered Notes and (b) at any time
after the consummation of the Exchange Offer, the Exchange Notes.
"SHAREHOLDER AGREEMENT" shall mean the Agreement, dated as of April 19,
1994 by and between the Xxxx Atlantic Shareholder, Xxxxxxxx, Gulf, Spinconsult
S.A., Xxxxxx Xxxxx, Reja Xxxxx, Xxxx Swaidi, the Borrower and Fiber Optics
Association for International Research Inc., as amended, supplemented or
otherwise modified prior to
39
the Closing Date and as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Agreement.
"SHAREHOLDERS" shall be the collective reference to the Xxxx Atlantic
Shareholder, Marubeni Telecom, Xxxxxxxx, Gulf, AIF, KIN, GE Capital and AT&T
Capital each in their capacity as a shareholder of the Borrower, together with
each other shareholder of the Borrower receiving newly issued Capital Stock of
the Borrower after the Closing Date (other than Persons receiving Capital Stock
of the Borrower under the Stock Option Plan), and the respective permitted
successors and assigns of each of the foregoing.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOFTWARE" shall have the meaning ascribed thereto in the Construction
Contract.
"SOFTWARE AGREEMENTS" shall be the collective reference to the
Software Development and License Agreement, the Technology Escrow Deposit
Agreement, each Software Maintenance Agreement and each other software
license agreement entered into by the Borrower in order to perform any
Project Activity.
"SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT" shall mean the Amended
and Restated Software Development and License Agreement, dated as of December
14, 1994, by and between the Borrower and AT&T, as amended, supplemented or
otherwise modified prior to the Closing Date and as the same may be further
amended, supplemented or modified from time to time in accordance with the
terms of this Agreement.
"SOFTWARE MAINTENANCE AGREEMENT" shall mean the software maintenance
agreement to be entered into by the Borrower in accordance with Section
5.22(c) and each other software maintenance agreement to which the Borrower
is a party, as each may be amended, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
"SOUTH EAST ASIA AND INDIAN OCEAN CABLE MAINTENANCE AGREEMENT" shall
mean the South East Asia and Indian Ocean Cable Maintenance Agreement, dated
June 1, 1986, between and among Cable and Wireless plc, Kokusai Denshin Denwa
Co., Ltd., the Borrower and other Persons set forth therein or from time to
time parties thereto, as amended, supplemented or otherwise modified prior to
the Closing Date and as the same may be further amended, supplemented or
otherwise modified from time to time
40
in accordance with the terms of this Agreement.
"SPECIAL PAYMENT ACCOUNT" shall mean the special account designated by
that name established by the Collateral Trustee pursuant to Article VIII.
"SPECIAL PAYMENTS" shall mean (a) all payments made by the Contractors
after the Closing Date under the Construction Contract and all other payments
made after the Closing Date by the Contractors or the Construction Contract
Guarantors in respect of any breach or failure by the Contractors to perform
their obligations under the Construction Contract, whether as a result of any
proceeding, settlement or otherwise, and (b) all payments made under the
Performance Bond.
"SPECIFIED PARTICIPANT" shall be the collective reference to (a) the
Borrower, (b) each Shareholder (other than Gulf), (c) at any time prior to the
expiration of the Warranty Period, the Construction Contract Guarantors and (d)
the Permitted Parent Company, if any.
"STANDBY MAINTENANCE PAYMENTS" shall mean payments due from time to
time from PTTs pursuant to Paragraph 11.1 of the C&MA or pursuant to comparable
arrangements.
"STATUTORY RESERVE RATE" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STOCK OPTION PLAN" shall mean a stock option plan to be created by the
Borrower for the benefit of certain employees of the Borrower and/or any of its
Subsidiaries.
"SUBJECT COLLATERAL" shall mean all Collateral which can be perfected
by the taking of action in respect of the United States or Bermuda.
"SUBMARINE SYSTEM" shall have the meaning ascribed thereto in the C&MA.
41
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"SUBSIDIARY GUARANTEES" shall be the collective reference to all
guarantees entered into by any Subsidiary of the Borrower pursuant to Section
6.26, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms of this Agreement.
"SUBSIDIARY SECURITY AGREEMENTS" shall be the collective reference to
all security agreements entered into by any Subsidiary of the Borrower pursuant
to Section 6.26, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms of this Agreement.
"SUPPLEMENTAL DEBT RESERVE ACCOUNT" shall mean the special account
designated by that name established by the Collateral Trustee pursuant to
Article VIII.
"SUPPLEMENTAL DEBT RESERVE MAXIMUM BALANCE" shall mean, as of any date
of determination, an amount equal to the difference between (a) the Gross Debt
Reserve Required Amount at such time and (b) the actual cash balance in the Debt
Reserve Account at such time.
"TAX" OR "TAXES" shall mean any and all present or future fees
(including, without limitation, documentation, recording, license and
registration fees), taxes (including, without limitation, net income, franchise,
value added, ad valorem, gross income, gross receipts, sales, use, rental,
property (personal and real, tangible and intangible) and stamp taxes), levies,
imposts, duties, deductions, charges, assessments or withholdings of any nature
whatsoever, general or special, ordinary or extraordinary, imposed or assessed
by any Governmental Authority, together with any and all penalties, fines,
additions to tax and interest thereon and including any and all liabilities,
losses, expenses and costs of any kind whatsoever that are in the nature of
taxes.
"TECHNOLOGY ESCROW DEPOSIT AGREEMENT" shall mean the Amended and
Restated Technology Escrow Deposit Agreement, dated as of December 14, 1994,
among the Borrower, AT&T and Filesafe, Inc., as escrow agent, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
42
"TERM LENDERS" shall mean, at any time of determination, Lenders having
outstanding Term Loans or unused Term Loan Commitments.
"TERM LOAN COMMITMENT" shall mean, as to any Term Lender, the
obligation of such Term Lender to make Term Loans to the Borrower in an
aggregate principal amount not to exceed the amount set forth opposite such Term
Loan Lender's name on Schedule 2.1 under the heading "Term Loan Commitment" or,
in the case of a Term Loan Lender that is an assignee, the amount of the
assigning Term Loan Lender's Term Loan Commitment assigned to such assignee
pursuant to Section 11.4, in each case as such amount may be adjusted from time
to time as provided herein.
"TERM LOANS" shall have the meaning ascribed thereto in Section 2.1.
"TERM NOTE" shall have the meaning ascribed thereto in Section 2.7(f).
"TOTAL CONTRACT PRICE" shall have the meaning ascribed thereto in the
Construction Contract.
"TRANSACTION DOCUMENTS" shall be the collective reference to the
Financing Documents and the Project Documents.
"TSS" shall mean Tyco Submarine Systems Ltd. (formerly known as AT&T
Submarine Systems, Inc.).
"TYPE" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UNREGISTERED NOTES" shall mean the $430 million aggregate principal
amount of 8.25% Senior Notes due 2008 of the Borrower issued pursuant to the
Senior Unsecured Note Indenture, as amended, supplemented or otherwise modified
from time to time in accordance with the terms of this Agreement.
"VOTING STOCK" shall mean, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of members of the
board of directors or other governing body of such Person.
"WARRANTY PERIOD" shall mean the period from and including the Closing
Date to and including the last day of the latest "Replacement Period" under the
Construction
43
Contract.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"WORK" shall mean any and all services, functions, duties,
responsibilities or other obligations to be undertaken and performed by any
Contractor pursuant to the Construction Contract, including, but not limited to,
all "Work" and "Services" as such terms are defined in the Construction
Contract, and the provision of all labor, material and services utilized in the
design, construction, installation, engineering, equipping and testing of the
Project.
SECTION 1.2. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (E.G., a
"Revolving Credit Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and
Type (e.g., a "Eurodollar Revolving Credit Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Credit Borrowing") or by
Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Credit").
SECTION 1.3. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as amended, supplemented, or
otherwise modified from time to time (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.4. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time.
44
ARTICLE II
THE COMMITMENTS
SECTION 2.1. COMMITMENTS. Subject to the terms and conditions set forth
herein, (a) each Revolving Credit Lender severally agrees to make revolving
credit loans (collectively, the "REVOLVING CREDIT LOANS") to the Borrower from
time to time during the Revolving Credit Availability Period in an aggregate
principal amount at any one time outstanding not to exceed such Revolving Credit
Lender's Revolving Credit Commitment at such time and (b) each Term Lender
severally agrees to make term loans (collectively, the "TERM LOANS") to the
Borrower on the Closing Date in an aggregate principal amount not to exceed such
Term Lender's Term Loan Commitment. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Credit Loans. Amounts repaid in respect of Term Loans may not
be reborrowed.
SECTION 2.2. LOANS AND BORROWINGS. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
applicable Lenders ratably in accordance with their respective Commitments of
the applicable Class. The failure of any Lender to make any Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder;
PROVIDED that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Borrowing of a Class shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender, at its option, may make any Eurodollar Loan
by causing any domestic or foreign branch of such Lender to make such Loan;
PROVIDED that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement and
shall not increase the cost to the Borrower with respect to such Loan.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000, and at the time each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000; PROVIDED that any
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving
45
Credit Commitments. Borrowings of more than one Type and Class may be
outstanding at the same time; PROVIDED that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.3. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall deliver a Borrowing Request to the Administrative Agent (a) in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing. Each such Borrowing
Request shall be irrevocable. Each such Borrowing Request shall specify the
following information in compliance with Section 2.2:
(i) whether the requested Borrowing is to be a Revolving Credit
Borrowing and/or a Term Loan Borrowing;
(ii) the aggregate amount of each requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether each such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(v) in the case of any Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period".
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Eurodollar Borrowing. If no Interest Period is specified
with respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of the amount of such Lender's Loan to be made as part of the requested
Borrowing.
SECTION 2.4. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the
46
Lenders. The Administrative Agent will make such Loans available to the Borrower
by (i) with respect to Loans made on the Closing Date, promptly distributing the
amounts so received, in like funds, in accordance with the instructions set
forth in the related Borrowing Request, provided such instructions are
consistent with the schedule of "sources and uses" delivered to the
Administrative Agent prior to the Closing Date and (ii) with respect to all
other Loans, promptly crediting the amounts so received, in like funds, to the
Revenue Account.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Revolving Credit Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.5. INTEREST ELECTIONS. (a) Each Borrowing shall be of the
Type and, in the case of a Eurodollar Borrowing, shall have an initial Interest
Period, as specified in the applicable Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.5. The Borrower may elect
different options with respect to different portions of the affected Borrowing
of any Class, in which case each such portion shall be allocated ratably among
the Lenders of such Class holding the Loans of such Class comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by delivering a
Continuation/Conversion Notice to the Administrative Agent by the time that a
Borrowing Request would be required under
47
Section 2.3 if the Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
notice shall be irrevocable.
(c) Each Continuation/Conversion Notice shall specify the following
information in compliance with Section 2.2:
(i) the Borrowing to which such
Continuation/Conversion Notice applies and, if different options are
being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);
(ii) the effective date of the election made
pursuant to such Continuation/Conversion Notice, which shall be a
Business Day;
(iii) whether the resulting Borrowing is to be
an ABR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a
Eurodollar Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
If any such Continuation/Conversion Notice requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of a Continuation/Conversion Notice, the
Administrative Agent shall advise the applicable Lenders of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) Subject to Sections 2.2 and 2.12 and the other provisions of this
Section, if the Borrower fails to deliver a timely Continuation/Conversion
Notice with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then the Borrower shall be deemed to have selected to
continue such Borrowing as a Eurodollar Borrowing with an Interest Period of one
month's duration. Notwithstanding any contrary provision hereof, if an Event of
Default as described in paragraph (a) of Article VII (or any other Event of
Default if the Administrative Agent so elects) has occurred and is continuing
and the Administrative Agent so notifies the Borrower, then, so long as such
Event of Default is continuing, if the Borrower wishes to continue any
48
Borrowing as, or convert any Borrowing to, a Eurodollar Borrowing, the
Administrative Agent shall have the right to elect the Interest Period for such
Eurodollar Borrowing, which Interest Period may be of any period of time and is
not subject to the restriction that it shall have the duration of either one,
two, three or six months.
SECTION 2.6. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Term
Loan Commitments shall terminate after the initial Term Loans are made on the
Closing Date. Unless previously terminated, the Revolving Credit Commitments
shall terminate on the Revolving Credit Termination Date.
(b) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Revolving Credit Commitments under paragraph (c) of
this Section at least five (5) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Revolving Credit Lenders of the contents thereof. Each notice
delivered by the Borrower pursuant to this Section shall be irrevocable. Any
termination or reduction of the Revolving Credit Commitments shall be permanent.
Each reduction of the Revolving Credit Commitments shall be made ratably among
the Revolving Credit Lenders in accordance with their respective Revolving
Credit Commitments.
(c) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Credit Commitments; PROVIDED that each reduction of the
Revolving Credit Commitments shall be in an amount that is an integral multiple
of $1,000,000; and PROVIDED, FURTHER, that the Borrower shall not be permitted
to terminate or reduce the Revolving Credit Commitments unless, after giving
effect to such termination or reduction of the Revolving Credit Commitments, the
aggregate Revolving Credit Commitments are greater than or equal to the sum of
(x) the difference, if positive, between the Gross Debt Reserve Required Balance
and the actual balance in the Debt Reserve Account and (y) the difference, if
positive, between the Gross Maintenance Reserve Required Balance and the actual
balance in the Maintenance Reserve Account.
(d) Except for mandatory prepayments of the Revolving Credit Loans
pursuant to Section 2.9(b), the Revolving Credit Commitments shall be
automatically and permanently reduced upon and in the amount of any prepayments
made thereon pursuant to Section 2.9.
(e) Upon the occurrence and continuance of a Designated Event, the
Revolving Credit Commitment of each Revolving Credit Lender shall, at any date
of determination,
49
only be available in an amount equal to the product of (i) the Revolving Credit
Commitment of such Revolving Credit Lender and (ii) the percentage set forth
below corresponding to the quarterly period in which such date falls:
QUARTERLY PERIOD ENDING ON PERCENTAGE (%)
-------------------------- --------------
March 31, 1998 98.3%
June 30, 1998 96.7%
September 30, 1998 95.0%
December 31, 1998 93.4%
March 31, 1999 91.2%
June 30, 1999 89.1%
September 30, 1999 86.9%
December 31, 1999 84.8%
March 31, 2000 82.0%
June 30, 2000 79.3%
September 30, 2000 76.6%
December 31, 2000 73.9%
March 31, 2001 70.5%
June 30, 2001 67.1%
September 30, 2001 63.8%
December 31, 2001 60.4%
March 31, 2002 56.2%
June 30, 2002 52.1%
September 30, 2002 48.0%
December 31, 2002 43.9%
March 31, 2003 32.9%
June 30, 2003 21.9%
September 30, 2003 10.9%
Thereafter 0.0%
Nothing contained in this Section 2.6(e) shall limit the provisions of Section
4.2(b), 6.31 or 6.32.
SECTION 2.7. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Revolving Credit Lender, the then unpaid principal amount of
each Revolving Credit Loan of such Revolving Credit Lender on the Maturity Date
(together with accrued interest thereon).
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent, for the benefit of the Term Lenders, the aggregate unpaid
principal amount of the Term Loans, in quarterly installments on Principal
Payment Dates, commencing on the Initial Principal Payment Date, in an amount
for each such Principal Payment Date
50
as set forth in Schedule 2.7(b) under the heading "Contractual Amortization". To
the extent not previously paid, all Term Loans shall be due and payable on the
Maturity Date. Each repayment of Term Loan Borrowings shall be applied to repay
any outstanding ABR Term Loan Borrowings first, and then to outstanding
Eurodollar Term Loan Borrowings in the order of the remaining duration of their
respective Interest Periods (the Borrowing with the shortest remaining Interest
Period to be repaid first). Repayments of Term Loan Borrowings shall be
accompanied by accrued interest thereon.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 11.4(c) and a subaccount therein for each Lender, in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(e) The entries made in the Register maintained pursuant to paragraph
(d) of this Section shall constitute PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts pursuant to
Sections 2.7(c) or (d) or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.
(f) The Borrower agrees that, upon the request by the Administrative
Agent on behalf of any Lender, the Borrower will execute and deliver to such
Lender, as applicable, (i) a promissory note of the Borrower payable to the
order of such Lender and its registered assigns evidencing the Revolving Credit
Loans of such Lender and substantially in the form of Exhibit A-1 with
appropriate insertions as to date and principal amount (each, a "REVOLVING
CREDIT NOTE") and (ii) a promissory note of the Borrower payable to the order of
such Lender and its registered assigns evidencing the Term Loans of such Lender
and substantially in the form of Exhibit A-2 with appropriate insertions as to
date and principal amount (each, a "TERM NOTE"). Thereafter, the Loans evidenced
by any such Note and interest thereon shall at all times (including after
assignment pursuant to Section 11.4) be represented by one or more Notes payable
to
51
the order of the payee named therein and its registered assigns. A Note and the
obligation evidenced thereby may be assigned or otherwise transferred in whole
or in part only as part of an assignment under this Agreement in accordance with
Section 11.4 and only by registration of such assignment or transfer of such
Note and the obligation evidenced thereby in the Register (and each Note shall
expressly so provide). Any assignment or transfer of all or part of an
obligation evidenced by a Note shall be registered in the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
obligation, accompanied by an Assignment and Acceptance duly executed by the
assignor thereof, and thereupon, if requested by the assignee, one or more new
Notes shall be issued to the designated assignee and the old Note shall be
returned by the Administrative Agent to the Borrower marked "canceled". No
assignment of a Note and the obligation evidenced thereby shall be effective
unless it shall have been recorded in the Register by the Administrative Agent
as provided in this Section.
SECTION 2.8. OPTIONAL PREPAYMENTS OF LOANS. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, without premium or penalty (out of funds available to the Borrower
under clause ninth of Section 8.10(b)) subject to prior notice in accordance
with paragraph (b) of this Section and subject to the provisions of Section
2.14.
(b) The Borrower shall notify the Administrative Agent in writing of
any optional prepayment hereunder, not later than 11:00 a.m., New York City
time, five Business Days before the date of prepayment. Each such notice shall
be irrevocable and shall specify the date and amount of prepayment and whether
the prepayment is (i) of Term Loans, Revolving Credit Loans or a combination
thereof and (ii) of Eurodollar Loans, ABR Loans or a combination thereof, and,
in each case if a combination thereof, the principal amount allocable to each
Class, and shall specify how such prepayment shall be applied to the remaining
installments of the Loans. Promptly following receipt of any such notice, the
Administrative Agent shall advise the applicable Lenders of the contents
thereof. Partial optional prepayments shall be in a minimum aggregate principal
amount of $5,000,000 and integral multiples of $1,000,000 in excess thereof or,
if less, the outstanding amount of the Loans being prepaid or the entire amount
of a Borrowing for which the date of prepayment is the last day of the Interest
Period of such Borrowing. Optional prepayments shall be accompanied by accrued
interest thereon. Optional prepayments with respect to the Term Loans may not be
reborrowed.
(c) Optional prepayments shall be applied to the remaining installments
of the Loans as specified by the Borrower in the notice of prepayment set forth
in paragraph (b) above.
SECTION 2.9. MANDATORY PREPAYMENTS. (a) The Borrower shall prepay the
Term Loans with funds available in the Presale Proceeds Account in accordance
with
52
the terms of Section 8.9.
(b) The Borrower shall prepay the Loans on each Principal Payment Date
in accordance with the terms of Section 8.10(b).
(c) The Borrower shall prepay the Loans immediately (except as provided
in Section 2.9(k)) after the receipt of Net Cash Proceeds as follows:
(i) by an amount equal to 50% of the Net Cash Proceeds
of any issuance on and after the Closing Date of Capital Stock of the
Borrower or any Permitted Parent Company; PROVIDED, HOWEVER, that if a
Responsible Officer of the Borrower delivers to the Administrative
Agent and the Collateral Trustee a certificate on or before the date
such Net Cash Proceeds are received and such certificate sets forth the
portion of such Net Cash Proceeds the Borrower intends to spend on
Permitted Upgrades within the next six months, together with a
description of such Permitted Upgrades, then, so long as no Default,
Event of Default or Designated Event shall have occurred and be
continuing, the Borrower shall be permitted to retain such portion (the
"SPECIFIED PORTION") in the Sales and Issuances Proceeds Account to pay
for Permitted Upgrades in accordance with Section 8.21, with 50% of the
remainder of such Net Cash Proceeds being immediately used to prepay
the Loans; PROVIDED, FURTHER, that if the Specified Portion is not
applied within six months (or such longer period not in excess of one
year as the Administrative Agent may approve in writing), 50% of such
unapplied amount shall also be immediately used to prepay the Loans;
(ii) by an amount equal to 100% of the Net Cash Proceeds
of any incurrence of Indebtedness on and after the Closing Date by the
Borrower in accordance with clause (g) of Section 6.1 or by any
Subsidiary of the Borrower or any Permitted Parent Company; PROVIDED,
HOWEVER, that, so long as no Default, Event of Default or Designated
Event shall have occurred and be continuing, the Borrower shall not be
required to make any such prepayment with respect to any portion of
such Net Cash Proceeds which are, within three months of the receipt
thereof, applied to the payment of Permitted Upgrades; and
(iii) by an amount equal to 100% of the Net Cash Proceeds
of any sale, transfer or other disposition of any asset of the Borrower
or any Subsidiary thereof (other than sales, transfers or dispositions
of Capacity described in clause (a) of Section 6.4 and dispositions
resulting in aggregate Net Cash Proceeds not exceeding $1,000,000
during any fiscal year of the Borrower); PROVIDED, HOWEVER, that the
Borrower shall not be required to make any such prepayment if such Net
Cash Proceeds are, within three months of receipt, used to replace such
assets disposed of with similar assets of at least substantially the
53
same value, utility and useful life.
(d) If an Event of Loss shall occur, unless the affected portion of the
FLAG System is being repaired in accordance with Section 5.19(b), the Borrower
shall, on the third Business Day following the date on which insurance,
condemnation or expropriation proceeds are received with respect to such Event
of Loss, prepay the Loans in an amount equal to the insurance, condemnation
and/or expropriation proceeds received.
(e) The Borrower shall immediately prepay the Loans with the Net Cash
Proceeds received in respect of any Permitted Sale Leaseback.
(f) The proceeds of any Special Payments shall be used to prepay the
Loans in accordance with Section 8.20. The Borrower shall prepay the Loans from
funds available in the Capital Expenditure Account in accordance with Section
8.17(b).
(g) The Borrower shall prepay the Loans with all remaining proceeds
then being held in the Construction Account upon the payment in full of all
costs in respect of the construction and installation of the Project which were
set forth in the Construction Cost Certificate (other than costs set forth
therein which are payable to the Contractors) in accordance with Section 8.8(b).
(h) The Borrower shall prepay the Loans with all proceeds disbursed or
otherwise released from the Contractor Escrow Account (other than disbursements
made therefrom directly to the Contractors in respect of payments due under the
Construction Contract in accordance with the terms of the Contractor Escrow
Agreement).
(i) Mandatory prepayments shall be accompanied by accrued interest.
(j) Mandatory prepayments of the Loans pursuant to paragraphs (c), (d),
(e), (f), (g) and (h) above shall be applied FIRST, to the mandatory prepayment
of the Term Loans and SECOND, to the mandatory prepayment of the Revolving
Credit Loans (and then, unless the Revolving Credit Commitments shall have been
terminated, to the cash collateralization of the Revolving Credit Commitments on
terms and subject to documentation reasonably satisfactory to the Administrative
Agent). Mandatory prepayments of the Term Loans shall be applied to the
installments thereof in the direct order of maturity.
(k) Upon being required to make a mandatory prepayment pursuant to this
54
Section, the Borrower shall have the right (i) first, to prepay the ABR Loans
and any and all Eurodollar Loans having Interest Period(s) ending on the date
such prepayment is required and (ii) then, with respect to Eurodollar Loans
having Interest Period(s) ending on a day other than the date of such
prepayment, to deposit cash in the Supplemental Debt Reserve Account sufficient
to prepay in full such Eurodollar Loans (together with accrued interest thereon)
at the end of the applicable Interest Period(s). Any amounts so deposited shall
be held in the Supplemental Debt Reserve Account and shall be applied to the
prepayment of the applicable Eurodollar Loans at the end of the current Interest
Periods applicable thereto.
SECTION 2.10. FEES. (a) The Borrower agrees to pay to the
Administrative Agent, for the account of each Revolving Credit Lender, a
commitment fee, which shall accrue at the rate of 0.25% per annum on the average
daily unused portion of the Revolving Credit Commitment of such Revolving Credit
Lender during the period from the Closing Date to but excluding the date on
which the Revolving Credit Commitments terminate. Accrued commitment fees shall
be payable in arrears on the 30th day of each January, April, July and October
(and, with respect to the commitment fees payable in respect of any Revolving
Credit Commitment being terminated or reduced, on the date of such termination
or reduction) commencing on April 30, 1998 (or, if any such day is not a
Business Day, on the immediately preceding Business Day). All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing the fees payable under this paragraph (a),
the Revolving Credit Commitments shall be computed without taking into account
any limitation on the availability of the Revolving Credit Commitments pursuant
to Section 2.6(e).
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, an annual administration fee in the amounts set forth in the Fee Letter
and payable on the Closing Date and each anniversary thereof prior to the
Maturity Date all as set forth in the Fee Letter.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent, for distribution, in
the case of commitment fees, to the Revolving Credit Lenders.
SECTION 2.11. INTEREST. (a) The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin.
55
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of or interest on any
Loan, 2% plus the rate otherwise applicable to such Loan as provided above or
(ii) in the case of any other amount, 2% plus the highest rate applicable to the
Loans as provided above.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; PROVIDED that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan, accrued and unpaid interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Borrowing prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion
and (iv) all unpaid accrued interest shall be payable upon the Maturity Date.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. ALTERNATE RATE OF INTEREST; ILLEGALITY. (a)
Notwithstanding any other provision of this Agreement to the contrary, if prior
to the commencement of any Interest Period for a Eurodollar Borrowing:
(i) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(ii) the Administrative Agent is advised by the Majority
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
56
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any
Continuation/Conversion Notice that requests the conversion of any Borrowing to,
or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing shall continue as, or be converted to, as applicable, an ABR
Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
(b) Notwithstanding any other provision of this Agreement to the
contrary, if on or after the date of this Agreement the adoption of or any
change in any applicable law or in the interpretation or application thereof
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, such Lender shall give telex, telecopy or
telephonic notice thereof to the Administrative Agent and the Borrower as soon
as practicable (and, with respect to any such telephonic notice, the party
delivering the same agrees to confirm such notice in writing) and (i) the
commitment of such Lender hereunder to make Eurodollar Loans and continue
Eurodollar Loans as such shall forthwith be cancelled and (ii) such Lender's
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law.
SECTION 2.13. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any
Lender (except any such reserve requirement reflected in the Adjusted
LIBO Rate); or
(ii) impose on any Lender or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made
by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
capital of such Lender or any holding company for such Lender, if any, as a
consequence of
57
this Agreement or the Loans made by such Lender, to a level below that which
such Lender or the holding company for such Lender would have achieved but for
such Change in Law (taking into consideration such Lender's or such Lender's
holding company's policies with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender or such Lender's holding company, as
the case may be, such additional amount or amounts as will compensate such
Lender for any such reduction suffered.
(c) If any Lender becomes entitled to claim compensation pursuant to
this Section, such Lender shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or such holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower (with
a copy to the Administrative Agent). The Borrower shall pay such Lender the
amount shown as due within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
PROVIDED, FURTHER, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the six-month period referred to above
shall be extended to include the period of retroactive effect thereof.
SECTION 2.14. BREAK FUNDING PAYMENTS. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto, (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto (including
in accordance with the provisions of Section 2.12(b) or 2.17(b)) or (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, the loss to any
Lender attributable to any such event may include an amount determined by such
Lender to be equal to the excess, if any, of (i) the amount of interest that
such Lender would pay for a deposit equal to the principal amount of such Loan
for the period from the date of such payment, conversion or failure to the last
day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the Adjusted LIBO Rate for
such Interest Period, over (ii) the amount of interest that
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such Lender would earn on such principal amount for such period if such Lender
were to invest such principal amount for such period at the interest rate that
would be bid by such Lender (or an affiliate of such Lender) for dollar deposits
from other banks in the eurodollar market at the commencement of such period. A
certificate of any Lender setting forth the details of any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered by such Lender to the Borrower (with a copy to the Administrative
Agent) and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due within 10 days after receipt thereof.
SECTION 2.15. TAXES. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with Applicable Law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as reasonably practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the
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Administrative Agent.
(e) Any Lender that is legally entitled to an exemption from or
reduction of withholding tax which is an Indemnified Tax with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times reasonably requested by the
Borrower, such properly completed and executed documentation prescribed by
Applicable Law as will permit such payments to be made without withholding or
subject to withholding at a reduced rate, PROVIDED that such Lender is legally
entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or under Section 2.13, 2.14
or 2.15, or otherwise) prior to 1:00 p.m., New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. Subject to Article
VIII, all such payments shall be made to the Administrative Agent at its offices
at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 except that payments pursuant to
Sections 2.13, 2.14, 2.15 and 10.3 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. Except as otherwise set forth herein, if any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied, subject to the provisions
of Article VIII, (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, to pay principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans of a particular Class
and accrued interest thereon than the proportion received by any other Lender of
such Class, then the Lender receiving such
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greater proportion shall purchase (for cash at face value) a participation in
the Loans of such Class of the other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans of such Class; PROVIDED that (i) if any such
participation is purchased and all or any portion of the payment giving rise
thereto is recovered, such participation shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower, any Shareholder or any Affiliate
thereof (as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.4(b) or 2.16(d), then the Administrative Agent may, in
its discretion apply any amounts thereafter received by the Administrative Agent
for the account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender notifies the Borrower of its intent to apply Section 2.12(b) and/or
requests compensation under Section 2.13, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights
61
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Lender, such designation or assignment (i) would avoid
the application of Section 2.12(b), eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender notifies the Borrower of its intent to apply Section
2.12(b) and such application is not being made by the Lenders generally and/or
requests compensation under Section 2.13 which is not being requested by the
Lenders generally, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, or if any Lender defaults in its obligation to fund
Loans hereunder, so long as no Default shall have occurred and is continuing, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, then the Borrower (i) may require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.4), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (A) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld or delayed, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (C) in the case of any such assignment resulting from a claim for
compensation under Section 2.13 or payments required to be made pursuant to
Section 2.15, such assignment will result in a reduction in such compensation or
payments or in the case of any such assignment resulting from the application of
Section 2.12(b), such assignment will be to an assignee not then subject to such
Section or (ii) if the Borrower, after using best efforts (to the satisfaction
of the Administrative Agent), cannot procure for such Lender an assignee and
delegatee in satisfaction of clause (i) above, may prepay such Lender's Loans in
full out of funds made available to the Borrower for its sole benefit in
accordance with clause ninth of Section 8.10(b) or out of funds available in the
Excess Cash Flow Account, whereupon such Lender's Commitment shall also
terminate. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, the
Collateral Trustee and the Lenders that:
SECTION 3.1. FINANCIAL CONDITION. (a) The financial statements of the
Borrower, furnished to the Lenders pursuant to Section 4.1(t), are complete and
correct in all material respects and present fairly in all material respects the
financial position and results of operations and cash flow of the Borrower as of
the dates thereof and for the periods then ended in conformity with GAAP applied
on a consistent basis. All material liabilities, direct and contingent, of the
Borrower on such dates are disclosed in such balance sheets.
(b) The unaudited PRO FORMA balance sheet of the Borrower, as at
September 30, 1997, furnished to the Lenders pursuant to Section 4.1(t),
represents in all material respects the PRO FORMA financial condition of the
Borrower as at such date after giving effect to the Refinancing and the initial
extensions of credit under this Agreement, assuming the Refinancing occurred on
September 30, 1997.
SECTION 3.2. NO CHANGE. Since December 31, 1996, there has been no
event, occurrence, development of facts or change which has had or could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.3. ORGANIZATION; EXISTENCE; BUSINESS. (a) Each of the
Borrower and its Subsidiaries is a company duly organized and validly existing
and in good standing under the laws of the jurisdiction of its organization and
is duly qualified to do business in such jurisdiction and in each other
jurisdiction in which the conduct of its business or the ownership or lease of
its assets requires such qualification, except in the case of any such other
jurisdiction, where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
(b) No filing, recording, publishing or other act is necessary or
appropriate in connection with the existence of the Borrower or any of its
Subsidiaries except those which have been duly made or performed and except
where the failure to so file, record, publish or act could not reasonably be
expected to have a Material Adverse Effect.
(c) Prior to the Closing Date, the Borrower has engaged in no business
other than the development, construction, installation, maintenance and
operation of the Project, the marketing and disposition of Capacity and
activities incidental thereto, and
63
the Borrower has no obligations or liabilities (contingent or otherwise) other
than those directly related to the conduct of such business and disclosed in the
financial statements delivered pursuant to Section 4.1(t).
SECTION 3.4. COMPLIANCE WITH LAW. Each of the Borrower and its
Subsidiaries is in compliance with all Applicable Laws, including, without
limitation, all Environmental Laws and all Governmental Actions except to the
extent of any non-compliance which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.5. POWER AND AUTHORIZATION; ENFORCEABLE OBLIGATIONS. (a) Each
of the Borrower and its Subsidiaries has full corporate power and authority to
engage in all Project Activities, to conduct its business as now conducted, to
execute, deliver and perform this Agreement and the other Transaction Documents
to which it is a party and each other document to be executed in connection
herewith, to take all action as may be necessary to complete the transactions
contemplated hereunder, including to borrow the Loans and to grant the Liens and
security interests provided for in the Security Documents to which it is a
party.
(b) Each of the Borrower and its Subsidiaries has taken all necessary
corporate and legal action to authorize the borrowings by the Borrower hereunder
on the terms and conditions set forth herein, to grant the Liens provided for in
the Security Documents to which it is a party and to authorize the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party and each other document to be executed in connection
herewith.
(c) Each of this Agreement and the other Financing Documents to which
the Borrower is a party has been duly executed and delivered by the Borrower and
constitutes, and each of the other Financing Documents to which the Borrower or
any of its Subsidiaries is to become a party will, upon execution and delivery
thereof by the Borrower or such Subsidiary, as the case may be, and the other
parties thereto (if any), constitute, a legal, valid and binding obligation of
the Borrower or such Subsidiary enforceable against the Borrower or such
Subsidiary in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally, general
principles of equity (whether considered in a proceeding in equity or law) and
an implied covenant of good faith and fair dealing.
(d) Each of the Project Documents to which the Borrower is a party has
been duly executed and delivered by the Borrower and the Borrower has no reason
to believe that each of the Project Documents has not been duly executed and
delivered by the other parties thereto. Each of the Project Documents
constitutes a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance
64
with its terms and the Borrower has no reason to believe that each of the
Project Documents does not constitute legal, valid and binding obligations of
such other parties enforceable against such other parties in accordance with its
terms, in each case except as enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors generally, general principles of
equity (whether considered in a proceeding in equity or law) and an implied
covenant of good faith and fair dealing.
SECTION 3.6. CORPORATE STRUCTURE. (a) Immediately prior to giving
effect to the transactions contemplated hereby, the capital structure of the
Borrower is as set forth in Schedule 3.6(a).
(b) Except as set forth in Schedule 3.6(b), as of the Closing Date, the
Borrower does not have any Subsidiaries and does not hold beneficially or
otherwise any ownership interest in any other Person.
SECTION 3.7. GOVERNMENTAL ACTIONS, RIGHTS-OF-WAY AND OTHER CONSENTS AND
APPROVALS. (a) No Governmental Actions, Rights-of-Way or other consents or
approvals are required by the Borrower, its Subsidiaries, any Contractor, any
PTT or, to the best knowledge of the Borrower, any other Person in connection
with (i) the Refinancing, (ii) the participation by the Borrower and its
Subsidiaries in the transactions contemplated by this Agreement and the other
Transaction Documents, (iii) the ownership and operation of the Project by the
Borrower, the performance by the Borrower of any Project Activity or the use by
the Borrower of the FLAG System as contemplated by the C&MA (including, without
limitation, the sale, lease or other disposition of Capacity on any Segment of
the Project) in accordance with the applicable provisions of the Transaction
Documents and in compliance with all Applicable Laws, (iv) the validity and
enforceability of the Transaction Documents against the Borrower and its
Subsidiaries and (v) the execution, delivery and performance of the Financing
Documents by the Borrower and its Subsidiaries, the borrowings by the Borrower
hereunder and the grant by the Borrower and its Subsidiaries of the Liens
created pursuant to the Security Documents to which the Borrower or any of its
Subsidiaries is a party and the validity and enforceability thereof and the
perfection of and the exercise by the Collateral Trustee of its rights and
remedies thereunder, except in each case for those Governmental Actions,
Rights-of-Way and consents or approvals which have been duly obtained or made,
are in full force and effect and are Final and those which are not required to
have been obtained or made by the date on which this representation and warranty
is made or deemed made and, as of any date after the Closing Date on which
representations and warranties are made or deemed made under this Agreement,
except where the failure
65
to so obtain such Governmental Actions, Rights-of-Way and consents or approvals
could not reasonably be expected to have a Material Adverse Effect.
(b) To the best of the Borrower's knowledge as of the Closing Date,
Schedule 3.7(b) sets forth all the material Governmental Actions and
Rights-of-Way that are required to be obtained pursuant to any Project Document
or Applicable Law in connection with the performance by the Borrower of the
Project Activities (including, without limitation, the sale, lease or other
disposition of Capacity on any Segment of the Project).
SECTION 3.8. NO LEGAL BAR. (a) The execution, delivery and performance
by the Borrower and its Subsidiaries of this Agreement and the other Financing
Documents to which it is a party, the borrowings by the Borrower hereunder and
the use of the proceeds thereof, the granting of the Liens by the Borrower and
its Subsidiaries under the Security Documents and the consummation of the
Refinancing and the transactions contemplated hereby and thereby, (i) will not
violate or result in a breach of any Applicable Law, (ii) will not violate or
result in a default under any material Contractual Obligation of the Borrower or
any Subsidiary thereof and (iii) will not result in, or require, the creation or
imposition of any Lien on any of the properties or revenues of the Borrower, its
Subsidiaries or the Project, except for Permitted Liens.
(b) The execution, delivery and performance by the Borrower and each
Subsidiary thereof of the Project Documents to which it is a party (i) will not
violate or result in a breach of any Applicable Law or a default under any
material Contractual Obligation of the Borrower or such Subsidiary, except for
any violation, breach or default that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect and (ii) will not
result in, or require, the creation or imposition of any Lien on any of the
properties or revenues of the Borrower, its Subsidiaries or the Project, except
for Permitted Liens.
SECTION 3.9. NO PROCEEDING OR LITIGATION. No litigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the best
of the Borrower's knowledge, threatened against or affecting the Borrower or any
of its Subsidiaries or against or affecting any of the properties, rights,
revenues or assets of the Borrower or any of its Subsidiaries, or the Project or
this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby, except for such litigation or proceedings
described in Schedule 3.9 and except in the case of any litigation or proceeding
occurring or arising after the Closing Date (and as to which the Borrower had no
knowledge prior to the Closing Date) which, if adversely determined, could not
be reasonably expected to have a Material Adverse Effect.
SECTION 3.10. NO DEFAULT, EVENT OF DEFAULT OR EVENT OF LOSS. (a) No
Default or Event of Default has occurred and is continuing. No Event of Loss has
occurred and
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is continuing as of the Closing Date (and, as of any date after the Closing Date
on which representations and warranties are made or deemed made under this
Agreement, no Event of Loss has occurred and is continuing or, if an Event of
Loss has occurred and is continuing as of such date, an EOL Compliance
Certificate has been delivered by the Borrower to the Administrative Agent
pursuant to Section 5.19(a)).
(b) Neither the Borrower nor any of its Subsidiaries is and, to the
best of the Borrower's knowledge, no other party is, (i) in material default
under or with respect to any Principal Project Document (other than any Capacity
Sales Agreement and other than any Maintenance Zone Agreement so long as such
default could not reasonably be expected to have an adverse effect on the
Borrower's ability to maintain the FLAG System or perform its obligations under
the Financing Documents and the Principal Project Documents) or (ii) in default
under or with respect to any other Project Document except for any defaults
under such other Project Documents which could not reasonably be expected to
have a Material Adverse Effect, and no notice of default has been given to or by
the Borrower or any of its Subsidiaries under any Project Document with respect
to any matter which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.11. OWNERSHIP OF PROPERTY; LIENS; COMMON STOCK. (a) As of the
Closing Date (and on each date on which representations and warranties are made
or deemed made under this Agreement), the Borrower and its Subsidiaries have
good and valid title to (or, if applicable, valid leasehold interests or rights
of use in) the Collateral, to all of their respective assets comprising a part
of the Project and to all of their respective other assets free and clear of all
Liens except Permitted Liens. The Rights-of-Way granted to the Borrower are free
and clear of all Liens other than Permitted Liens.
(b) The recordings, filings and other actions shown on Schedule 3.11(b)
are all the recordings, filings and other actions necessary and appropriate to
establish, protect and perfect the Collateral Trustee's Lien on and prior
perfected security interest in the Subject Collateral. The provisions of the
Security Documents (together with such recordings, filings and actions) are
effective to create, in favor of the Collateral Trustee, for the benefit of the
Secured Parties, a legal, valid and enforceable lien on and security interest in
all of the Collateral and, from and after the Closing Date, the Collateral
Trustee has a legal, valid and enforceable first lien on and prior perfected
security interest in all of the Subject Collateral.
(c) All of the Pledged Stock has been duly authorized and validly
issued and is fully paid and non-assessable. There are no outstanding
obligations of the Borrower to repurchase, redeem or otherwise acquire any
Capital Stock (or any security convertible into or exchangeable for the same) of
the Borrower from any Shareholder other than in respect of the Existing
Preferred Stock.
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SECTION 3.12. TAXES. (a) Neither the Borrower, any of its Subsidiaries,
the Project nor any of their respective assets or revenues (including any
Capacity Payments and O&M Payments) is subject to any Tax in any jurisdiction,
except for Taxes in an aggregate amount for any Operating Year not exceeding 5%
of the Borrower's Consolidated EBITDA for such Operating Year.
(b) All clearance rulings, decrees or similar items necessary to
establish the exemption from the imposition of any Tax or similar charge (other
than Taxes or other charges in an aggregate amount not to exceed the amount
referred to in paragraph (a) of this Section) upon which the Borrower or any of
its Subsidiaries is relying under the laws of Bermuda or any other jurisdiction
on its income, assets, operations or revenues have been obtained, are in full
force and effect and are Final.
(c) Each of the Borrower and its Subsidiaries has timely filed or
caused to be filed all tax returns which are required to be filed by it, and has
paid or caused to be paid all Taxes shown to be due and payable on such returns
or on any assessments made against it or any of its property and has paid or
caused to be paid all other Taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority, except for Taxes subject to a
Contest and except with respect to the delay in filing tax returns in respect of
Thailand for fiscal 1996 and interim 1997 and a late filing of a protective
return in the United States for 1996, in each case to which no taxes, penalties
or fees (other than nominal penalties or fees) are associated.
SECTION 3.13. FEDERAL REGULATIONS. Neither the Borrower nor any of its
Subsidiaries is engaged nor will it engage in the business of extending credit
for the purpose of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulations G, U and X of
the Board as now and from time to time hereafter in effect. No part of the
proceeds of the Loans will be used for "purchasing" or "carrying" any "margin
stock" as so defined or for any purpose which violates, or which would be
inconsistent with, the provisions of the Regulations of the Board.
SECTION 3.14. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
have a Material Adverse Effect, and no contribution failure has occurred with
respect to any Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA.
SECTION 3.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its
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Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.16. FULL DISCLOSURE. All factual information (taken as a
whole) furnished in writing to the Collateral Trustee, the Administrative Agent
or any Lender directly or indirectly by the Borrower or any of its Subsidiaries
was (or is) true and accurate in all material respects on the date as of which
such information was (or is) dated or certified and not incomplete by omitting
to state a material fact necessary in order to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was (or is) provided. All such
factual information (taken as a whole) shall not include any information by way
of projections, estimates or other expressions of view as to future
circumstances so long as such projections, estimates or expressions were made in
good faith, based on reasonable assumptions, and fairly represent the Borrower's
expectation as to the matter covered thereby as of their date.
SECTION 3.17. PRINCIPAL PLACE OF BUSINESS, ETC. As of the Closing Date,
the principal place of business and chief executive office of the Borrower is
located at 00 Xxx-xx-Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx.
SECTION 3.18. INTELLECTUAL PROPERTY. (a) Each of the Borrower and its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted and proposed to be
conducted that are material to the condition (financial or other), business, or
operations of the Borrower, its Subsidiaries or the Project.
(b) No claim has been asserted and is pending by any Person with
respect to the use of any such Intellectual Property in connection with the
Project or the conduct of the business of the Borrower or any of its
Subsidiaries, or, to the Borrower's best knowledge, challenging or questioning
the validity or effectiveness of any such Intellectual Property (except for any
claim or claims arising after the Closing Date which individually or in the
aggregate could not, if determined adversely to the Borrower or such Subsidiary,
as applicable, reasonably be expected to have a Material Adverse Effect) and
neither the Borrower nor any of its Subsidiaries knows of any valid basis for
any such claim.
(c) As of the Closing Date and to the Borrower's best knowledge, the
use or contemplated use of such Intellectual Property by the Borrower and any of
its Subsidiaries does not infringe on the rights of any Person and, as of any
date after the Closing Date on which representations and warranties are made or
deemed made under this Agreement, except for any infringement which
individually, or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
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SECTION 3.19. SUFFICIENCY OF PROJECT DOCUMENTS. (a) Other than such
services, materials, property interests, license agreements and other rights
that the Borrower reasonably believes are readily obtainable on commercially
reasonable terms, the services to be performed, the materials to be supplied and
the property interests, license agreement(s), and other rights granted pursuant
to the Project Documents and other Contractual Obligations to which the Borrower
is a party comprise all of the services, materials and property interests
required to perform the Project Activities in accordance with all Applicable
Laws and the Transaction Documents.
(b) The Borrower is not, as of the Closing Date, party to or otherwise
obligated in any way under any material Contractual Obligation other than those
listed on Schedule 3.19(b) and such Contractual Obligations have not been
amended or otherwise modified (by letter agreement or otherwise) as of the
Closing Date, except as set forth on Schedule 3.19(b). Schedule 3.19(b) sets
forth each Contractual Obligation of the Borrower or, to the best of the
Borrower's knowledge, other Person which could have an adverse effect on the
Collateral or on the availability of the remedies of the Collateral Trustee, the
Administrative Agent or the Lenders under the Financing Documents.
SECTION 3.20. ENVIRONMENTAL MATTERS. No condition or violation of
Environmental Laws exists with respect to the Project, the Borrower, its
Subsidiaries, any property owned or operated by the Borrower or its Subsidiaries
or otherwise that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.21. COMMERCIAL INSURANCE. All commercial insurance policies
required to be maintained pursuant to Section 5.9 are in full force and effect
and all premiums with respect thereto have been paid in full.
SECTION 3.22. IMMUNITY. Neither the Borrower nor any of its
Subsidiaries is entitled to claim for itself, any of its assets or the Project
(or any portion thereof) immunity from suit, execution, attachment or other
legal process in any proceedings in any jurisdiction in connection with any of
the Financing Documents to which the Borrower or any of its Subsidiaries is a
party.
SECTION 3.23. FOREIGN CORRUPT PRACTICES ACT. Neither the Borrower nor
any of its Subsidiaries nor any of their respective officers, directors,
employees, or authorized agents or any of their affiliates which are Controlled
by the Borrower, acting on its behalf, has taken any action in connection with
the Project that violates the Foreign Corrupt Practices Act of the United
States, if applicable, or any similar law of any other jurisdiction, if
applicable.
SECTION 3.24. FEES AND ENFORCEMENT. Other than amounts that have been
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paid in full, no fees or Taxes, including without limitation stamp, transaction,
registration or similar taxes, are required to be paid for the legality,
validity, or enforceability of this Agreement or any of the other Transaction
Documents.
SECTION 3.25. ENFORCEMENT; PERFORMANCE. It is not necessary solely (i)
in order to execute or enforce any rights in Bermuda under this Agreement or
under any other Financing Document to which the Borrower is a party or (ii) by
reason of the entry into or performance of this Agreement or any other Financing
Document to which the Borrower is a party, that the Collateral Trustee, the
Administrative Agent or any Lender be licensed, qualified or entitled to do
business in Bermuda.
SECTION 3.26. AVAILABLE CAPACITY. Schedule 3.26 sets forth, as of the
date hereof, the amount of Capacity on each Segment available for the sale,
lease, transfer or other disposition.
SECTION 3.27. OUTSTANDING CONTRACTOR OBLIGATIONS. (a) As of the Closing
Date, the Total Contract Price is $1,136,332,524, of which $840,110,124 has been
paid in full to the Contractors. As of the Closing Date, the Borrower does not
owe any amounts to any Contractor other than in respect of amounts which have
been provided for as of the Closing Date in the Contractor Escrow Account and
the Construction Account.
(b) As of the Closing Date, there are no disputes between the Borrower
and the Contractors with respect to amounts owing under the Construction
Contract. As of the Closing Date, there are no disputes between the Borrower and
the Contractors with respect to the performance of any obligations under the
Construction Contract or otherwise, except those that have been disclosed to the
Independent Engineer.
ARTICLE IV
CONDITIONS
SECTION 4.1. CONDITIONS PRECEDENT TO CLOSING. The obligation of each
Lender to make its initial Loans on the Closing Date shall be subject to the
fulfillment, or waiver in its sole discretion by such Lender, of each of the
following conditions precedent:
(a) UNREGISTERED NOTES. Simultaneously with the making of the
initial Loans on the Closing Date, the Unregistered Notes shall be
issued, and the Borrower shall receive gross proceeds of not less than
$430 million therefrom,
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substantially on the terms set forth in the Senior Unsecured Note
Offering Memorandum.
(b) SENIOR UNSECURED NOTE DOCUMENTS. The Administrative Agent
shall have received, with a copy for each Lender and the Collateral
Trustee, true and complete copies of each Senior Unsecured Note
Document (other than the Senior Unsecured Notes), certified as such by
a Responsible Officer of the Borrower as of the Closing Date.
(c) FINANCING DOCUMENTS. The Administrative Agent shall have
received, with a counterpart for each Lender and the Collateral
Trustee, each of the following documents:
(i) this Agreement, duly executed and delivered
by each of the parties hereto;
(ii) each Pledge Agreement, duly executed and
delivered by the Shareholder party thereto in favor of the
Collateral Trustee, for the benefit of the Secured Parties,
together with (A) the stock certificates representing all of
the Capital Stock of the Borrower owned by such Shareholder,
(B) undated stock powers for each stock certificate
representing such Capital Stock, executed in blank and
delivered by a duly authorized representative of such
Shareholder, (C) undated transfer certificates for each stock
certificate representing such Capital Stock, executed in blank
and delivered by a duly authorized officer of such Shareholder
and (D) a proxy of such Shareholder in the form attached to
the Pledge Agreement to which such Shareholder is a party,
executed and delivered by a duly authorized officer of such
Shareholder;
(iii) the Borrower Security Agreement, duly
executed and delivered by the Borrower in favor of the
Collateral Trustee, for the benefit of the Secured Parties;
and
(iv) the Registrar and Transfer Agent Agreement,
duly executed and delivered by the parties thereto.
(d) PROJECT DOCUMENTS. The Administrative Agent shall have
received, with a copy for the Collateral Trustee and each Lender
(unless otherwise specified below), each of the following documents:
(i) a true and complete copy of the Construction
Contract, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date and as being in full force
and effect (and, with respect to the copies delivered to the
Collateral Trustee and the Lenders, only the Terms
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and Conditions of Contract are required to be delivered);
(ii) a true and complete copy of the AT&T
Construction Contract Guaranty, duly certified as such by a
Responsible Officer of the Borrower as of the Closing Date and
as being in full force and effect;
(iii) a true and complete copy of the KDD
Construction Contract Guaranty, duly certified as such by a
Responsible Officer of the Borrower as of the Closing Date and
as being in full force and effect;
(iv) a true and complete copy of the C&MA, duly
certified as such by a Responsible Officer of the Borrower as
of the Closing Date and as being in full force and effect
(and, with respect to the copies delivered to the Collateral
Trustee and the Lenders, the C&MA may exclude amendments which
solely add a signatory thereto);
(v) for delivery to the Administrative Agent
only, a true and complete copy of each then outstanding
Capacity Sales Agreement executed by the Borrower, duly
certified as such by a Responsible Officer of the Borrower as
of the Closing Date and as being in full force and effect;
(vi) a true and complete copy of the Software
Development and License Agreement, duly certified as such by a
Responsible Officer of the Borrower as of the Closing Date and
as being in full force and effect;
(vii) a true and complete copy of the Technology
Escrow Deposit Agreement, duly certified as such by a
Responsible Officer of the Borrower as of the Closing Date and
as being in full force and effect;
(viii) for delivery to the Administrative Agent
only, a true and complete copy of each Maintenance Zone
Agreement, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date and as being in full force
and effect;
(ix) a true and complete copy of the Program
Management Agreement, duly certified as such by a Responsible
Officer of the Borrower as of the Closing Date and as being in
full force and effect;
(x) a true and complete copy of the Marketing
Services
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Agreement, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date and as being in full force
and effect;
(xi) a true and complete copy of the
Shareholder Agreement, duly certified as such by a Responsible
Officer of the Borrower as of the Closing Date and as being in
full force and effect;
(xii) for delivery to the Administrative Agent
only, a true and complete copy of the Equity Subscription
Agreement, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date and as being in full force
and effect; and
(xiii) for delivery to the Administrative Agent
only, a true and complete copy of the Existing Preferred Stock
Documents, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date.
(e) PERFORMANCE BOND. The Collateral Trustee shall have
received a true and complete original counterpart of the Performance
Bond (in a stated amount as of the Closing Date not less than
$113,633,252), together with the amendment thereto which substitutes
the Collateral Trustee as the Beneficiary thereof, duly certified as
such by a Responsible Officer of the Borrower as of the Closing Date
and as being in full force and effect.
(f) CONSENTS. The Administrative Agent shall have received,
with a copy for the Collateral Trustee and each Lender:
(i) the Contractor Consent, duly executed and
delivered by the parties thereto;
(ii) the AT&T Guaranty Consent, duly executed
and delivered by the parties thereto;
(iii) the KDD Guaranty Consent, duly executed
and delivered by the parties thereto;
(iv) the Xxxx Atlantic Shareholder Consent,
duly executed and delivered by the parties thereto; and
(v) the BANS Consent, duly executed and
delivered by the parties thereto.
(g) EXISTING SPONSOR SUBORDINATED PLEDGE AGREEMENTS. The
Administrative Agent shall have received evidence reasonably
satisfactory to it
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that the Liens created by the Existing Sponsor Subordinated Pledge
Agreements shall have been terminated.
(h) REDEMPTION OF EXISTING PREFERRED STOCK. The Administrative
Agent shall have received evidence reasonably satisfactory to it that,
simultaneously with the making of the initial Loans on the Closing
Date, the Existing Preferred Stock is being redeemed pursuant to the
Redemption Letter Agreement and the Administrative Agent shall have
received a certificate of a Responsible Officer of the Borrower
certifying as of the Closing Date that, other than the Redemption
Letter Agreement, no other agreements have been entered into with the
Existing Preferred Shareholders or any of their Affiliates in
connection with the redemption of the Existing Preferred Stock.
(i) REFINANCING. The Administrative Agent shall have received
evidence reasonably satisfactory to it that, simultaneously with the
making of the initial Loans on the Closing Date, all Refinanced
Indebtedness is being paid in full and all Liens securing such
Indebtedness are being terminated.
(j) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent
shall have received evidence reasonably satisfactory to it that all
governmental and third party approvals (including consents) necessary
in connection with the consummation of the Refinancing and the
execution, delivery and performance of the Financing Documents shall
have been obtained and shall be in full force and effect and shall be
Final.
(k) EQUITY CONTRIBUTIONS. The Administrative Agent shall have
received a certificate of a Responsible Officer of the Borrower
certifying that, as of the Closing Date, (i) the Shareholders (other
than Gulf, GE Capital and AT&T Capital) made cash equity contributions
to the Borrower pursuant to the Existing Equity Contribution Agreements
in an aggregate amount not less than $500,000,000 and (ii) such cash
equity contributions were used in respect of Project Activities (or, to
the extent any such funds were not yet expended and are, as of the
Closing Date, being held by the Existing Collateral Trustee, such funds
are, simultaneously with the making of the initial Term Loans
hereunder, being (x) used to prepay the Refinanced Indebtedness, (y)
transferred to the Contractor Escrow Account or one or more of the
Accounts or (z) held by the Borrower in a bank account in accordance
with Section 6.27, in each case consistent with the schedule of
"sources and uses" referred to in Section 4.1(l)).
(l) SOURCES AND USES. The Administrative Agent shall have
received, with a copy for the Collateral Trustee and each Lender, a
schedule, in form and
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substance reasonably satisfactory to the Administrative Agent, which
sets forth in reasonable detail the "sources and uses" of funds
necessary to consummate the Refinancing.
(m) ACCOUNT BALANCES. The Administrative Agent shall have
received, with a copy for the Collateral Trustee and each Lender, a
certificate of a Responsible Officer of the Borrower certifying, as of
the Closing Date and before giving effect to the Refinancing (i) the
aggregate amount of funds and other investments then being held by the
Existing Collateral Trustee and the amount of accrued interest thereon
and (ii) the aggregate amount of all funds and investments held by the
Borrower in any other bank account, checking account or similar
account.
(n) TRANSFER OF FUNDS. The Administrative Agent shall have
received evidence reasonably satisfactory to it that, simultaneously
with the making of the initial Loans, all funds and investments of the
Borrower, together with all accrued interest thereon, are being (i)
used to prepay the Refinanced Indebtedness and redeem the Existing
Preferred Stock, (ii) transferred to the Contractor Escrow Account or
one or more of the Accounts or (iii) held in a bank account of the
Borrower in accordance with Section 6.27, all in accordance with the
schedule of "sources and uses" referred to in Section 4.1(l).
(o) LEGAL OPINIONS. The Administrative Agent shall have
received, with a counterpart for the Collateral Trustee and each
Lender, the following opinions of counsel, dated the Closing Date, each
in form and substance reasonably satisfactory to the Administrative
Agent and addressed to each of the Secured Parties:
(i) the legal opinion of Xxxxxx, Xxxxx &
Bockius LLP, New York counsel to the Borrower, substantially
in the form of Exhibit N-1;
(ii) the legal opinion of Xxxxxx Xxxxx, Esq.,
in-house counsel to the Borrower, substantially in the form of
Exhibit N-2;
(iii) the legal opinion of Xxxxxx, Westwood &
Riegels, British Virgin Islands counsel to Xxxxxxxx,
substantially in the form of Exhibit N-3;
(iv) the legal opinion of Xxxxxxx, Xxxxxxxx &
Kempe, Bermuda counsel to Marubeni Telecom, substantially in
the form of Exhibit N-4;
(v) the legal opinion of Xxxxxx X. Xxxxxxxxx,
Xx., Esq., in-house counsel to Marubeni Telecom, substantially
in the form of Exhibit
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N-5;
(vi) the legal opinion of X.X. Xxxxxx &
Company, Cayman Islands counsel to AIF, substantially in the
form of Exhibit N-6;
(vii) the legal opinion of Xxxxx & XxXxxxxx,
Thai counsel to KIN, substantially in the form of Exhibit N-7;
(viii) the legal opinion of Xxxx Xxxx, Esq.,
in-house counsel to the Xxxx Atlantic Shareholder,
substantially in the form of Exhibit N-8;
(ix) the legal opinion of Xxxxxxx Xxxxxxxx,
Esq., in-house counsel to AT&T Capital, substantially in the
form of Exhibit N-9;
(x) the legal opinion of Xxxxxx Xxxxxx, Esq.,
in-house counsel to GE Capital, substantially in the form of
Exhibit N-10;
(xi) the legal opinion of Mello, Hollis,
Xxxxx & Xxxxxx, Bermuda counsel to GE Capital, substantially
in the form of Exhibit N-11;
(xii) the legal opinion of Mello, Hollis,
Xxxxx & Xxxxxx, Bermuda counsel to the Collateral Trustee,
substantially in the form of Exhibit N-12; and
(xiii) the legal opinion of Xxxxxxx Xxxx &
Xxxxxxx, Bermuda counsel to the Lenders, substantially in the
form of Exhibit N-13.
(p) INDEPENDENT ENGINEER'S REPORT. The Administrative Agent
shall have received, with a copy for each Lender, a report of the
Independent Engineer, dated as of the Closing Date, in form and
substance reasonably satisfactory to the Administrative Agent.
(q) MARKET CONSULTANT'S REPORT. The Administrative Agent shall
have received, with a copy for each Lender, the final report of the
Market Consultant, dated October 1997, and the Administrative Agent
shall have received no information from the Market Consultant which
would make such report inaccurate or incomplete.
(r) BORROWER'S INSURANCE CONSULTANT'S REPORT. The
Administrative Agent shall have received, with a copy for each Lender,
a report of the
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Borrower's Insurance Consultant, dated as of the Closing Date, in form
and substance reasonably satisfactory to the Administrative Agent.
(s) INSURANCE. Insurance complying with the provisions of
Section 5.9 shall be in full force and effect and the Administrative
Agent shall have received (i) certificates of insurance signed in each
case by the insurer or an agent authorized to bind the insurer and (ii)
a certificate of the Borrower's Insurance Consultant, setting forth the
types and amounts of insurance obtained by the Borrower and the risks
covered thereby, and stating that such insurance is in full force and
effect, complies with the requirements of Section 5.9 and that all
currently due premiums therefor have been paid in full. The Borrower's
Insurance Consultant shall have approved the insurance policies,
applications, disclosures and other information provided to or obtained
from, as the case may be, all insurers providing the insurance required
pursuant to Section 5.9.
(t) FINANCIAL STATEMENTS. The Administrative Agent shall have
received, with a copy for each Lender (i) the audited balance sheet and
related financial statements of the Borrower for the fiscal year ended
December 31, 1996, certified without qualification or exception as to
the scope of its audit by Xxxxxx Xxxxxxxx & Co., (ii) the unaudited
balance sheet and related financial statements of the Borrower for the
fiscal period ended September 30, 1997, certified by a Responsible
Officer of the Borrower as of the Closing Date and (iii) the unaudited
PRO FORMA balance sheet of the Borrower, as at September 30, 1997,
certified by a Responsible Officer of the Borrower (prepared assuming
the Refinancing and the initial extensions of credit hereunder occurred
on September 30, 1997).
(u) PROJECTIONS. The Administrative Agent shall have received,
with a copy for each Lender, operating projections for the Project
certified by a Responsible Officer of the Borrower as being prepared in
good faith in full consideration of all information known to such
officer, after due inquiry, as of the Closing Date (the "OPERATING
PROJECTIONS"), setting forth (i) the projections of revenues, operating
and other expenses (including all Taxes) and cash flows of the Project
for each Operating Year prior to December 31, 2006 and (ii) the
projected Present Value Coverage Ratios and the Cumulative Net Revenue
for each quarterly period set forth therein, all in such detail and
based on such assumptions as shall be reasonably satisfactory to the
Administrative Agent, which Operating Projections shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(v) TAXES. All Taxes, if any, payable or indemnifiable by the
Borrower on or prior to the Closing Date in connection with the
execution, delivery, performance, recording and filing of the Financing
Documents and the
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documents and instruments described in Schedule 3.11(b) or in
connection with the consummation of the transactions contemplated
hereby or by the other Financing Documents, shall have been paid in
full.
(w) CERTIFICATE OF PROVISIONAL SYSTEM ACCEPTANCE; PSA 2. The
Certificate of Provisional System Acceptance shall have been issued.
The Administrative Agent shall have received a certificate of the
Independent Engineer certifying that PSA 2 has occurred.
(x) OUTSTANDING CONSTRUCTION COSTS. The Administrative Agent
shall have received, with a copy for the Collateral Trustee and each
Lender, a certificate of a Responsible Officer of the Borrower,
substantially in the form of Exhibit K (the "CONSTRUCTION COST
CERTIFICATE") certifying as of the Closing Date all payments (including
interest) remaining to be paid to the Contractors (under the
Construction Contract or otherwise), together with all other costs
which are not set forth in the initial Operating Budget and are payable
by the Borrower to any other Person in respect of the construction,
installation and start-up of the Project.
(y) PAYMENT OF PROJECT COSTS. The Administrative Agent shall
have received evidence reasonably satisfactory to it that,
simultaneously with the making of the initial Loans hereunder (i) the
Contractor Escrow Account is being funded with an amount equal to all
payments remaining to be paid to the Contractors under the Construction
Contract and (ii) the Construction Account is being funded with an
amount equal to all other costs remaining to be paid to any Person in
respect of the construction and installation of the Project, in each
case consistent with the schedule of "sources and uses" referred to in
Section 4.1(l).
(z) CAPACITY COMMITMENTS. The Administrative Agent shall have
received a certificate of a Responsible Officer of the Borrower
certifying as of the date hereof (i) the aggregate amount of Capacity
Payments received to date and the aggregate amount of Capacity sold in
respect thereof (on a Segment by Segment basis), (ii) the aggregate
amount of Capacity Payments outstanding, the date such Capacity
Payments become due and payable, each PTT obligated therefor, the
amount of Capacity purchased by such PTT, the relevant Segments and
correspondents and the purchase price therefor and (iii) such other
information as is set forth on Schedule 1.1(c).
(aa) PRICING SCHEDULE. The Borrower shall have delivered to
the Administrative Agent, with a copy for each Lender, the initial
Pricing Schedule, certified as such as of the Closing Date by a
Responsible Officer of the Borrower.
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(bb) GOVERNMENTAL ACTIONS; RIGHTS-OF-WAY. The Administrative
Agent shall have received a certificate of a Responsible Officer of the
Borrower that all Governmental Actions and Rights-of-Way set forth in
Section 3.7(a) have been obtained and that each such Governmental
Action and Right-of-Way is in full force and effect and is Final. A
copy of each such Governmental Action and Right-of-Way (to the extent
in writing and in the Borrower's possession) shall have been delivered
to the Administrative Agent.
(cc) OPERATING BUDGET. The Administrative Agent shall have
received, with a copy for each Lender, an Operating Budget for the
initial Operating Year which shall be consistent with the Operating
Projections and shall otherwise be in form and substance reasonably
satisfactory to the Administrative Agent.
(dd) RESTORATION PLAN. The Administrative Agent shall have
received a true and complete copy of a plan developed by the Borrower
and approved by the Management Committee (or any subcommittee thereof)
in respect of restoration for the FLAG System (the "RESTORATION PLAN"),
certified as such by a Responsible Officer of the Borrower as of the
Closing Date, and the Administrative Agent shall have received evidence
reasonably satisfactory to it that the Restoration Plan has been
implemented.
(ee) OPERATIONS AND MAINTENANCE PLAN. The Administrative Agent
shall have received a true and complete copy of the Operations and
Maintenance Plan, duly certified as such by a Responsible Officer of
the Borrower as of the Closing Date.
(ff) CHARTER DOCUMENTS; BOARD RESOLUTIONS. The Administrative
Agent shall have received, with a copy for each Lender, the following,
in each case in form and substance reasonably satisfactory to the
Administrative Agent:
(i) a copy of (A) the Memorandum of Association
and Bye-laws of the Borrower, certified as of the Closing Date
by the Secretary or an Assistant Secretary thereof, and (B)
resolutions of the Board of Directors of the Borrower,
certified as of the Closing Date by the Secretary or an
Assistant Secretary thereof, authorizing the execution,
delivery and performance by the Borrower of each Financing
Document to which it is or is to become a party and
authorizing the Borrower to enter into the transactions
contemplated hereby and to make the borrowings under this
Agreement and grant the Liens under the Security Documents to
which it is a party, together with an incumbency certificate
as to the Person or Persons authorized to execute and deliver
such documents on
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its behalf; and
(ii) a copy of (A) the Certificate of
Incorporation of and By-Laws (or such other organizational and
governing documents) of each Shareholder (other than Gulf),
certified as of the Closing Date by the Secretary or Assistant
Secretary of such Shareholder and (B) resolutions of the Board
of Directors of each Shareholder (other than Gulf), certified
as of the Closing Date by the Secretary or an Assistant
Secretary of such Shareholder, duly authorizing the execution,
delivery and performance by such Shareholder of each Financing
Document to which it is or is to become a party and grant the
Liens under the Security Documents to which it is a party,
together with an incumbency certificate as to the Person or
Persons authorized to execute and deliver such documents on
its behalf.
(gg) OFFICER'S CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower, dated the Closing Date, stating
that (i) the representations and warranties of the Borrower contained
in Article III and in each other Financing Document to which it is a
party are true and accurate on and as of the Closing Date as though
made on and as of such date except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate on and as of such earlier date); (ii) no event or condition
has occurred and is continuing, or would result from the consummation
of any transaction contemplated by the Refinancing, the other
transactions contemplated hereby or any Financing Document, which
constitutes a Default or Event of Default; (iii) each Project Document
to which it is a party has been fully performed in accordance with its
terms or, if such Project Document continues to have outstanding
obligations, the Borrower has no reason to believe that such Project
Document is not in full force and effect and (iv) there has been no
material adverse change in the financial condition or results of
operations of the Borrower since the date of the financial statements
referred to in Section 4.1(t).
(hh) AGENT FOR SERVICE OF PROCESS. The Administrative Agent
shall have received evidence reasonably satisfactory to it that the
Borrower and each Shareholder (other than Gulf, AT&T Capital and GE
Capital) that does not have an office in New York, New York, has
irrevocably appointed an agent in New York, New York for service of
process.
(ii) FEES AND EXPENSES. The Administrative Agent and the
Arranger shall have received the fees payable to it on the Closing Date
pursuant to the Fee Letter and all other fees and expenses payable by
the Borrower. Each Lender
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shall have received the fees which are payable to it on the Closing
Date as agreed by the Administrative Agent and such Lender.
(jj) NO VIOLATION OF APPLICABLE LAW. The consummation of the
Refinancing and the other transactions contemplated hereby and by the
other Transaction Documents shall not violate any Applicable Law.
(kk) PERFECTION OF LIENS AND SECURITY INTERESTS. The
Administrative Agent shall have received a certificate by a Responsible
Officer of the Borrower certifying that, as of the Closing Date, all
filings, recordings and other actions shown on Schedule 3.11(b) hereto
shall have been duly made or taken and all fees, taxes and other
charges relating to such filings and recordings and other actions shall
have been paid in full. The Administrative Agent shall have received
evidence reasonably satisfactory to it that all filings or recordings,
if any, previously made in respect of the Collateral shall have been
terminated pursuant to documentation reasonably satisfactory to the
Administrative Agent. The Collateral Trustee shall have a perfected
first lien on and prior perfected security interest in all right,
title, estate and interest of the Borrower or the Shareholders (other
than Gulf), as the case may be, in and to the Subject Collateral, prior
and superior to all other Liens.
(ll) OTHER MATTERS. The Administrative Agent and the Lenders
shall have each received such information, opinions, documents and
copies of such other documents as any of them may reasonably request,
which information, opinions and documents shall be reasonably
satisfactory in form and substance to such requesting party.
SECTION 4.2. CONDITIONS PRECEDENT TO EACH LOAN. The obligation of each
Lender to make each Loan requested to be made on any date (including, without
limitation, its Loans made on the Closing Date) shall be subject to the
fulfillment of, or waiver by the Majority Lenders (or, with respect to Loans
made on the Closing Date, by such Lender) of, each of the following conditions
precedent:
(a) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date, or shall
occur after giving effect to the extension of credit to be made on such
date.
(b) PRESENT VALUE COVERAGE RATIO TESTS. With respect to the
making of any Revolving Credit Loan, each of the Present Value Coverage
Ratios calculated as of the end of the most recent calendar quarter
shall be no less than 1.5 to 1.00.
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(c) NO CHANGE IN LAW. No change shall have occurred after the
Closing Date in any Applicable Law or in the interpretation thereof by
any Governmental Authority charged with the administration or
interpretation thereof (i) which would make any Secured Party's
participation in the transactions contemplated hereby illegal or (ii)
which would render void, voidable or invalid or require or cause the
cancellation, suspension or termination of any of the Financing
Documents, or (iii) which would cause any of the transactions
contemplated hereby to violate any Applicable Law, other than any
change in Applicable Law provided for in Section 2.12(b).
(d) NO FORCE MAJEURE, CANCELLATION, SUSPENSION, TERMINATION,
ETC. No event of FORCE MAJEURE or similar event or condition shall
exist under any Project Document (i) which could reasonably be expected
to have a Material Adverse Effect or (ii) which permits or requires any
party to any of the Project Documents to cancel, suspend or terminate
its performance thereunder in accordance with the terms thereof or
which could reasonably be expected to excuse any such party from
liability for non-performance thereunder unless such cancellation,
suspension or termination or non-performance could not reasonably be
expected to have a Material Adverse Effect.
(e) LITIGATION. No action, proceeding or investigation shall
have been instituted or threatened by or before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority, to set aside,
restrain, enjoin, limit, restrict or prevent the consummation of the
Refinancing.
(f) REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Borrower and any of its Subsidiaries (and, if
such date is the Closing Date, each Shareholder (other than Gulf)) in
this Agreement or in any other Financing Document to which it shall be
a party shall be true and correct in all material respects on and as of
such date as if made on and as of such date except to the extent that
such representations and warranties relate solely to an earlier date
(in which case such representations and warranties shall have been true
and accurate in all material respects on and as of such earlier date).
(g) PERFECTION OF LIENS AND SECURITY INTERESTS. The Collateral
Trustee shall have a perfected first lien on and prior perfected
security interest in all right, title, estate and interest of the
Borrower, any Subsidiary of the Borrower and the Shareholders (other
than Gulf) in and to the Subject Collateral, prior and superior to all
other Liens.
(h) BORROWING REQUEST. The Administrative Agent shall have
received the
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applicable Borrowing Request in accordance with Section 2.3, with
appropriate insertions and attachments, executed by a Responsible
Officer of the Borrower.
(i) BORROWING CERTIFICATE. The Administrative Agent shall have
received a Borrowing Certificate, dated the date of such Borrowing,
with appropriate insertions and attachments, executed by a Responsible
Officer of the Borrower.
ARTICLE V
AFFIRMATIVE COVENANTS
Until all the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other obligations
payable hereunder and under the other Financing Documents shall have been paid
in full, the Borrower covenants and agrees with the Administrative Agent, the
Collateral Trustee and the Lenders that:
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower
shall deliver to the Administrative Agent, with a copy for each Lender, the
following:
(a) within 90 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related
consolidated statements of income, retained earnings and change in cash
flow as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported
on by independent public accountants of recognized national standing
reasonably acceptable to the Administrative Agent (without
qualification or exception as to the scope of such audit) to the effect
that such financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower (commencing with
the fiscal quarter ending March 31, 1998), a consolidated balance sheet
of the Borrower as of the end of such fiscal quarter and the related
consolidated statements of income, retained earnings and change in cash
flow for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a
Responsible Officer of the Borrower as presenting fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries in accordance with GAAP
consistently applied, subject to normal
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year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of the financial statements
referred to in clauses (a) and (b), a certificate of a Responsible
Officer of the Borrower certifying to such officer's knowledge whether
a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with
respect thereto;
(d) concurrently with any delivery of the financial statements
referred to in clause (a), a certificate of the independent public
accountants who certified such financial statements, if available from
such independent public accountants, stating that in making the
examination necessary to the audit thereof no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate (which certificate may be limited to the extent permitted
by accounting rules or guidelines);
(e) simultaneously with the delivery of any Expense
Certificate in accordance with Section 8.10(a), to the Administrative
Agent only, a certificate of a Responsible Officer of the Borrower
setting forth all Operating Expenses, capital expenditures and income
taxes paid out of the Current Account since the date of the last
Expense Certificate (and, in the case of the delivery of the first
Expense Certificate, since the Closing Date), with, if applicable,
invoices attached thereto; and
(f) such other information respecting the conditions or
operations, financial or otherwise, of the Borrower or any Subsidiary
thereof as the Administrative Agent may from time to time reasonably
request.
SECTION 5.2. REPORTS; OTHER INFORMATION. (a) The Borrower shall deliver
to the Administrative Agent within 30 days after the end of each calendar
quarter (commencing with the calendar quarter ending on December 31, 1997) a
report which sets forth (i) the aggregate proceeds received in respect of the
sale, lease or other disposition of Capacity since the end of the previous
calendar quarter, (ii) the aggregate amount of Capacity Payments owing, but not
yet paid, as at the end of such calendar quarter and the date such Capacity
Payments become (or became) due, (iii) a list of the PTT's who have purchased or
leased Capacity and the aggregate dollar value of Capacity acquired by each such
PTT during such calendar quarter, (iv) the aggregate MIUs disposed of during
such calendar quarter, together with a Schedule detailing the allocation thereof
among the Segments, (v) any termination of commitments for the sale, lease or
other disposition of Capacity during such calendar quarter, (vi) the
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aggregate amount of Capacity disposed of for non-cash consideration during such
calendar quarter, and (vii) any and all rebates or other returns of cash to PTTs
during such calendar quarter.
(b) The Borrower shall deliver to the Administrative Agent, with a copy
for the Collateral Trustee and each Lender, within 20 days after the end of each
calendar quarter, a certificate of a Responsible Officer of the Borrower setting
forth (i) reasonably detailed calculations of the Cumulative Net Revenue and the
Present Value Coverage Ratios calculated as of the end of such calendar quarter
in accordance with Sections 6.31 and 6.32 and (ii) if such calculations
demonstrate that a Designated Event shall have occurred and be continuing, a
certification thereof and the reduction, if any, to the aggregate Revolving
Credit Commitments as required by Section 2.6(e).
(c) Within three Business Days prior to each Principal Payment Date,
the Borrower shall deliver to the Administrative Agent, with a copy for the
Collateral Trustee, a certificate setting forth (i) the Required Balance with
respect to the Debt Reserve Account and the Maintenance Reserve Account, as of
such date and (ii) the Supplemental Debt Reserve Maximum Balance as of such
date.
(d) The Borrower shall deliver to the Administrative Agent each new
Pricing Schedule effective upon its adoption.
(e) The Borrower shall deliver to the Administrative Agent the
information set forth on Schedule 1.1(c) on the dates set forth therein.
SECTION 5.3. PAYMENT OF OBLIGATIONS. The Borrower shall pay, and shall
cause each of its Subsidiaries to pay, at or before maturity or before they
become delinquent, as the case may be, all its obligations under the Financing
Documents and all its other material obligations of whatever nature, except,
with respect to such other material obligations, where the amount or validity
thereof is subject to a Contest.
SECTION 5.4. EXISTENCE. The Borrower shall do or cause to be done, and
shall cause each of its Subsidiaries to do or cause to be done, all things
necessary to preserve, renew and keep in full force and effect its legal
existence and take all reasonable action to maintain all rights, privileges and
franchises material, necessary or desirable in the normal conduct of its
business except where the failure to maintain such rights, privileges and
franchises, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
SECTION 5.5. COMPLIANCE WITH LAWS. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all Applicable
Laws (including, without limitation, all Environmental Laws and Governmental
Actions) applicable to it or its property, except where the failure to do so,
individually or in the
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aggregate, could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.6. PERFORMANCE AND ENFORCEMENT OF AGREEMENTS. The Borrower
shall, and shall cause each of its Subsidiaries to, observe in all material
respects the covenants and agreements of the Borrower or such Subsidiary, as the
case may be, contained in each Project Document and all of its other material
obligations contained in each other document to which the Borrower or such
Subsidiary is a party. The Borrower shall, and shall cause each of its
Subsidiaries to, enforce in a diligent and commercially reasonable manner all of
its rights under the C&MA and the other Project Documents, unless forbearance is
commercially reasonable.
SECTION 5.7. TAXES AND CLAIMS. (a) The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge all Taxes lawfully imposed on it
or on its income or profits or on any of its property and all other lawful
claims prior to the date on which penalties attach thereto unless such Tax or
claim is subject to a Contest.
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain and keep in full force and effect all clearance rulings, decrees or
similar items necessary to continue the exemption of the Borrower or such
Subsidiary from the impositions of any Tax or similar charge on which the
Borrower or such Subsidiary is relying (other than, with respect to any
Operating Year, Taxes and other charges in an aggregate amount not exceeding 5%
of the Borrower's Consolidated EBITDA for such Operating Year).
SECTION 5.8. NOTICES. The Borrower shall, promptly after a Responsible
Officer of the Borrower has knowledge thereof, give written notice to the
Administrative Agent of:
(a) the occurrence of any Default, Event of Default or Event
of Loss;
(b) any payment default under any Project Document (i) in an
amount in excess of $1,000,000 or (ii) in an amount in excess of
$500,000 if such amount is deemed uncollectible by the Borrower or has
been outstanding for greater than 60 days;
(c) any litigation or similar proceeding affecting the
Borrower, any of its Subsidiaries or the Project (or any portion
thereof) or concerning any Governmental Action relating to the Project
(including any Governmental Action between any PTT and any Governmental
Authority), or which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
87
(d) any proceeding by or before any tax regulatory authority
contesting the tax position of the Borrower or any of its Subsidiaries
if the resolution of such proceeding could result in an increased
liability in excess of $1,000,000;
(e) the occurrence of any ERISA Event that alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability in an aggregate amount in excess of
$1,000,000;
(f) any material event constituting FORCE MAJEURE under any
Principal Project Document which may have an impact on the Project;
(g) the cancellation or revocation of any material
Governmental Action, Right-of-Way or other consents or approvals or the
failure to obtain, maintain or renew and keep in full force and effect
any material Governmental Actions, Right-of-Way or other consents or
approvals;
(h) any Lien (other than Permitted Liens) against any
collateral security or any portion of the Project;
(i) the initiation of any condemnation or expropriation or
similar proceedings against any of the Collateral or the Project or any
portion thereof;
(j) any proposed change or supplement to the configuration of
the Project approved by the Borrower's Board of Directors or of any
event which could lead to a change, supplement or breakage in the
configuration of the Project;
(k) any issuance or proposed issuance of any class of Capital
Stock of the Borrower, or of any sale or proposed sale of any Capital
Stock of the Borrower or any proposed issuance of equity securities by
any Permitted Parent Company;
(l) its intent to enter into any amendment to any Principal
Project Document, together with a draft thereof prior to its execution
as well as an executed counterpart upon execution;
(m) any interruption in the operation of the Project (or any
portion thereof) of which the Borrower generally notifies its
customers;
(n) the material breach by any Landing Party PTT of any of its
obligations under the C&MA; and
(o) any other event, fact or development that has resulted in,
or could reasonably be expected to result in, a Material Adverse
Effect.
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SECTION 5.9. INSURANCE. The Borrower shall, and shall cause each of its
Subsidiaries to, at all times carry and maintain or cause to be carried and
maintained the insurance set forth in Schedule 5.9. All such insurance shall
comply with the other provisions set forth in Schedule 5.9.
SECTION 5.10. FISCAL YEAR. The fiscal year of the Borrower and its
Subsidiaries shall be the twelve-month period ending on December 31 of each
year.
SECTION 5.11. USE OF PROCEEDS. (a) The proceeds of the Term Loans shall
be used, together with the proceeds from the issuance of the Senior Unsecured
Notes, solely (i) for the repayment of the Refinanced Indebtedness on the
Closing Date, (ii) for the redemption of the Existing Preferred Stock on the
Closing Date, (iii) to pay costs and expenses relating to the Refinancing and
(iv) to fund a portion of the funds required to be deposited into the Contractor
Escrow Account and the Construction Account, all in accordance with the schedule
of "sources and uses" delivered to the Administrative Agent pursuant to Section
4.1(l). The proceeds of the Revolving Credit Loans shall be used for Operating
Expenses set forth in the then current Operating Budget (including debt service
on the Loans and the Senior Unsecured Notes) to the extent that (A) revenues are
insufficient to pay such expenses in accordance with the terms of Section
8.10(b), (B) funds in the Operating Reserve Account and the Maintenance Reserve
Account are insufficient to pay such expenses in accordance with the terms of
Article VIII and (C) with respect to the payment of debt service on the Loans
and the Senior Unsecured Notes, funds in the Debt Reserve Account and
Supplemental Debt Reserve Account are insufficient to pay such debt service in
accordance with the terms of Article VIII.
SECTION 5.12. INTEREST RATE PROTECTION. The Borrower shall, within two
months after the Closing Date, enter into one or more Interest Hedging
Agreements to hedge the Borrower's interest rate exposure on 50% of the Term
Loans for a period of at least three years from the Closing Date, all on terms
reasonably satisfactory to the Administrative Agent.
SECTION 5.13. OPERATING BUDGETS. At least 30 days prior to the
commencement of each Operating Year (other than the initial Operating Year), and
after prior review by, and the approval of the aggregate amount of the Operating
Expenses set forth therein by, the Administrative Agent, the Borrower will
adopt, for itself and its Subsidiaries, an Operating Budget for such Operating
Year (and deliver a copy thereof to the Administrative Agent), PROVIDED in no
event shall any Operating Budget provide for capital expenditures in excess of
$500,000 for such Operating Year. The Borrower shall, simultaneously with the
delivery of each Operating Budget (other than the initial Operating Budget),
deliver to the Administrative Agent an update of the Operating Projections.
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SECTION 5.14. GOVERNMENTAL ACTIONS AND RIGHTS-OF-WAY. The Borrower
shall obtain, or cause to be obtained, and maintain, or cause to be maintained,
in full force and effect all material Governmental Actions, Rights-of-Way and
other consents and approvals as are at the time necessary in order for the
Borrower and, if applicable, its Subsidiaries, (a) to operate and maintain the
Project as contemplated by the C&MA, (b) to transfer Capacity on all Segments
and (c) to perform all other Project Activities, except where the failure to
obtain or maintain such Governmental Actions, Rights-of-Way, consents or
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.15. COOPERATION WITH INDEPENDENT ENGINEER. The Borrower shall
keep the Independent Engineer fully informed on a timely basis with respect to
(a) capital expenditures for the Project and (b) prior to the FSA Date, all
material matters relating to the Project, and shall meet (and cause the
Contractors to meet) the Independent Engineer at reasonable times and upon
reasonable notice to discuss any of the foregoing.
SECTION 5.16. REVENUE ACCOUNT. Subject to Sections 8.2(b), 8.2(i) and
8.2(j), the Borrower shall deposit, and shall direct others (including all of
its Subsidiaries) to pay or deposit, all Project Revenues directly into the
Revenue Account as required by Article VIII.
SECTION 5.17. MAINTENANCE OF PROCESS AGENT. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain in New York, New York a Person
acting as agent to receive on its behalf service of process.
SECTION 5.18. SYSTEM OPERATION AND MAINTENANCE. The Borrower shall
cause the Project to be operated and maintained in an efficient and
business-like manner in accordance with the terms of the Project Documents.
SECTION 5.19. EVENT OF LOSS. (a) The Borrower shall immediately notify
the Administrative Agent and the Collateral Trustee in writing of the occurrence
of an Event of Loss and, unless the affected portion of the Project is being
repaired in accordance with Section 5.19(b), the Borrower shall deliver to the
Administrative Agent, within 30 days of the occurrence of such Event of Loss, a
certificate of a Responsible Officer of the Borrower (the "EOL COMPLIANCE
CERTIFICATE") certifying as to the Present Value Coverage Ratios as of the last
day of the immediately preceding calendar quarter (but recalculated to give
effect to such Event of Loss).
(b) If an Event of Loss shall occur and no Event of Default shall have
occurred
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and be continuing and (i) in the Independent Engineer's reasonable opinion it is
technically feasible to restore, rebuild or replace the affected portion of the
Project within six months, (ii) in the Administrative Agent's reasonable opinion
(after consultation with the Consultants) there are or will be sufficient funds
available to the Borrower (from Permitted Sources, proceeds of insurance and/or
other sources permitted by the Majority Lenders) to (x) restore, rebuild or
replace the affected portion of the Project so that the Project will be able to
operate as reliably and efficiently (and with a comparable market value) as the
Project operated (and was valued) prior to such event (and in any event on a
basis sufficient to pay the Senior Unsecured Notes, the Loans and all other
obligations owing to the Lenders) and (y) pay all cash operating and maintenance
costs and all the principal of, and interest on and all fees with respect to,
the Loans and to pay all other Obligations coming due prior to the time such
restoration, rebuilding or replacement is completed and (z) pay all obligations
to any PTT which may be coming due prior to the time such restoration,
rebuilding or replacement is completed (as a result of such Event of Loss or
otherwise), (iii) no party to the Principal Project Documents or any other
Project Document shall have the right to terminate such Principal Project
Document or other Project Document at any time during the period of restoration,
rebuilding or replacement as a result of any such Event of Loss unless, with
respect to any such other Project Document, such termination could not
reasonably be expected to have a Material Adverse Effect, and (iv) in the
Independent Engineer's reasonable opinion, it is reasonably likely that the
Borrower (or other applicable Persons) will have as and when needed all rights
of way and permits necessary to restore, rebuild or replace the affected portion
of the Project, then the Borrower and/or, if applicable, any Landing Party PTT
or such other appropriate Person permitted under the C&MA, at their sole cost
and expense, shall restore, rebuild or replace the affected portion of the
Project.
SECTION 5.20. BOOKS AND RECORDS; INSPECTION RIGHTS. (a) The Borrower
shall, and shall cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower shall, and
shall cause each of its Subsidiaries to, permit any representative of the
Lenders designated by the Administrative Agent, upon reasonable prior notice, to
visit and inspect its properties, to examine and make copies from its books and
records and to discuss its affairs, finances and condition with its officers and
its independent accountants, all at such reasonable times and as often as
reasonably requested. The Borrower agrees that the Administrative Agent, the
Independent Engineer and each other advisor to the Lenders (at the Borrower's
expense), may visit the Borrower's executive offices, the FNOC, any other
portion of the Project (including any Segment-T or any other portion of the
Project, but only to the extent of the Borrower's rights of access thereto under
the C&MA or otherwise), each site where Work is being performed (but only to the
extent of the Borrower's rights of access thereto) and other properties owned by
the Borrower or any of its Subsidiaries at any and all reasonable times during
normal business hours,
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upon reasonable advance notice.
(b) The Administrative Agent, the Independent Engineer and each other
advisor to the Lenders will be given access, to the extent within the possession
or control of the Borrower or any of its Subsidiaries or to the extent the
Borrower or any of its Subsidiaries has rights of access, to (i) all Design
Documents (including, without limitation, data relating to any proposed design
changes in the Project), (ii) quality control data, (iii) invoices relating to
construction progress and to services to be performed and materials to be
supplied on a cost reimbursement basis, and invoices relied on by the
Contractors in verifying construction progress to the extent the Borrower or any
of its Subsidiaries has received the same, (iv) contracts relating to the
engineering of, the procurement of services, equipment, supplies or other
materials for, or the construction of, the Project and (v) all other data
relating to the Project as may be requested by the Administrative Agent or the
Independent Engineer.
SECTION 5.21. FOREIGN CORRUPT PRACTICES ACT. The Borrower shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
the Foreign Corrupt Practices Act of the United States, or any similar law of
any other jurisdiction, if applicable.
SECTION 5.22. INTELLECTUAL PROPERTY COLLATERAL. (a) The Borrower shall
own, or shall have licenses to use, and shall cause each of its Subsidiaries to
own or have license to use, all Intellectual Property necessary for the conduct
of its business as currently conducted by it and proposed to be conducted that
are material to the condition (financial or other), business or operations of
the Borrower and its Subsidiaries, taken as a whole, or the Project.
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
take all reasonably necessary steps to maintain and pursue any application (and
to obtain the relevant registration) filed with respect to, and to maintain any
registration of, any material item of the Intellectual Property owned by the
Borrower or such Subsidiary, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition, interference
proceedings and the payment of appropriate fees, except where the failure to so
maintain, obtain or pursue could not reasonably be expected to have a Material
Adverse Effect.
(c) The Borrower shall, prior to the end of the Warranty Period, enter
into software maintenance agreements and software licensing agreements on terms
reasonably satisfactory to the Administrative Agent and the Independent
Engineer.
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SECTION 5.23. MAINTENANCE OF RESTORATION. The Borrower shall maintain
restoration for the FLAG System in accordance with the Restoration Plan.
SECTION 5.24. PSA 3; FSA DATE. (a) The Borrower shall use its best
efforts to cause PSA 3 to occur on or prior to September 30, 1998. If the FLAG
System shall fail to meet the requirement for achieving PSA 3 (exclusive of any
requirement with respect to Software) on or prior to September 30, 1998, the
Borrower shall immediately deliver to the Administrative Agent a certificate of
a Responsible Officer of the Borrower certifying (x) the reasons why the FLAG
System failed to meet the requirement for achieving PSA 3 (exclusive of any
requirement with respect to Software) and the actions, if any, the Borrower is
pursuing in respect thereof and (y) that, in the Borrower's reasonable opinion,
such failure does not relate to items or failures which have, or could
reasonably be expected to have, an adverse effect on the ability of the FLAG
System to reliably carry traffic.
(b) The Borrower shall use its best efforts to cause the FSA Date to
occur within 150 days after the occurrence of PSA 3. If the FSA Date shall fail
to occur within 150 days after the occurrence of PSA 3, the Borrower shall
immediately deliver to the Administrative Agent a certificate of a Responsible
Officer of the Borrower certifying (i) the reasons why the FSA Date has not
occurred and the actions, if any, the Borrower is pursuing in respect thereof
and (ii) that, in the Borrower's reasonable opinion, the failure to achieve
Final System Acceptance does not relate to items or failures which have, or
could reasonably be expected to have, an adverse effect on the ability of the
FLAG System to reliably carry traffic (or, if the Borrower cannot certify as to
the matters set forth in clause (ii), the Borrower shall have delivered to the
Administrative Agent a detailed plan reasonably satisfactory to the Majority
Lenders (upon consultation with the Independent Engineer) setting forth the
reasons why the FSA Date has not occurred and the actions the Borrower is
pursuing for the purpose of achieving Final System Acceptance or remediating the
items or failures which prevent the occurrence of the FSA Date).
SECTION 5.25. FURTHER ASSURANCES. The Borrower shall cause to be
promptly and duly taken, executed, acknowledged and delivered all such further
acts, documents and assurances as the Administrative Agent or the Collateral
Trustee from time to time may reasonably request in order to carry out more
effectively the intent and purposes of this Agreement and the other Financing
Documents, including with respect to the maintenance of perfection of all
Subject Collateral.
ARTICLE VI
NEGATIVE COVENANTS
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Until all the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees and other obligations payable
hereunder and under the Financing Documents have been paid in full, the Borrower
covenants and agrees with the Administrative Agent, the Collateral Trustee and
the Lenders that:
SECTION 6.1. INDEBTEDNESS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Borrower incurred under the Financing
Documents and in respect of the other Obligations and the guarantee of
such Indebtedness by any Subsidiary of the Borrower;
(b) Indebtedness of the Borrower evidenced by the Senior
Unsecured Notes in an aggregate principal amount not to exceed $430
million less an amount equal to any prepayments made thereon or
redemptions or purchases thereof after the Closing Date and, if any
Subsidiary of the Borrower has guaranteed the Obligations, the
guarantee of such Indebtedness by such Subsidiary;
(c) Indebtedness of the Borrower described in clause (c) of
the definition of "Indebtedness" with respect to amounts payable under
the Construction Contract to the extent that such amounts are set forth
in the Construction Cost Certificate and Dollars have been deposited in
the Contractor Escrow Account;
(d) Capital Lease Obligations of the Borrower permitted by
Section 6.17;
(e) Indebtedness of the Borrower under, or constituting net
exposure under, Interest Hedging Agreements entered into in accordance
with Section 5.12 or otherwise permitted by the Administrative Agent;
(f) Indebtedness of the Borrower under any Permitted Sale
Leaseback;
(g) unsecured Indebtedness of the Borrower owing to any
Shareholder which is payable only after the repayment of the
Obligations, which is expressly subordinated to the Obligations and
which contain terms (including terms with respect to subordination)
that are satisfactory to the Administrative Agent (which terms shall
(i) include that, upon any foreclosure with respect to the Capital
Stock of the Borrower, such Indebtedness shall only be payable from the
excess proceeds of such foreclosure after application of such proceeds
to the Obligations, and (ii) provide for no cash interest payments,
except for cash interest payments to the extent and only to the extent
funds are actually made available to the Borrower in accordance with
clause ninth of Section 8.10(b) and only if no Default, Event of
Default or Designated Event shall have occurred and be continuing); and
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(h) other Indebtedness of the Borrower in an aggregate
principal amount not to exceed $1,000,000 at any one time.
SECTION 6.2. LIENS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien on the
Collateral (or any part thereof), the Project (or any portion thereof) or any of
its, or its Subsidiaries, other assets, other than Permitted Liens.
SECTION 6.3. FUNDAMENTAL CHANGES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
change its form of organization or its business, or liquidate or dissolve,
except that the Borrower may, with the prior written consent of the Majority
Lenders, merge into or consolidate with a Subsidiary of a Permitted Parent
Company.
SECTION 6.4. SALE OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease, convey, assign, transfer or
otherwise dispose of (each, a "TRANSFER") all or any portion of its assets
except (a) Transfers of Capacity (and capacity on other telecommunication
systems acquired in accordance with the terms of this Agreement) in accordance
with Section 6.13, (b) Transfers of assets in the ordinary course of business
not required for the efficient operation of the FLAG System for fair value with
a book value not exceeding $10,000,000 in the aggregate for all fiscal years for
all such Transfers under this clause (b), (c) Transfers by the Borrower in
connection with Permitted Sale Leasebacks, (d) Transfers of obsolete, worn out
or defective equipment and other assets for fair value in cash and/or cash
equivalents, (e) Transfers of title to portions of the FLAG System as required
under the C&MA, (f) any Transfer of assets by a Subsidiary of the Borrower to
the Borrower and (g) Transfers of title to any Landing Party PTT with respect to
any portion of the Project within the territorial limits of the jurisdiction of
such Landing Party PTT for the purpose of minimizing taxes payable by the
Borrower or to comply with the laws of the jurisdiction of such Landing Party
PTT, but only to the extent permitted by the terms of the C&MA and only if the
Borrower and the other PTTs are granted an irrevocable right of use (at no
charge) with respect to the portion of the Project so transferred; PROVIDED that
(A) the Net Cash Proceeds of a Transfer under clauses (b), (c), (d), (e) and (g)
shall be deposited in the Sales and Issuances Proceeds Account and shall be
applied to the prepayment of the Loans if required in accordance with Section
2.9 and (B) other proceeds received in respect of Transfers permitted under this
Section (including under clause (a)) shall be, subject to Sections 8.2(b),
8.2(i) and 8.2(j), deposited into the Revenue Account for application in
accordance with Article VIII.
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SECTION 6.5. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Borrower shall not, and shall not permit any of its Subsidiaries to, (a)
purchase, hold or acquire any Capital Stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, or become a general or limited partner in any partnership or a joint
venturer in any joint venture or enter into any profit sharing or royalty
agreement or similar arrangement whereby the income or profits of the Borrower
or any of its Subsidiaries are, or might be, shared with any Person, except (i)
Permitted Investments, (ii) the Borrower may own Capital Stock of wholly-owned
Subsidiaries created in accordance with Section 6.26, (iii) the Borrower may
make equity contributions in any such Subsidiary only out of funds made
available to the Borrower in accordance with clause "ninth" of Section 8.10(b)
or funds available in the Excess Cash Flow Account, (iv) Guarantees permitted by
Section 6.1 and Guarantees by the Borrower of obligations of its Subsidiaries to
the extent such obligations constitute Operating Expenses set forth in the then
current Operating Budget, (v) the Borrower may enter into reasonable joint
marketing agreements or arrangements and (vi) the Borrower may, through any of
its Subsidiaries, become a joint venturer in a joint venture so long as (x) such
Subsidiary shall not enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of such Subsidiary to pay dividends or otherwise make distributions on its
Capital Stock and (y) parties to the transaction with such Subsidiary shall have
no recourse against the Borrower in respect of such transaction, or (b) enter
into any management contract (other than the Program Management Agreement and
the Marketing Services Agreement and other than any agreement between the
Borrower and a Subsidiary thereof approved by the Administrative Agent) or
similar arrangement whereby its business or operations are managed by any other
Person.
SECTION 6.6. RESTRICTED PAYMENTS; PAYMENTS WITH RESPECT TO SENIOR
UNSECURED NOTES. (a) The Borrower shall not declare or make any Restricted
Payment except for (i) distributions by the Borrower in respect of its Capital
Stock which are payable solely in additional Capital Stock of the Borrower, but
only to the extent such additional Capital Stock is common stock and, if such
Capital Stock in respect of which such distribution is made is subject to a Lien
in favor of the Collateral Trustee, is subject to a first priority perfected
Lien in favor of the Collateral Trustee pursuant to a Pledge Agreement or such
other documentation as shall be reasonably acceptable to the Administrative
Agent and which is delivered to the Collateral Trustee, together with undated
stock powers for each stock certificate representing such additional Capital
Stock, executed in blank, (ii) so long as no Default or Event of Default shall
have occurred and be continuing or would result therefrom, distributions by the
Borrower in
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respect of its Capital Stock from funds available to the Borrower in accordance
with clause ninth of Section 8.10(b) or with funds available in the Excess Cash
Flow Account and (iii) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may purchase
or redeem shares of Capital Stock (or options or warrants in respect of such
shares) of the Borrower held by present or former officers or employees of the
Borrower or any of its Subsidiaries upon such person's death, disability,
retirement or termination of employment or under any agreement under which such
shares of Capital Stock or related rights were issued, provided that the
aggregate amount of such purchases or redemptions shall not exceed $5,000,000 in
the aggregate.
(b) The Borrower shall not, except with funds available in the Excess
Cash Flow Account, make any payment (other than payments of interest thereon) or
prepayment on, or any redemption or purchase or otherwise provide for the
defeasance of, the Senior Unsecured Notes (or any portion thereof) or any
Guarantees in respect thereof.
SECTION 6.7. LIMITATIONS ON ISSUANCE OF INTERESTS. (a) The Borrower
shall not issue any additional Capital Stock of the Borrower or any other
interest in the Borrower, to any Person, except for (i) additional Capital Stock
which is common stock and which is subject to the perfected Lien of the
Collateral Trustee pursuant to a Pledge Agreement or such other documentation as
shall be reasonably acceptable to the Administrative Agent and which is
delivered to the Collateral Trustee, together with undated stock powers for each
stock certificate representing such additional Capital Stock, executed in blank
and (ii) additional Capital Stock which is common stock (or options or warrants
to purchase the same) issued by the Borrower under the Stock Option Plan to
persons who are, at the time of such issuance, officers or employees of the
Borrower and/or its Subsidiaries; PROVIDED that the Borrower shall not permit
the Capital Stock (and the warrants and options to purchase the same) issued
pursuant to this clause (ii) to represent more than 3.8% of all common stock of
the Borrower on a fully diluted basis.
(b) The Borrower shall not permit any of its Subsidiaries to issue any
additional Capital Stock or any other interest in any such Subsidiary to any
Person, except to the Borrower and only if such additional Capital Stock is (i)
subject to the perfected Lien of the Collateral Trustee pursuant to a Pledge
Agreement or such other documentation as shall be reasonably acceptable to the
Administrative Agent and (ii) delivered to the Collateral Trustee, together with
undated stock powers for each stock certificate representing such additional
Capital Stock, executed in blank.
SECTION 6.8. LIMITATIONS ON TRANSFER OF INTERESTS. The Borrower shall
not consent to the transfer (by assignment, sale or otherwise) of any Capital
Stock or any other equity interest of the Borrower, or permit the transfer (by
assignment, sale or otherwise) of any Capital Stock or any other equity interest
of any of its Subsidiaries,
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except for (a) subject to the provisions of paragraph (n) of Article VII, a
transfer by the Shareholders of all the Capital Stock of the Borrower (other
than 2.2% of the Class A common Capital Stock which is owned by Gulf) to a newly
created corporation in exchange for Capital Stock of such newly created
corporation, all in connection with a public offering of equity or debt
securities by such newly created corporation; PROVIDED that (i) the Borrower
shall not assume or otherwise be obligated in respect of any obligations
associated with such a transaction, (ii) the terms of such a transaction shall
be reasonably acceptable to the Administrative Agent and (iii) after giving
effect to such transaction, the Collateral Trustee shall have a perfected first
priority security interest in all Capital Stock of the Borrower (other than the
Capital Stock held by Gulf and other than the Capital Stock issued under the
Stock Option Plan) and (b) subject to the provisions of paragraph (n) of Article
VII, any transfer of the Borrower's Capital Stock made subject to the Lien and
the terms of the Pledge Agreement pursuant to which such Capital Stock is
pledged (including, without limitation, the delivery by the transferee to the
Collateral Trustee of an Irrevocable Proxy and Power as contemplated by such
Pledge Agreement), (c) any Capital Stock issued under the Stock Option Plan
(unless any such Capital Stock is required to be pledged to the Collateral
Trustee in accordance with the terms of this Agreement or the other Financing
Documents) and (d) Capital Stock held by Gulf.
SECTION 6.9. PAYMENT OF CONSTRUCTION COSTS; CONSTRUCTION COST
CERTIFICATE; OPERATING BUDGET. (a) The Borrower shall not, and shall not permit
any of its Subsidiaries to, pay any amount (other than with respect to amounts
received from Permitted Sources) in respect of the construction and installation
of the FLAG System in the Original Configuration other than those costs set
forth in the initial Operating Budget or in the Construction Cost Certificate.
Without the prior written consent of the Majority Lenders, the Borrower shall
not modify the Construction Cost Certificate to increase the aggregate amounts
payable thereunder, PROVIDED that the Borrower may apply identifiable cost
savings (as confirmed by the Administrative Agent) for items set forth therein
to cost overruns for items set forth therein, without increasing the aggregate
amounts payable thereunder.
(b) The Borrower shall not, without the prior written consent of the
Majority Lenders, amend or otherwise modify the Operating Budget for any
Operating Year, PROVIDED, HOWEVER, the Borrower may (i) with the prior written
consent of the Administrative Agent, amend the budgeted amount of the Operating
Expenses set forth in such Operating Budget so long as, after giving effect to
such amendment, the aggregate Operating Expenses set forth therein do not exceed
110% of the Operating Expenses set forth in the Operating Budget delivered in
accordance with Section 4.1(ac) or 5.13 in respect of such Operating Year and
(ii) amend such Operating Budget in order to apply identified cost savings in a
budget category to cost overruns in another budget category (other than the
capital expenditure budget category) or to a new budget category without
increasing the aggregate amounts payable under the
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Operating Budget.
SECTION 6.10. AMENDMENT OF PROJECT DOCUMENTS, SENIOR UNSECURED NOTE
DOCUMENTS. (a) Without the prior written consent of the Majority Lenders, the
Borrower shall not, and shall not permit any of its Subsidiaries to, agree or
consent to or otherwise permit any amendment, supplement or other modification
or waiver with respect to, or any consent under, any Project Document to which
the Borrower or such Subsidiary is a party or with respect to which the consent
of the Borrower or such Subsidiary is required, other than:
(i) amendments, supplements or other modifications or waivers
with respect to, or consents under, any Capacity Sales Agreement in a
manner not inconsistent with the provisions of Section 6.13;
(ii) amendments, supplements or other modifications or waivers
with respect to, or consents under, the C&MA which constitute Permitted
C&MA Amendments;
(iii) amendments, supplements or other modifications or
waivers with respect to, or consents under, the Construction Contract
which (A) are entered into by the Borrower in the ordinary course of
business (including amendments to effectuate an alteration of the
configuration of the FLAG System in accordance with Section 6.16) and
are on commercially reasonable terms, (B) provide for no additional
amounts to be paid by the Borrower thereunder (or, if additional
amounts are required to be paid by the Borrower thereunder, such
additional amounts are provided for in the then current Operating
Budget or are provided for from Permitted Sources), (C) do not
otherwise increase the Borrower's liability thereunder, (D) do not
release any Contractor from any liability thereunder, (E) do not reduce
the duration or scope of any warranty or replacement period thereunder,
(F) do not reduce the scope or availability of any Intellectual
Property thereunder or which is to be conveyed to the Borrower
thereunder, (G) do not amend the requirements for PSA 3 or Final System
Acceptance without the prior written consent of the Independent
Engineer, and (H) could not reasonably be expected to have a Material
Adverse Effect and could not reasonably be expected to have an adverse
effect (other than a temporary or minor adverse effect) on the
continued use, operation or maintenance of the Project;
(iv) amendments, supplements or other modifications or waivers
with respect to, or consents under, any Project Document (other than
any Principal Project Document referred to clause (i), (ii) or (iii)
above and other than the Construction Contract Guarantees, the
Performance Bond and the Contractor Escrow Agreement) (A) which are
permitted by such Project Document without
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the consent of the Borrower or any Subsidiary of the Borrower party
thereto or (B) which (1) are entered into by the Borrower or any
Subsidiary of the Borrower in the ordinary course of business and are
on commercially reasonable terms, (2) provide for no additional amounts
to be paid by the Borrower or any Subsidiary of the Borrower thereunder
(or, if additional amounts are required to be paid by the Borrower or
any Subsidiary of the Borrower thereunder, such additional amounts are
provided for in the then current Operating Budget or are provided for
from Permitted Sources), (3) do not release any party thereto (other
than the Borrower or any Subsidiary of the Borrower) from any material
liability thereunder unless such release would be commercially
reasonable or unless the Borrower would otherwise be permitted to
terminate such agreement pursuant to Section 6.11 and (4) could not
reasonably be expected to have a Material Adverse Effect and could not
reasonably be expected to have an adverse effect (other than a
temporary or minor adverse effect) on the continued use, operation or
maintenance of the Project; and
(v) (A) immaterial amendments, supplements or other
modifications or immaterial waivers with respect to, or immaterial
consents under, any Principal Project Document and (B) amendments,
supplements or other modifications to, or consents or waivers under,
any Principal Project Document which are permitted by such Principal
Project Document without the consent of the Borrower.
(b) Without the prior written consent of the Majority Lenders, the
Borrower shall not agree or consent to or otherwise permit any amendment,
supplement or other modification or waiver with respect to, or any consent
under, any Senior Unsecured Note Document in any manner adverse to the Lenders
(including, without limitation, increasing the principal amount outstanding
thereunder, increasing the interest rate or any of the fees payable with respect
thereto, and changing the payment dates in respect of the payment of interest or
principal thereunder).
SECTION 6.11. TERMINATION, ASSIGNMENT OF PROJECT DOCUMENTS. (a) The
Borrower shall not terminate, cancel or suspend, or permit the termination,
cancellation or suspension of, any Project Document other than (i) in accordance
with its terms, (ii) as permitted by such Project Document without the consent
of the Borrower or any Subsidiary of the Borrower, (iii) as required by
applicable law or (iv) a Project Document, other than the C&MA, the Construction
Contract (prior to the end of the Warranty Period) and the Construction Contract
Guarantees (prior to the end of the Warranty Period), if (A) the Borrower
delivers to the Administrative Agent at the time of such termination,
cancellation or suspension a certificate of a Responsible Officer of the
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Borrower certifying that (1) such termination, cancellation or suspension is
permitted by the terms of such Project Document, (2) the Borrower reasonably
believes that such Project Document (or its replacement) is no longer beneficial
or useful to the Lenders and to the Borrower's business and (3) such
termination, cancellation or suspension could not reasonably be expected to have
a Material Adverse Effect, (B) with respect to the termination, cancellation or
suspension of the Marketing Services Agreement or any Software Agreement, such
agreement is simultaneously replaced with a new contract (or other arrangement)
on terms and with a party (which party may be the Borrower itself) reasonably
satisfactory to the Majority Lenders and (C) with respect to the termination,
cancellation or suspension of the Performance Bond or any Maintenance Zone
Agreement, such agreement is simultaneously replaced with a new contract (or
other arrangement) on terms and with a party reasonably satisfactory to the
Administrative Agent.
(b) The Borrower shall not agree or consent to or otherwise permit the
assignment of the obligations of any party to any Principal Project Document,
except pursuant to the Security Documents and except as permitted without the
consent of the Borrower by the terms of such Principal Project Document.
SECTION 6.12. APPROVAL OF ADDITIONAL CONTRACTS. Without the prior
written consent of the Majority Lenders, the Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any Additional Contract, other
than (a) Capacity Sales Agreements entered into by the Borrower in accordance
with Section 6.13, (b) contracts entered into by the Borrower in the ordinary
course of business of performing Project Activities to the extent that (i) they
are entered into on commercially reasonable terms, (ii) amounts payable
thereunder are provided for in the then current Operating Budget or from
Permitted Sources, and (iii) the execution, delivery and performance thereof
could not reasonably be expected to have a Material Adverse Effect and could not
reasonably be expected to have an adverse effect (other than a temporary or
minor adverse effect) on the continued use, operation or maintenance of the
Project, (c) contracts entered into by the Borrower in order to effectuate the
provisions of Section 6.16, PROVIDED such contracts are consistent with the
terms of Section 6.16 and (d) any replacement Maintenance Zone Agreement entered
into with the consent of the Administrative Agent in accordance with Section
6.11(a). At the time any Additional Contract is entered into (other than
Capacity Sales Agreements) the Borrower will deliver a copy thereof to the
Administrative Agent. If the prior written consent of the Majority Lenders is
required for any Additional Contract, upon such consent and at the request of
the Administrative Agent, the Borrower shall use its best efforts to obtain and
deliver to the Administrative Agent a consent to assignment with respect to such
Additional Contract, in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION 6.13. SALES OF CAPACITY. The Borrower shall not, and shall not
permit
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any of its Subsidiaries to, sell, lease or otherwise dispose of Capacity or
capacity on other telecommunication systems acquired in accordance with the
terms of this Agreement except pursuant to agreements entered into by the
Borrower on commercially reasonable terms; PROVIDED that, in any event, (i) the
relevant agreement shall provide that all cash consideration payable thereunder
shall be paid in Dollars to the Revenue Account (except as provided in Section
8.2(j)), (ii) if the relevant agreement shall provide for future payments it
shall not prohibit the granting of a security interest in such agreement by the
Borrower to the Collateral Trustee, for the benefit of the Secured Parties,
(iii) the Borrower shall deliver a copy of the relevant agreement to the
Administrative Agent and (iv) the relevant agreement shall not provide for any
cash rebate or otherwise provide for the return of any cash previously paid to
the Borrower (or, if such agreement does provide for any such rebate or return,
a portion of the Capacity Payments or other payments received in respect of such
agreement in an amount equal to such contingent rebate or return, shall be
deposited into the Rebate Account); PROVIDED, FURTHER, the Borrower shall not
(A) enter into any transaction to dispose of Capacity for non-cash consideration
if, after giving effect to such transaction, the Capacity disposed of for
non-cash consideration during the 12-month period ending on (and including) the
date of such transaction (exclusive of up to $20,000,000 of Capacity disposed of
for non-cash consideration in connection with the addition of Aqaba, Jordan as
contemplated by Section 6.16(b)) would exceed 10% of the Capacity disposed of
during the same period (exclusive of up to $20,000,000 of Capacity disposed of
for non-cash consideration in connection with the addition of Aqaba, Jordan as
contemplated by Section 6.16(b)) or (B) dispose of any Capacity for non-cash
consideration at any time a Default or Designated Event shall have occurred and
be continuing (in each case, except for transfers of Capacity for non-cash
consideration in connection with customary mutual restoration agreements).
SECTION 6.14. ACCEPTANCE OF SYSTEM. The Borrower shall not, without the
prior written consent of the Independent Engineer (such consent not to be
unreasonably withheld), issue the Certificate of Final System Acceptance or
agree with the Contractors that PSA 3 shall have occurred.
SECTION 6.15. CONSTRUCTION AND MAINTENANCE AGREEMENT. The Borrower
shall not, and shall not permit any of its Subsidiaries to, (a) make any
payments pursuant to Paragraph 11.4 of the C&MA not provided for in the then
current Operating Budget, (b) permit any additional capital costs to be incurred
in accordance with Paragraph 9.1 of the C&MA not provided for in the then
current Operating Budget or from Permitted Sources, (c) include under the
Construction Contract (or otherwise become obligated to pay for) equipment and
services which are associated with the Project but which are not included in the
Submarine System or Segments X-1 and X-2 as contemplated by Paragraph 7.3 of the
C&MA unless such obligation is provided for in the then current Operating Budget
or unless the Borrower shall have received Dollars from a PTT or shall have
Permitted Sources in an amount equal to the obligation to be incurred or (d)
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vote its interest on the Management Committee except in the best interests of
the Borrower and so long as any such decision could not reasonably be expected
to have a Material Adverse Effect.
SECTION 6.16. CHANGES TO CONFIGURATION. (a) Except as provided in
paragraph (b) below, the Borrower shall not, without the prior written consent
of the Majority Lenders, add any additional Landing Country or add any
additional Landing Party PTT or select, or agree to the selection of, any
alternative Landing Country or Landing Party PTT or otherwise alter in any way
the Original Configuration of the FLAG System, except in the case of adding an
additional Landing Country or an additional Landing Party PTT if (i) no Default
or Event of Default shall have occurred and be continuing, (ii) all costs
related to such addition are funded with Permitted Sources, (iii) no material
liabilities of or costs to the Borrower or any of its Subsidiaries shall be
created which are not provided for from sources described in clause (ii) above,
(iv) such addition could not reasonably be expected to have an adverse effect
(other than a temporary or minor adverse effect) on the continued use, operation
or maintenance of the Project, (v) such addition is added via a Branching Unit
or as an extension to the Original Configuration and (vi) such addition could
not reasonably be expected to have a Material Adverse Effect.
(b) The Borrower shall not add Saudi Arabia or Jordan as Landing
Countries unless (i) all costs related to such addition are funded with
Permitted Sources or are paid for with Capacity disposed of in accordance with
Section 6.13, (ii) no material liabilities of or costs to the Borrower or any of
its Subsidiaries shall be created which are not provided for from sources
described in clause (i) above and (iii) in connection with (A) the landing in
Jeddah, Saudi Arabia, the Landing Party PTT is the Ministry of Posts, Telegraph
and Telecommunications and (B) the landing in Aqaba, Jordan, the Landing Party
PTT is Jordan Telecommunications PLC.
SECTION 6.17. LEASES. The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any lease except for (a) leases of personal
property in the ordinary course of business (to the extent the obligations
thereunder are provided for in the then current Operating Budget), (b) leases of
real property in the ordinary course of business (to the extent the obligations
thereunder are provided for in the then current Operating Budget), (c) Capital
Lease Obligations for the lease of office equipment and automobiles in the
ordinary course of business of the Borrower and (d) Permitted Sale Leasebacks by
the Borrower.
SECTION 6.18. CHANGE OF OFFICE. The Borrower shall not, and shall not
permit any of its Subsidiaries to, change the location of its chief executive
office or principal
103
place of business or the office where it keeps its records concerning the
Project and all contracts related thereto from that existing on the date of this
Agreement, unless the Borrower or such Subsidiary, as applicable, shall have
given the Administrative Agent at least 30 days' prior written notice thereof
and all action necessary or advisable in the Administrative Agent's reasonable
opinion to protect and perfect the Liens and security interests in the
Collateral shall have been taken.
SECTION 6.19. CHANGE OF NAME. The Borrower shall not, and shall not
permit any of its Subsidiaries to, change its name unless the Borrower or such
Subsidiary, as applicable, shall have given the Administrative Agent at least 30
days' prior written notice thereof and all action necessary or advisable in the
Administrative Agent's reasonable opinion to protect and perfect the Liens and
security interests in the Collateral shall have been taken.
SECTION 6.20. TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any agreement with any
Affiliate of the Borrower except (a) pursuant to any Contractual Obligation of
the Borrower in existence on the Closing Date and set forth on Schedule 3.19(b)
and (b) transactions in the ordinary course of business which are on fair and
reasonable terms not less favorable than the Borrower or such Subsidiary could
obtain in an arm's-length transaction with a Person which is not an Affiliate.
SECTION 6.21. SALE AND LEASEBACK. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any arrangement with any Person
providing for the leasing of real or personal property which has been or is to
be sold by it to such Person, other than Permitted Sale Leasebacks by the
Borrower.
SECTION 6.22. CAPITAL EXPENDITURES; OTHER PURCHASES OF ASSETS. (a)
Except as permitted under Section 6.16 or as set forth in the Construction Cost
Certificate, the Borrower shall not, and shall not permit any of its
Subsidiaries to, make any expenditure (including, without limitation, the
transfer of Capacity for non-cash consideration) in respect of the purchase of
capital assets in any Operating Year, except for such expenditures which could
not reasonably be expected to adversely affect the Project and (i) which do not
cause the Borrower and its Subsidiaries to spend more than $500,000 in the
aggregate in any Operating Year in respect of such expenditures or, to the
extent such expenditure would cause the Borrower and its Subsidiaries to spend
more than $500,000 in the aggregate in any Operating Year, which excess is
funded solely from Permitted Sources, (ii) are paid for with Capacity to the
extent the transfer of such Capacity is in accordance with Section 6.13 or (iii)
are approved by the Majority Lenders in writing (after consultation with the
Independent Engineer).
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, purchase or acquire any assets or other property other than (i)
any purchase of assets
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by the Borrower in connection with the completion of the Project, (ii) the
purchase of assets reasonably required in connection with the performance of
Project Activities and (iii) Permitted Investments.
SECTION 6.23. UNRELATED ACTIVITIES; ABANDONMENT. (a) The Borrower shall
not, and shall not permit any of its Subsidiaries to, engage in any business
other than Project Activities.
(b) The Borrower shall not abandon the diligent operation and
maintenance of the Project.
SECTION 6.24. SET-OFF. Without the prior written consent of the
Administrative Agent, the Borrower shall not exercise any right of set-off with
respect to amounts owing to it by the Contractors under the Construction
Contract or amounts owing under the Performance Bond.
SECTION 6.25. Intentionally Omitted.
SECTION 6.26. SUBSIDIARIES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create or otherwise acquire any Subsidiary
unless the Borrower gives the Administrative Agent notice thereof and unless:
(i) such Subsidiary is a newly created, wholly-owned direct
Subsidiary of the Borrower;
(ii) such Subsidiary shall, if the Administrative Agent shall
so request, execute and deliver (A) a guaranty with respect to all
Obligations in form and substance reasonably satisfactory to the
Administrative Agent and/or (B) a security agreement in substantially
the form of the Borrower Security Agreement, with such modifications as
the Collateral Trustee or the Administrative Agent may reasonably
request or consent to;
(iii) the Borrower shall pledge to the Collateral Trustee, for
the benefit of the Secured Parties, all of the outstanding shares of
Capital Stock or other ownership interests of such Subsidiary pursuant
to documentation reasonably satisfactory to the Administrative Agent;
(iv) the Administrative Agent shall have received evidence
reasonably satisfactory to it that the Collateral Trustee shall have,
if required by the Administrative Agent, a perfected first priority
security interest in the collateral set forth in any such security
agreement and/or pledge agreement;
(v) the creation of such Subsidiary and the performance of its
applicable obligations will not create any material risk that the
aggregate tax liability of the
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Borrower and its Subsidiaries for any Operating Year will exceed 5% of
the Borrower's Consolidated EBITDA for such Operating Year; and
(vi) if the Administrative Agent requests, the Administrative
Agent shall have received legal opinions in form and substance
reasonably satisfactory to the Administrative Agent with respect to
paragraphs (ii) through (iv) of the foregoing.
SECTION 6.27. CONCENTRATION OF CASH. The Borrower shall not permit the
aggregate balance in all bank accounts, checking accounts or similar accounts
maintained by the Borrower and any of its Subsidiaries (including the value of
all Permitted Investments contained therein) to exceed an amount equal to
$3,000,000 (exclusive of all amounts and the value of Permitted Investments
maintained in the Accounts and exclusive of any amounts distributed pursuant to
Article VIII to the Borrower or its Subsidiaries for the benefit of other
Persons) except that the Borrower may establish and maintain an account (the
"EXCESS CASH FLOW ACCOUNT") into which funds may be deposited in accordance with
Section 8.22(c). Amounts on deposit in any account (other than the Accounts and
other than the Excess Cash Flow Account) shall be used solely to pay costs in
accordance with the then current Operating Budget.
SECTION 6.28. AMENDMENTS, ETC. OF ORGANIZATIONAL AND OTHER DOCUMENTS.
The Borrower shall not, and shall not permit any of its Subsidiaries to, amend,
supplement or otherwise modify, or permit the amendment, modification or
supplementation of its Bye-Laws or Memorandum of Association in a manner which
is inconsistent with or violates the terms of or could reasonably be expected to
prevent compliance with any of the terms of any Financing Document or Project
Document or could materially adversely affect the Lenders or any Collateral.
SECTION 6.29. IMMUNITY. The Borrower shall not, and shall not permit
any of its Subsidiaries to, in any proceeding in Bermuda, the United States or
elsewhere, in connection with any Financing Document, claim for itself, any of
its assets or the FLAG System, immunity from suit, execution, attachment or
other legal process.
SECTION 6.30. RESTRICTIVE AGREEMENTS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of the Borrower or such Subsidiary to create, incur
or permit to exist any Lien upon any of its property or assets to secure the
Obligations, PROVIDED that the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement.
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SECTION 6.31. MINIMUM CUMULATIVE NET REVENUE. The Borrower shall not
permit the Cumulative Net Revenue for the period from December 31, 1997 through
and including the last day of the calendar month preceding each Principal
Payment Date set forth below, to be less than the amount set forth below
opposite such Principal Payment Date:
Principal Payment Date Minimum Cumulative Net Revenue
---------------------- ------------------------------
April 30, 1998 $37,500,000
July 30, 1998 61,500,000
October 30, 1998 75,900,000
January 30, 1999 114,100,000
April 30, 1999 139,700,000
July 30, 1999 154,600,000
October 30, 1999 160,100,000
January 30, 2000 198,600,000
April 30, 2000 228,800,000
July 30, 2000 244,900,000
October 30, 2000 253,300,000
January 30, 2001 299,100,000
April 30, 2001 331,500,000
July 30, 2001 349,600,000
October 30, 2001 360,000,000
January 30, 2002 413,500,000
April 30, 2002 455,900,000
July 30, 2002 484,300,000
October 30, 2002 504,600,000
January 30, 2003 575,800,000
April 30, 2003 629,900,000
July 30, 2003 664,300,000
October 30, 2003 690,700,000
January 30, 2004 778,000,000
April 30, 2004 848,400,000
July 30, 2004 897,100,000
October 30, 2004 944,700,000
January 30, 2005 1,058,400,000
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with this Section at any time shall not constitute an Event of
Default, but shall result in (a) a limitation on the availability of the
Revolving Credit Commitments pursuant to Section 2.6(e) and (b) until such time
as the Borrower shall have delivered a certificate to the Administrative Agent
in accordance with Section 5.2(b) demonstrating the Borrower's compliance with
this Section and Section 6.32, Excess
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Cash Flow being applied 100% to the Administrative Agent for the account of the
Lenders in accordance with Section 8.10(b).
SECTION 6.32. MINIMUM PRESENT VALUE COVERAGE RATIO. The Borrower shall
not permit, as of the end of any calendar quarter, either Present Value Coverage
Ratio to be less than 1.75 to 1.00. Notwithstanding anything to the contrary
contained in this Agreement, the failure to comply with this Section at any time
shall not constitute an Event of Default, but shall result in (a) a limitation
on the availability of the Revolving Credit Commitments pursuant to Section
2.6(e) and (b) until such time as the Borrower shall have delivered a
certificate to the Administrative Agent in accordance with Section 5.2(b)
demonstrating the Borrower's compliance with this Section and Section 6.31,
Excess Cash Flow being applied 100% to the Administrative Agent for the account
of the Lenders in accordance with Section 8.10(b).
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing (whether
any such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or an order, rule or regulation of any administrative or
governmental body):
(a) the Borrower shall fail to pay any principal of any Loan
when due; or the Borrower or any Subsidiary of the Borrower shall fail
to pay any interest on any Loan or fee or other amount payable
hereunder or under any other Financing Document within 5 days after any
such other amount becomes due in accordance with the terms hereof or
thereof; or
(b) the Borrower shall fail to perform or observe any of its
covenants set forth in Article VI hereof (other than Sections 6.31 and
6.32); or the Borrower shall fail to perform or observe any of its
covenants set forth in subsections 4.1(a), 4.1(f), 4.1(h), 5.2 and
5.3(a) of the Borrower Security Agreement; or any Shareholder shall
fail to perform or observe any of its covenants set forth in the second
sentence of Section 4.1, Section 4.2, the first sentence of Section
4.3(a), Section 4.3(b), the second sentence of Section 4.4 or Section
4.5, 4.7 or 4.8 of the Pledge Agreement to which it is a party; or the
Borrower shall fail to maintain in effect any of the insurance required
to be maintained in accordance with Section 5.9; or
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(c) the Borrower, any Subsidiary of the Borrower or any
Shareholder shall fail to perform or observe any of its covenants set
forth in this Agreement or in any other Financing Document to which it
is a party (other than those referred to in paragraphs (a) and (b)
above and those set forth in Sections 6.31 and 6.32) and such failure
shall continue unremedied or unwaived for a period of 30 days after
receiving written notice thereof; or
(d) any representation or warranty made or deemed made by the
Borrower, any Subsidiary of the Borrower or any Shareholder in this
Agreement or in any other Financing Document or in any certificate,
financial statement or other document delivered by such Person pursuant
hereto or thereto, shall prove to have been false or misleading in any
material respect when such representation or warranty was made or
deemed made; or
(e) (i) Any Specified Participant shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or any Specified
Participant shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any Specified
Participant any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against any Specified Participant any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv)
any Specified Participant shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) any
Specified Participant shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; PROVIDED, HOWEVER, the commencement of any proceeding or other
action or event of a nature referred to in clauses (i) through (v)
above with respect to any Shareholder (other than the Xxxx Atlantic
Shareholder and Marubeni Telecom) shall not constitute an Event of
Default under this paragraph unless such proceeding, other action or
event could reasonably be expected to have a
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Material Adverse Effect; or
(f) one or more judgments or decrees shall be entered (i)
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate a liability (not fully covered by insurance) of $5,000,000 or
more (or the equivalent thereof in other currencies), and all such
judgments or decrees shall not have been paid, vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof
or (ii) in the form of an injunction or similar form of relief
requiring suspension or abandonment of the operation of the Project and
the failure of the Borrower to have such injunction or similar form of
relief stayed or discharged within 60 days; or
(g) (i) any Financing Document shall cease, for any reason, to
be in full force and effect or the Borrower or any Shareholder (other
than Gulf) or other party thereto (other than a Lender) shall so assert
in writing or (ii) the Lien created by any Security Document shall
cease to be enforceable and of the same effect and priority purported
to be created thereby or (iii) any of the Capital Stock of the
Borrower, other than any Capital Stock held by Gulf on the Closing Date
and other than Capital Stock issued under the Stock Option Plan, shall
not be subject to a Pledge Agreement in favor of the Collateral
Trustee; or
(h) prior to the end of the Warranty Period, either
Construction Contract Guarantee shall cease, for any reason, to be in
full force and effect, or AT&T or KDD, as the case may be, shall so
assert in writing; or
(i) at any time prior to the last day of the Warranty Period
(or such shorter period not ending before February 6, 2001 as the
Borrower may agree with the Contractors), the invalidity, termination,
dishonor or revocation of the Performance Bond (except termination as a
result of a final drawing thereunder); or the failure at any time of
the Performance Bond to be in a stated amount equal to (i) at any time
prior to the FSA Date (or such shorter period not ending before
February 6, 2001 as the Borrower may agree with the Contractors), at
least 10% of then Total Contract Price, or (ii) at any time on or after
the FSA Date until the last day of the Warranty Period (or such shorter
period not ending before February 6, 2001 as the Borrower may agree
with the Contractors), at least 5% of the Total Contract Price; or
(j) any Project Document shall, prior to its stated
termination date, at any time and for any reason cease to be valid and
binding and in full force and effect, or any material provision of any
Project Document shall be declared to be null
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and void or unenforceable by a court or arbitrator, or the validity or
enforceability of any provision of any Project Document is contested
through appropriate proceedings by any party thereto or by any
Governmental Authority seeking to establish the invalidity or
unenforceability thereof which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; PROVIDED that
such occurrence shall not constitute an Event of Default under this
paragraph if it relates to (i) a Capacity Sales Agreement or (ii) any
other Principal Project Document (other than the C&MA and, prior to the
end of the Warranty Period, the Construction Contract and the
Construction Contract Guarantees) if the Borrower shall obtain a
replacement agreement or arrangement reasonably satisfactory in form
and substance to the Majority Lenders (or, with respect to the
Performance Bond and any Maintenance Zone Agreement, to the
Administrative Agent) with a Person satisfactory to the Majority
Lenders (or, with respect to the Performance Bond and any Maintenance
Zone Agreement, to the Administrative Agent) within 120 days after such
invalidity, contest, denial or declaration shall have occurred or (iii)
any Project Document other than a Principal Project Document if such
event could not reasonably be expected to have a Material Adverse
Effect; or
(k) any party to any Project Document shall be in material
default thereunder and such default shall continue unremedied for 30
consecutive days; PROVIDED that such occurrence shall not constitute an
Event of Default under this paragraph if it relates to (i) a Capacity
Sales Agreement, (ii) the Construction Contract, if the Construction
Contract Guarantees remain in full force and effect and the
Construction Contract Guarantors are actually performing their
obligations thereunder in a timely fashion, (iii) the C&MA, if the
defaulting party can be replaced and is replaced within 120 days with a
Person satisfactory to the Majority Lenders, or if it is not feasible
to replace such party, if the default by such party could not
reasonably be expected to have a Material Adverse Effect, (iv) any
Maintenance Zone Agreement so long as such default could not reasonably
be expected to have an adverse effect on the Borrower's ability to
maintain the FLAG System or perform its obligations under the Financing
Documents and the Principal Project Documents or (v) any other
Principal Project Document (other than those referred to in clauses (i)
through (iv) above and other than the Construction Contract Guarantees)
if the Borrower shall obtain a replacement agreement or arrangement
reasonably satisfactory in form and substance to the Majority Lenders
(or, with respect to the Performance Bond, to the Administrative Agent)
with a Person satisfactory to the Majority Lenders (or, with respect to
the Performance Bond, to the Administrative Agent) within 120 days
after such event shall have occurred or (vi) any Project Document other
than a Principal Project Document if such event could not reasonably be
expected to have a Material Adverse Effect; or
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(l) any Governmental Action, Right-of-Way, consent or other
approval which shall at the time be necessary for the performance of
any Project Activity in the manner contemplated under the Financing
Documents and the Project Documents shall be revoked, terminated,
withdrawn, modified, suspended or withheld or shall cease to be in full
force or effect, or any proceeding shall be commenced by or before any
Governmental Authority for the purpose of so revoking, terminating,
withdrawing, modifying, suspending or withholding any such Governmental
Action, Right-of-Way, consent or other approval and such proceeding is
not dismissed within 60 days of the commencement thereof, and in either
case such revocation, termination, withdrawal, modification,
suspension, withholding or cessation or such proceeding has or could
reasonably be expected to have a Material Adverse Effect; or
(m) operation of the Project shall be suspended for a period
of longer than 3 months or the Borrower shall abandon the operation of
the Project; or
(n) a Change in Control shall occur; or
(o) any Event of Loss shall occur and (A) unless the affected
portion of the Project is being repaired in accordance with Section
5.19(b), the Borrower shall have failed to deliver to the
Administrative Agent an EOL Certificate in accordance with the terms of
Section 5.19(a) (or either Present Value Coverage Ratio set forth in
the EOL Certificate so delivered to the Administrative Agent shall be
less than 1.50 to 1.00) or (B) if the affected portion of the Project
is being repaired in accordance with Section 5.19(b), the Borrower
shall have failed to comply with the provisions of such Section within
the time period specified therein; or
(p) an ERISA Event shall have occurred that, in the opinion of
the Majority Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to have a Material
Adverse Effect; or
(q) the Borrower or any Permitted Parent Company shall fail to
make any payment (whether of principal or interest and regardless of
amount) in respect of the Senior Unsecured Notes or in respect of any
other Material Indebtedness, when and as the same shall become due and
payable; or
(r) any event or condition occurs that results in the Senior
Unsecured Notes or any other Material Indebtedness of the Borrower or
any Permitted Parent Company becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of the Senior
Unsecured Notes or any other Material Indebtedness or any trustee or
agent on its or their behalf to cause the Senior Unsecured Notes
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or any other Material Indebtedness to become due, or requires the
prepayment, repurchase (or gives a holder or the holders of any of the
Senior Unsecured Notes the right to require the Borrower to purchase
all or any part of the Senior Unsecured Notes except with funds
available in the Excess Cash Flow Account), redemption or defeasance
thereof, prior to its scheduled maturity; or
(s) the invalidity, termination or revocation of the Bye-Laws
of the Borrower which (i) could be expected to impair the value of the
Collateral in any manner, (ii) is inconsistent with or violates the
terms of or could prevent compliance with any of the terms of any
Transaction Document or (iii) could adversely affect the Lenders in any
material way;
then, and in every such event (other than an event with respect to the Borrower
described in clause (e) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Majority Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (e) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
ACCOUNTS
SECTION 8.1. CREATION OF ACCOUNTS. (a) The Collateral Trustee hereby
establishes the following 16 special, segregated and irrevocable cash collateral
accounts in the name of the Collateral Trustee and for the benefit of the
Secured Parties, which accounts shall be maintained by the Collateral Trustee at
all times until
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the termination of this Agreement and the payment in full of all Obligations:
(1) Construction Account;
(2) Presale Proceeds Account;
(3) Revenue Account;
(4) Debt Reserve Account;
(5) Supplemental Debt Reserve Account;
(6) Operating Reserve Account;
(7) Current Account;
(8) Maintenance Reserve Account;
(9) Repair and Restoration Reserve Account;
(10) Capital Expenditure Account;
(11) Rebate Account;
(12) Insurance Proceeds Account;
(13) Special Payment Account;
(14) Sales and Issuances Proceeds Account;
(15) Excess Revenue Account; and
(16) Permitted Sources Account.
(b) All moneys, investments and securities at any time on deposit in
any of the Accounts shall be under the sole dominion and control of the
Collateral Trustee and shall constitute collateral in accordance with the terms
of the Security Documents to be held in the custody of the Collateral Trustee
for the purposes and on the terms set forth in the Security Documents and this
Article VIII.
SECTION 8.2. REQUIRED DEPOSITS INTO THE ACCOUNTS.
(a) CONSTRUCTION ACCOUNT. On the Closing Date, the Borrower shall
deposit into the Construction Account an amount equal to the construction costs
set forth in the Construction Cost Certificate which are payable to Persons
other than the Contractors.
(b) PRESALE PROCEEDS ACCOUNT. The Borrower shall deposit into the
Presale Proceeds Account all Presale Proceeds.
(c) REVENUE ACCOUNT. Subject to Sections 8.2(b), 8.2(i) and 8.2(j), the
Borrower shall deposit into the Revenue Account all Project Revenues of the
Borrower and its Subsidiaries.
(d) DEBT RESERVE ACCOUNT. The Collateral Trustee shall deposit amounts
into the Debt Reserve Account from amounts on deposit in the Revenue Account as
specified in Section 8.10(b).
(e) SUPPLEMENTAL DEBT RESERVE ACCOUNT. The Collateral Trustee shall
deposit
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amounts into the Supplemental Debt Reserve Account from amounts on deposit in
the Revenue Account as specified in Section 8.10(b).
(f) OPERATING RESERVE ACCOUNT. On the Closing Date, the Borrower shall
deposit into the Operating Reserve Account the amount set forth in the schedule
of "sources and uses" referred to in Section 4.1(l) to be deposited into the
Operating Reserve Account, PROVIDED such amount shall in no event exceed the
Operating Reserve Maximum Balance. The Collateral Trustee shall deposit amounts
into the Operating Reserve Account from amounts on deposit in the Presale
Proceeds Account as specified in Section 8.9 and from amounts on deposit in the
Revenue Account as specified in Section 8.10(b).
(g) CURRENT ACCOUNT. The Collateral Trustee shall deposit amounts into
the Current Account from amounts on deposit in the Revenue Account as specified
in Section 8.10(a).
(h) MAINTENANCE RESERVE ACCOUNT. The Collateral Trustee shall deposit
amounts into the Maintenance Reserve Account from amounts on deposit in the
Revenue Account as specified in Section 8.10(b).
(i) REPAIR AND RESTORATION RESERVE ACCOUNT. On the Closing Date, the
Borrower shall deposit into the Repair and Restoration Reserve Account the
amount set forth in the schedule of "sources and uses" referred to in Section
4.1(l) to be deposited into the Repair and Restoration Reserve Account, PROVIDED
such amount shall in no event exceed the R&R Reserve Maximum Balance. The
Borrower shall deposit into the Repair and Restoration Reserve Account all
Repair Maintenance Payments and Restoration Payments received by the Borrower.
(j) CAPITAL EXPENDITURE ACCOUNT. On the Closing Date, the Borrower
shall deposit into the Capital Expenditure Account the amount set forth in the
schedule of "sources and uses" referred to in Section 4.1(l) to be deposited
into the Capital Expenditure Account, PROVIDED such amount shall in no event
exceed the Capital Expenditure Maximum Balance. In addition, the Borrower shall
cause to be deposited directly into the Capital Expenditure Account any proceeds
received from Jordan Telecommunications PLC in respect of progress payments to
be made by Jordan Telecommunications PLC for the development of the landing in
Aqaba, Jordan, PROVIDED in no event shall more than $20,000,000 be deposited
into the Capital Expenditure Account pursuant to this sentence. The Collateral
Trustee shall deposit amounts into the Capital Expenditure Account from amounts
on deposit in the Presale Proceeds Account as specified in Section 8.9 and from
amounts on deposit in the
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Revenue Account as specified in Section 8.10(a)(iii).
(k) REBATE ACCOUNT. The Collateral Trustee shall deposit amounts into
the Rebate Account from amounts on deposit in the Revenue Account as specified
in Section 8.10(a)(i).
(l) INSURANCE PROCEEDS ACCOUNT. The Borrower, its Subsidiaries and the
Collateral Trustee shall deposit into the Insurance Proceeds Account all
Casualty Proceeds.
(m) SPECIAL PAYMENT ACCOUNT. The Borrower, its Subsidiaries and the
Collateral Trustee shall deposit into the Special Payment Account all Special
Payments.
(n) SALES AND ISSUANCES PROCEEDS ACCOUNT. The Borrower and its
Subsidiaries shall deposit into the Sales and Issuances Proceeds Account all Net
Cash Proceeds received.
(o) EXCESS REVENUE ACCOUNT. The Borrower and its Subsidiaries shall
deposit amounts into the Excess Revenue Account from amounts on deposit in the
Revenue Account or the Sales and Issuances Proceeds Account as specified in
Section 8.10(b) or Section 8.21(a), as applicable.
(p) PERMITTED SOURCES ACCOUNT. The Borrower shall deposit amounts into
the Permitted Sources Account with funds contemplated by clauses (d) and (e) of
the definition of "Permitted Sources" to the extent necessary to cause such
funds to constitute a "Permitted Source."
SECTION 8.3. DEPOSITS HELD AS CASH COLLATERAL. (a) The Collateral
Trustee agrees to accept all revenues, cash, payments, insurance and casualty
proceeds, other amounts and Permitted Investments to be delivered to or held by
the Collateral Trustee pursuant to the terms of this Agreement or the Security
Documents. The Collateral Trustee shall hold and safeguard the Accounts (and the
revenues, cash, payments, insurance and casualty proceeds, instruments,
securities and other amounts on deposit therein) during the term of this
Agreement and shall treat the revenues, cash, payments, insurance and casualty
proceeds, instruments, securities and other amounts in the Accounts as funds,
instruments, securities and other properties pledged by the Borrower to the
Collateral Trustee as collateral securing the Obligations in accordance with the
provisions of this Agreement and the Security Documents.
(b) All moneys, cash equivalents, instruments, investments and
securities at any
116
time on deposit in the Accounts shall constitute security for the payment and
performance by the Borrower of the Obligations and shall at all times be subject
to the sole dominion and control of the Collateral Trustee and shall be held in
the custody of the Collateral Trustee in trust for the purposes of, and on the
terms set forth in, this Agreement.
(c) Neither the Borrower, any Subsidiary of the Borrower nor any
Shareholder shall have any rights or powers with respect to any amounts in the
Accounts or any part thereof, except the right to have such amounts applied in
accordance with this Article VIII.
SECTION 8.4. SOURCE OF PAYMENTS; DEPOSITS IRREVOCABLE. (a) The Borrower
shall use reasonable efforts to ensure that all amounts delivered to the
Collateral Trustee shall be accompanied by information in reasonable detail
specifying the source of the amounts and the Account into which such amounts are
to be deposited. If the Collateral Trustee shall be unable to determine the
source of any payments received or the Account or Accounts into which such
payments are to be deposited, the Collateral Trustee shall hold such amounts in
the Revenue Account (and shall not be applied in accordance with Section 8.10)
pending receipt of Proper Instructions from the Administrative Agent as to how
to apply such amount.
(b) Any deposit made into any Account hereunder shall, absent manifest
error, be irrevocable and the amount of such deposit and any instrument or
security held in such Account and all interest thereon shall be held in trust by
the Collateral Trustee and applied solely as provided in this Article VIII.
SECTION 8.5. BOOKS OF ACCOUNT; STATEMENTS. The Collateral Trustee shall
maintain books of account on a cash basis and record therein all deposits into
and transfers to and from the Accounts and all investment transactions effected
by the Collateral Trustee pursuant to Section 8.27 and any such recordation
shall constitute PRIMA FACIE evidence of the information recorded.
SECTION 8.6. LOCATION OF THE ACCOUNTS. The Accounts shall be maintained
by the Collateral Trustee with Bermuda Commercial Bank Limited at its principal
office located at 00 Xxxxxx Xxxxxx, Xxxxxxxx XX 12, Bermuda, and shall not,
without the prior written consent of the Administrative Agent, be moved to any
different location.
SECTION 8.7. RECEIPT BY THE BORROWER. The Borrower agrees that if any
payments or other amounts are received directly by it, it shall deliver such
amounts in the exact form received (but with the Borrower's endorsement if
necessary) to the Collateral Trustee for deposit into the applicable Account not
later than the first Business Day after the Borrower's receipt. Until so
deposited, all such amounts shall be held in trust by the Borrower for the
Collateral Trustee and the other Secured Parties
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as additional collateral security for the Obligations and such amounts shall not
be commingled with any other funds or property of the Borrower.
SECTION 8.8. CONSTRUCTION ACCOUNT. (a) The Collateral Trustee shall,
upon receipt by it of a certificate of the Borrower setting forth the costs due
and payable and to be paid from the Construction Account (which certificate
shall be consistent with the Construction Cost Certificate), distribute, from
the cash available in the Construction Account, (A) directly to each Person to
which an amount in excess of $200,000 is due and payable, the amounts identified
in such certificate referred to above and (B) to the Borrower for the benefit of
the Persons entitled thereto, all other amounts then due and owing as set forth
in such certificate.
(b) The Collateral Trustee shall, upon receipt by it of a certificate
of the Borrower (countersigned by the Administrative Agent) stating that all
costs set forth in the Construction Cost Certificate to be paid from the
Construction Account have been paid or are no longer payable, distribute, from
the cash available in the Construction Account, the amounts set forth in such
certificate in the following order of priority:
FIRST, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Term Loans, if any;
SECOND, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Revolving Credit
Loans, if any;
THIRD, to the Administrative Agent, to be applied to the
prepayment of the unpaid principal of the Revolving Credit Loans, if
any;
FOURTH, to the Administrative Agent, to be applied to the
prepayment of the unpaid principal of the Term Loans, if any;
FIFTH, to the Administrative Agent, to be applied to the cash
collateralization of the unused Revolving Credit Commitments, on terms
and pursuant to documentation reasonably satisfactory to the
Administrative Agent;
SIXTH, to the Administrative Agent, to be applied to the
payment of all other Obligations; and
SEVENTH, the remaining balance, if any, shall be transferred
to the Revenue Account.
SECTION 8.9. PRESALE PROCEEDS ACCOUNT. The Collateral Trustee shall,
upon receipt by it of a certificate of the Borrower (countersigned by the
Administrative Agent), distribute, from the cash available in the Presale
Proceeds Account, the amounts set
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forth in such certificate in the following order of priority:
FIRST, to the Repair and Restoration Reserve Account, in an
amount equal to the difference between (a) the R&R Reserve Maximum
Balance and (b) an amount equal to the sum of (x) the aggregate amount
deposited into the Repair and Restoration Reserve Account on the
Closing Date and (y) the aggregate amount previously deposited into the
Repair and Restoration Reserve Account pursuant to this clause;
provided in no event shall the balance therein exceed the R&R Reserve
Maximum Balance;
SECOND, to the Operating Reserve Account, in an amount equal
to the difference between (a) the Operating Reserve Maximum Balance and
(b) an amount equal to the sum of (x) the aggregate amount deposited
into the Operating Reserve Account on the Closing Date and (y) the
aggregate amount previously deposited into the Operating Reserve
Account pursuant to this clause; provided in no event shall the balance
therein exceed the Operating Reserve Maximum Balance;
THIRD, to the Capital Expenditure Account, in an amount equal
to the difference between (a) the Capital Expenditure Maximum Balance
and (b) an amount equal to the sum of (x) the aggregate amount
deposited into the Capital Expenditure Account on the Closing Date and
(y) the aggregate amount previously deposited into the Capital
Expenditure Account pursuant to this clause;
FOURTH, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Term Loans, if any;
and
FIFTH, to the Administrative Agent, to be applied to the
prepayment of the unpaid principal of the Term Loans.
SECTION 8.10. REVENUE ACCOUNT.
(a) MONTHLY PAYMENT OF OPERATING EXPENSES AND CAPITAL EXPENDITURES;
DAILY PAYMENT OF DEBT SERVICE. (i) On or before the fifth Business Day prior to
the end of each month (or if such day is not a Business Day, the immediately
preceding Business Day), the Borrower shall deliver to the Collateral Trustee
and the Administrative Agent an Expense Certificate requesting distributions to
pay Operating Expenses (other than repair maintenance expenses and restoration
expenses reimbursable by third parties) and capital expenditures from the
Revenue Account, the amounts of which distributions
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shall, unless consented to in writing by the Majority Lenders, conform to the
then current Operating Budget of the Borrower and distributions to pay income
taxes from the Revenue Account. On the 30th day of each month or, if such day is
not a Business Day, the immediately preceding Business Day (each such date, an
"OPERATING EXPENSE TRANSFER DATE"), the Collateral Trustee shall distribute,
from the cash available in the Revenue Account, FIRST, with respect to any
Project Revenues which have been received and are subject to potential rebate or
other return, that portion of such Project Revenues directly to the Rebate
Account and SECOND, (A) directly to each Person to which an amount in excess of
$200,000 is due and payable, the amounts identified as Operating Expenses or
capital expenditures or income taxes of the Borrower then due and owing in Item
1 of the Expense Certificate referred to above, (B) to the Borrower for the
benefit of the Persons entitled thereto, all other Operating Expenses and
capital expenditures or income taxes of the Borrower then due and owing in Item
2 of such Expense Certificate, and (C) to the Current Account, the amounts
identified as Operating Expenses and capital expenditures or income taxes of the
Borrower expected to be due and owing prior to the next Operating Expense
Transfer Date in Item 4 of such Expense Certificate.
(ii) The Borrower shall be permitted to deliver a certificate to the
Collateral Trustee and the Administrative Agent on any other day of the month
setting forth the fees, interest and other obligations due and owing under this
Agreement or any other Financing Document and the Collateral Trustee shall
distribute from the cash available in the Revenue Account the amount of such
fees, interest or other obligations directly to the Administrative Agent, for
the benefit of the persons entitled thereto.
(iii) Within 15 days after the end of each Operating Year of the
Borrower, and so long as no Designated Event shall have occurred and be
continuing, the Borrower shall be permitted to deliver a certificate to the
Collateral Trustee and the Administrative Agent (which shall be countersigned by
the Administrative Agent) setting forth the aggregate amount of capital
expenditures spent by the Borrower in such Operating Year from the $500,000
allocation for capital expenditures in the Operating Budget for such year and to
request the Collateral Trustee to distribute from cash available in the Revenue
Account to the Capital Expenditure Account an amount (the "REQUESTED AMOUNT")
not in excess of the difference, if positive, between $500,000 and such
aggregate amount of capital expenditures. Upon the receipt of such certificate,
the Collateral Trustee shall distribute from the cash available in the Revenue
Account the requested amount to the Capital Expenditure Account.
(b) QUARTERLY TRANSFERS. On each Principal Payment Date, the Collateral
Trustee shall distribute from the cash available in the Revenue Account (after
making any distributions required by paragraph (a) above) the following amounts
in the following order of priority:
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FIRST, (i) to the Administrative Agent, for the account of (A)
the Term Lenders, the amount, if any, equal to the scheduled principal
payments with respect to the Term Loans set forth in Schedule 2.7(b)
and all accrued and unpaid interest thereon which the Administrative
Agent certifies to the Borrower and the Collateral Trustee to be due
and payable on such date and (B) the Revolving Credit Lenders, the
amount, if any, equal to the principal with respect to the Revolving
Credit Loans and all accrued and unpaid interest thereon which the
Administrative Agent certifies to the Borrower and the Collateral
Trustee to be due and payable on such date, PRO RATA and (ii) if such
Principal Payment Date is in January or July, to the Senior Unsecured
Note Trustee, the amount, if any, equal to the accrued and unpaid
interest on the Senior Unsecured Notes which the Borrower certifies to
the Collateral Trustee to be due and payable on such date (or, if such
Principal Payment Date is not a Senior Unsecured Note Interest Payment
Date, the amount, if any, equal to the accrued and unpaid interest on
the Senior Unsecured Notes which the Borrower certifies to the
Collateral Trustee to be due and payable on the immediately succeeding
Senior Unsecured Note Interest Payment Date); PROVIDED, HOWEVER, that
in the event that the cash available in the Revenue Account is
insufficient to make all payments required under clauses (i) and (ii),
the payments required to be made under clause (i) shall be paid first;
SECOND, to the Administrative Agent, to be applied to the
prepayment of all of the unpaid principal of the Revolving Credit
Loans;
THIRD, (i) upon the occurrence and during the continuation of
a Designated Event, to the Operating Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Operating Reserve Maximum Balance or (ii) upon the written request of
the Borrower, to the Operating Reserve Account, an amount so requested
so long as the balance therein (after giving effect to the requested
transfer) will not exceed the Operating Reserve Maximum Balance;
FOURTH, to the Debt Reserve Account, an amount sufficient to
cause the amounts on deposit therein to equal the Debt Reserve Required
Balance as of such date (as set forth in the certificate of the
Borrower delivered pursuant to Section 5.2(c) or, if the Borrower shall
not have delivered such a certificate to the Collateral Trustee and the
Administrative Agent, as set forth by the Administrative Agent);
FIFTH, to the Maintenance Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Maintenance Reserve Required Balance as of such date (as set forth in
the certificate of the Borrower delivered pursuant to Section 5.2(c)
or, if the Borrower shall not have delivered such a
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certificate to the Collateral Trustee and the Administrative Agent,
as set forth by the Administrative Agent);
SIXTH, to the Administrative Agent, for the account of the
Term Lenders, an amount sufficient to reduce the aggregate outstanding
principal amount of the Term Loans to the amount set forth for such
year under the heading "Outstanding Amount" on Schedule 8.10(b), as
certified by the Administrative Agent to the Borrower and the
Collateral Trustee;
SEVENTH, if requested by the Borrower, to the Supplemental
Debt Reserve Account, the amount requested by the Borrower so long as
the balance therein (after giving effect to the requested transfer)
will not exceed the Supplemental Debt Reserve Maximum Balance;
EIGHTH, to the Administrative Agent, for the account of the
Term Lenders, an amount equal to 50% of the remaining cash available in
the Revenue Account (which amount shall be increased to 100% of the
remaining cash available in the Revenue Account during the continuance
of a Designated Event), to be applied to the prepayment of the Term
Loans (and, after the payment in full of the Term Loans, to be applied
to the cash collateralization of the Revolving Credit Commitments, on
terms and pursuant to documentation reasonably satisfactory to the
Administrative Agent); and
NINTH, so long as no Default or Event of Default shall have
occurred and be continuing, the remainder, if any, to be applied to
such purposes (including the making of equity dividends or distribution
to the Excess Revenue Account) as the Borrower may direct and which do
not violate the terms of this Agreement and the other Financing
Documents.
SECTION 8.11. DEBT RESERVE ACCOUNT. If, as of any date on which the
payment of interest on or principal of the Loans and the Senior Unsecured Notes
becomes due and payable as certified by the Borrower to the Collateral Trustee
and the Administrative Agent, the cash available in the Revenue Account and the
Excess Revenue Account (and, if required, the Supplemental Debt Reserve Account)
is insufficient to make such payment obligations on such date in accordance with
Sections 8.10 and 8.22 (and, if required, Section 8.12), the Collateral Trustee
shall transfer FIRST, to the Administrative Agent, for the benefit of the
Lenders and SECOND, to the Senior Unsecured Note Trustee, for the benefit of the
holders of the Senior Unsecured Notes, their respective amounts to the extent
cash is available in the Debt Reserve Account to remedy any such insufficiency.
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SECTION 8.12. SUPPLEMENTAL DEBT RESERVE ACCOUNT. If, as of any date on
which the payment of interest on or principal of the Loans and the Senior
Unsecured Notes becomes due and payable as certified by the Borrower to the
Collateral Trustee and the Administrative Agent, the cash available in the
Revenue Account and the Excess Revenue Account is insufficient to make such
payment obligations on such date in accordance with Sections 8.10 and 8.22, the
Collateral Trustee shall transfer FIRST, to the Administrative Agent, for the
benefit of the Lenders and SECOND, to the Senior Unsecured Note Trustee, for the
benefit of the holders of the Senior Unsecured Notes, their respective amounts
to the extent cash is available in the Supplemental Debt Reserve Account
(excluding any amounts deposited therein in accordance with Section 2.9(k) and
accrued interest thereon) to remedy any such insufficiency.
SECTION 8.13. OPERATING RESERVE ACCOUNT. If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account and the Excess
Revenue Account is less than the Operating Expenses set forth in the Expense
Certificate (or other certificate) setting forth such Operating Expenses to be
paid on such date, the Collateral Trustee shall transfer to the Person(s)
entitled thereto in accordance with Section 8.10(a) (to the extent cash is
available in the Operating Reserve Account) the amount of any deficiency in the
payment of the Operating Expenses set forth in such certificate. Funds in the
Operating Reserve Account will not be available for interest on and principal of
the Loans or the Senior Unsecured Notes.
SECTION 8.14. CURRENT ACCOUNT. The Collateral Trustee shall pay, from
and to the extent of cash available in the Current Account and as set forth in a
certificate of the Borrower delivered to the Collateral Trustee and the
Administrative Agent, (i) directly to each Person to which an amount in excess
of $200,000 is due and payable, the amounts previously identified as Operating
Expenses in Item 4 of the most recently delivered Expense Certificate which are
then due and owing or (ii) to the Borrower for the benefit of the Persons
entitled thereto, all other such Operating Expenses previously identified in
Item 4 of the most recently delivered Expense Certificate which are then due and
owing.
SECTION 8.15. MAINTENANCE RESERVE ACCOUNT. If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account, the Excess
Revenue Account and, if required, the Operating Reserve Account, is less than
the Operating Expenses set forth in the Expense Certificate (or other
certificate) setting forth such Operating Expenses to be paid on such date, the
Collateral Trustee shall transfer to the Person(s) entitled thereto in
accordance with Section 8.10(a) (to the extent cash is available in the
Maintenance Reserve Account) the amount of any deficiency in the payment of the
Operating Expenses set forth in such certificate.
SECTION 8.16. REPAIR AND RESTORATION RESERVE ACCOUNT. Upon the delivery
by
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the Borrower to the Collateral Trustee and the Administrative Agent of a
certificate of amounts due and payable in respect of a repair operation or
restoration which the Borrower may recover from PTTs pursuant to paragraph 11.2
of the C&MA or pursuant to comparable arrangements, the Collateral Trustee shall
distribute, from the cash available in the Repair and Restoration Reserve
Account, (A) directly to each Person to which an amount in excess of $200,000 is
due and payable, the amounts then due and owing identified in the certificate
referred to above, and (B) to the Borrower for the benefit of the Persons
entitled thereto, all other amounts then due and owing identified in such
certificate.
SECTION 8.17. CAPITAL EXPENDITURE ACCOUNT. (a) Upon the delivery by the
Borrower of a certificate to the Collateral Trustee and the Administrative Agent
of any amount due and payable in respect of capital expenditures which are
permitted by the terms of this Agreement to be paid from cash available in the
Capital Expenditure Account, the Collateral Trustee shall distribute, from the
cash available in the Capital Expenditure Account, (A) directly to each Person
to which an amount in excess of $200,000 is due and payable, the amounts then
due and owing identified in the certificate referred to above, and (B) to the
Borrower for the benefit of the Persons entitled thereto, all other amounts then
due and owing identified in such certificate.
(b) The Borrower may on any date (the "S&J SAVINGS DECLARATION DATE")
deliver to the Administrative Agent and the Collateral Trustee a certificate
setting forth in detail by budget category the aggregate capital expenditures
the Borrower reasonably expects to incur pursuant to Section 6.16(b), and the
amount, if any (THE "S&J EXPECTED SAVINGS AMOUNT"), by which $35,000,000 is in
excess of such aggregate capital expenditures (whether as a result of the
abandonment by the Borrower of any transaction contemplated by Section 6.16(b),
the use or intended use of Capacity as non-cash consideration or otherwise). The
Collateral Trustee shall distribute, from funds available in the Capital
Expenditure Account, the amount (if any) by which the S&J Expected Savings
Amount exceeds $5,000,000, to the Administrative Agent for the prepayment of
principal of the Loans, together with accrued interest thereon. Within 60 days
after the completion or abandonment of all transactions contemplated by Section
6.16(b), the Borrower shall deliver to the Administrative Agent and the
Collateral Trustee a certificate setting forth the actual aggregate capital
expenditures incurred in connection therewith, and the amount, if any (the "S&J
ACTUAL SAVINGS AMOUNT"), by which $35,000,000 is in excess of such actual
capital expenditures. If the S&J Actual Savings Amount is greater than the S&J
Expected Savings Amount, the Collateral Trustee shall distribute, from funds
available in the Capital Expenditure Account, to the Administrative Agent for
the prepayment of principal of the Loans (with accrued interest thereon) the
difference (if positive) between (i) the amount that would have been distributed
to the Administrative Agent if the S&J Actual Savings Amount were used in the
calculation on the S&J Savings Declaration Date and (ii) the amount of actual
distribution to the Administrative Agent.
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SECTION 8.18. REBATE ACCOUNT. (a) Upon the delivery by the Borrower of
a certificate to the Collateral Trustee and the Administrative Agent that
amounts previously distributed into the Rebate Account in respect of a potential
rebate are now due and payable, the Collateral Trustee shall distribute, from
the cash available in the Rebate Account, (A) directly to each Person to which
an amount in excess of $200,000 is due and payable, the amounts then due and
owing identified in the certificate referred to above, and (B) to the Borrower
for the benefit of the Persons entitled thereto, all other amounts then due and
owing identified in such certificate.
(b) Upon the delivery by the Borrower of a certificate to the
Collateral Trustee and the Administrative Agent that amounts previously
distributed into the Rebate Account in respect of a potential rebate cease to be
subject to such rebate, the Collateral Trustee shall distribute, from the cash
available in the Rebate Account, such amounts to the Revenue Account.
SECTION 8.19. INSURANCE PROCEEDS ACCOUNT. (a) All cash, cash
equivalents, instruments, investments and securities at any time on deposit in
the Insurance Proceeds Account, including all interest or other income earned
with respect thereto, are herein called the "CASUALTY PROCEEDS DEPOSITS".
(b) The Casualty Proceeds Deposits shall be accumulated in the
Insurance Proceeds Account and held therein until paid to or upon the order of
the Borrower as provided in paragraph (c) of this Section, or paid to the
Administrative Agent as provided in paragraph (d) of this Section, or returned
to the Borrower as provided in Section 8.32.
(c) Subject to the provisions of paragraph (d) of this Section,
Casualty Proceeds Deposits shall be paid over to or upon the order of the
Borrower (or directly to the Persons entitled thereto, in the case of amounts in
excess of $200,000) to reimburse it for, or to pay, the cost of repairing,
rebuilding or otherwise replacing the damaged or destroyed or lost or condemned
property in respect of which such moneys were received, upon the receipt by the
Collateral Trustee and the Administrative Agent of a certificate of the Borrower
(A) setting forth in reasonable detail the work done or proposed to be done and
materials purchased or to be purchased by way of the renewal, repair, rebuilding
or other replacement of the damaged or destroyed or lost or condemned property
and (B) stating the specific amount requested to be paid over to or upon the
order of the Borrower (or such other Person) or that such amount is requested to
reimburse the Borrower, as the case may be, for, or to pay, costs actually
incurred to repair, rebuild or replace property and that such amount, together
with amounts
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remaining in the Insurance Proceeds Account for such purpose and other funds
of the Borrower available for such purpose, are sufficient to pay in full the
costs of such renewal, repair, rebuilding or other replacement. In the event
that any amounts remain in the Insurance Proceeds Account after application
thereof in accordance with this paragraph, the Collateral Trustee shall
transfer such Casualty Proceeds Deposits to the Administrative Agent to be
applied to the payment of the Obligations in accordance with Sections 2.9(d)
and 2.9(j).
(d) If the Borrower or the Administrative Agent shall at any time
notify the Collateral Trustee that an Event of Loss has occurred, then, unless
the FLAG System is being repaired in accordance with Section 5.19(b), the
Collateral Trustee shall, on the third Business Day following the date on which
the Casualty Proceeds with respect to such Event of Loss are deposited to the
Insurance Proceeds Account, withdraw the Casualty Proceeds Deposits from the
Insurance Proceeds Account and deliver the same to the Administrative Agent to
be applied to the payment of the Obligations in accordance with Section 2.9(d).
If the FLAG System is being repaired in accordance with Section 5.19(b), the
provisions of paragraph (c) above shall apply.
SECTION 8.20. SPECIAL PAYMENT ACCOUNT. All Special Payments deposited
in the Special Payment Account shall be applied by the Collateral Trustee to the
Administrative Agent for the prepayment of principal of the Loans, together with
accrued interest thereon (and, thereafter, to the cash collateralization of the
Revolving Credit Commitments on terms and pursuant to documentation reasonably
satisfactory to the Administrative Agent). All other Special Payments shall be
transferred to the Revenue Account to be applied in accordance with Section
8.10.
SECTION 8.21. SALES AND ISSUANCES PROCEEDS ACCOUNT. Amounts on deposit
in the Sales and Issuances Proceeds Account shall be applied as follows:
(a) if such amounts are Net Cash Proceeds of any new issuance
after the Closing Date of Capital Stock of the Borrower or any
Permitted Parent Company, (i) an amount equal to the portion thereof
being held in accordance with the proviso contained in Section
2.9(c)(i) for application to the payment of Permitted Upgrades (which
shall be specified in a certificate of the Borrower delivered to the
Collateral Trustee and the Administrative Agent before or when such Net
Cash Proceeds are deposited) shall be held and applied to the payment
thereof upon receipt by the Collateral Trustee and the Administrative
Agent of a certificate of the Borrower specifying the Person(s) to whom
such payment of Permitted Upgrades are due and owing, PROVIDED that no
amount shall be expended under this clause (i) if a Default, Event of
Default or Designated Event shall have occurred and be continuing;
PROVIDED, FURTHER, if any such portion is not expended within six
months (or such longer period not in excess of one year as the
Administrative Agent may approve in writing) of its receipt into the
Sales
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and Issuances Proceeds Account, the Collateral Trustee shall, at
the request of the Administrative Agent, apply 50% of such unexpended
amount to the Administrative Agent to prepay the Loans in accordance
with Section 2.9(c)(i) and the remainder of such unexpended amount
shall remain in the Sales and Issuance Proceeds Account or, at the
request of the Borrower, be distributed to the Borrower and (ii) the
remainder shall be distributed, 50% to the Administrative Agent for the
prepayment of the Loans in accordance with Section 2.9(c)(i) and, so
long as no Default or Event of Default shall have occurred and be
continuing, 50% to the Borrower, to be used in such manner (including
equity dividends or distribution to the Excess Revenue Account) as the
Borrower shall determine in accordance with the terms of this
Agreement;
(b) if such amounts are Net Cash Proceeds of an incurrence of
Indebtedness after the Closing Date by the Borrower in accordance with
clause (g) of Section 6.1 or by any Subsidiary of the Borrower or any
Permitted Parent Company (i) an amount equal to the portion thereof
being held in accordance with the proviso contained in Section
2.9(c)(ii) for application to the payment of Permitted Upgrades (which
shall be specified in a certificate of the Borrower delivered to the
Collateral Trustee and the Administrative Agent when such Net Cash
Proceeds are deposited) shall be held and applied to the payment
thereof upon receipt of a certificate of the Borrower specifying the
Person(s) to whom such payments of Permitted Upgrades are due and
owing, PROVIDED that no amount shall be expended under this clause (i)
if a Default, Event of Default or Designated Event shall have occurred
and be continuing and (ii) the remainder shall be applied to the
prepayment of the Loans in accordance with Sections 2.9(c)(ii) and
2.9(j);
(c) if such amounts are Net Cash Proceeds in respect of any
sale, transfer or other disposition of any asset of the Borrower (other
than sales, transfers or dispositions of Capacity described in clause
(a) of Section 6.4 and dispositions resulting in aggregate Net
Cash Proceeds not exceeding $1,000,000 during any fiscal year of the
Borrower), (i) an amount equal to the portion thereof being held to be
used to replace such asset disposed of with similar asset of at least
substantially the same value, utility and useful life (which shall be
specified in a certificate of the Borrower delivered to the Collateral
Trustee and the Administrative Agent when such Net Cash proceeds are
deposited) shall be held and applied to the payment of the relevant
expenses upon receipt by the Collateral Trustee and the Administrative
Agent of a certificate of the Borrower specifying the Person(s) to whom
such expenses are due and owing, and (ii) if any such Net Cash Proceeds
are not expended in accordance with clause (i) above within three
months of their receipt into the Sales and Issuances Proceeds Account,
such Net Cash Proceeds shall be applied to the prepayment of the Loans
in accordance with Sections 2.9(c)(iii)
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and 2.9(j); and
(d) if such amounts are Net Cash Proceeds of a Permitted Sale
Leaseback Transaction, such amount shall be distributed to the
Administrative Agent to be applied to the prepayment of the Loans in
accordance with Sections 2.9(e) and 2.9(j).
SECTION 8.22. EXCESS REVENUE ACCOUNT. (a) If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account is less than
the Operating Expenses set forth in the Expense Certificate (or other
certificate) setting forth such Operating Expenses due on such date, the
Collateral Trustee shall transfer to the Person(s) entitled thereto in
accordance with Section 8.10(a) (to the extent cash is available in the Excess
Revenue Account) the amount of any deficiency in the payment of the Operating
Expenses set forth in such certificate.
(b) If, as of any date on which the payment of interest on or principal
of the Loans and the Senior Unsecured Notes becomes due and payable as certified
by the Borrower to the Collateral Trustee and the Administrative Agent, the cash
available in the Revenue Account is insufficient to make such payment
obligations on such date in accordance with Section 8.10, the Collateral Trustee
shall transfer FIRST, to the Administrative Agent, for the benefit of the
Lenders and SECOND, to the Senior Unsecured Note Trustee, for the benefit of the
holders of the Unsecured Notes, their respective amounts to the extent cash is
available in the Excess Revenue Account to remedy any such insufficiency.
(c) Within 45 days after the end of each Operating Year of the
Borrower, the Borrower shall be permitted to request the Collateral Trustee to
distribute any or all amounts available in the Excess Revenue Account to the
Excess Cash Flow Account. Upon such request, the Collateral Trustee shall
distribute such amount from the cash available in the Excess Revenue Account to
the Excess Cash Flow Account.
SECTION 8.23. PERMITTED SOURCES ACCOUNT. Amounts on deposit in the
Permitted Sources Account shall be paid over to or upon the order of the
Borrower (or directly to the Persons entitled thereto, in the case of amounts in
excess of $200,000) to pay costs in respect of which such Permitted Sources were
deposited, upon the receipt by the Collateral Trustee and the Administrative
Agent of a certificate of the Borrower stating the specific amount requested to
be paid over to or upon the order of the Borrower (or such other Person) to pay
such costs actually incurred and setting forth a brief description of the costs
to be paid. If, at any time, amounts that were deposited into the Permitted
Sources Account are no longer necessary to pay costs in
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respect of which such funds were deposited, as certified by a Responsible
Officer of the Borrower to the Collateral Trustee (and countersigned by the
Administrative Agent), the Collateral Trustee shall transfer such amounts
from amounts on deposit in the Permitted Sources Account to the Excess Cash
Flow Account.
SECTION 8.24. DELIVERY OF OFFICER'S CERTIFICATES; TIMING OF PAYMENTS.
(a) Each certificate to be delivered by the Borrower under this Article shall be
issued by a Responsible Officer of the Borrower and shall be delivered (unless
otherwise specified) not later than 12:00 noon, New York City time, on the
Business Day immediately prior to the day on which the Collateral Trustee is
required to make transfers hereunder. Any certificate of a Responsible Officer
of the Borrower delivered later than the time specified herein shall
nevertheless be considered valid and shall be honored by the Collateral Trustee
on or as promptly after the date otherwise specified herein for payment as is
practicable, subject to the availability of cash in the applicable Account.
(b) Subject to (i) the timely receipt of a certificate of a Responsible
Officer of the Borrower as set forth in paragraph (a) above, (ii) the
availability of cash in the applicable Account, (iii) other circumstances beyond
the control of the Collateral Trustee and (iv) if sought by the Collateral
Trustee due to a perceived inconsistency between the Borrower's instructions and
the terms of this Agreement, the receipt from the Administrative Agent of Proper
Instructions confirming the requested payment, the Collateral Trustee shall make
any payment hereunder required (except for transfers between Accounts) by means
of wire transfer of immediately available funds, to the address of the payee(s)
set forth in the applicable certificate, to be received prior to 2:00 p.m., New
York City time, on the date specified herein for such payment.
SECTION 8.25. RELEASE OF EXCESS AMOUNTS. If, as of any Principal
Payment Date, (a)(i) an amount is on deposit in the Debt Reserve Account or the
Maintenance Reserve Account in excess of the Debt Reserve Required Balance or
the Maintenance Reserve Required Balance, as applicable, or (ii) an amount is on
deposit in the Supplemental Debt Reserve Account, the Operating Reserve Account
or the Repair and Restoration Reserve Account in excess of the Supplemental Debt
Reserve Maximum Balance, the Operating Reserve Maximum Balance or the R&R
Reserve Maximum Balance, as applicable, in each case whether as the result of
the actual realization of income or gain on the amounts on deposit in such
Account or otherwise and (b) no Event of Default or Designated Event has
occurred and is continuing, then the Collateral Trustee shall, upon the
instruction of the Borrower, distribute any such excess amounts to the Revenue
Account.
SECTION 8.26. EVENT OF DEFAULT. Any other provision contained in this
Agreement to the contrary notwithstanding, (a) if the Collateral Trustee shall
have received notice from the Administrative Agent that a Default shall have
occurred and be continuing, distributions from the Accounts shall be made only
with the consent of the
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Majority Lenders and (b) if the Collateral Trustee shall have received notice
from any Secured Party that an Event of Default shall have occurred and be
continuing and the Loans have been accelerated in accordance with Article
VII, the Collateral Trustee shall upon the request of the Majority Lenders
then apply any proceeds in any Account in the following order of priorities:
FIRST, to the payment of all expenses, liabilities and
advances incurred or made by the Collateral Trustee or any other
Secured Party in connection with the collection of any such amounts or
the liquidation of any Permitted Investments and of all unpaid fees
owing to the Collateral Trustee or the Administrative Agent;
SECOND, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest (whether or not due) on the
Loans;
THIRD, to the Administrative Agent, to be applied to the
payment of all of the unpaid principal (whether or not due) of the
Loans;
FOURTH, to the Administrative Agent, to be applied to the
payment of all other Obligations (whether or not due); and
FINALLY, to the Borrower, or such other Person as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 8.27. INVESTMENT. Any cash held by the Collateral Trustee in
any Account shall be invested by the Collateral Trustee from time to time as
directed in writing by the Borrower (or, upon the receipt of notice by the
Collateral Trustee from the Administrative Agent that an Event of Default has
occurred and is continuing, by the Administrative Agent in its sole discretion)
in Permitted Investments. Any income or gain realized as a result of any such
investment shall be held as part of the applicable Account and reinvested as
provided herein. If any income tax is payable on account of any such income or
gain, it shall be paid by the Borrower or its Affiliates. Any such investment
may be sold by the Collateral Trustee whenever necessary to make any
distribution required by this Agreement. The Collateral Trustee shall have no
liability for any loss resulting from any such investment or sale thereof other
than by reason of its willful misconduct or gross negligence. The Collateral
Trustee will promptly notify the Borrower and the Administrative Agent of any
loss resulting from any such investment or sale.
SECTION 8.28. STATEMENTS OF ACCOUNTS. Not later than five Business Days
following the end of each calendar month, and from time to time upon written
request of the Administrative Agent or the Borrower, the Collateral Trustee
shall provide to the Borrower and the Administrative Agent a statement of
amounts on deposit in each Account and Permitted Investments as of the end of
the prior month, (b) a statement of
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all transfers into and withdrawals from each Account during the prior month
and (c) a statement of purchases and sales of Permitted Investments, and the
receipt, application or existence of any income, dividends or capital gains
with respect thereto, during the prior month.
SECTION 8.29. VALUE. Cash and Permitted Investments on deposit from
time to time in the Accounts shall be valued by the Collateral Trustee as
follows:
(a) cash shall be valued at the face amount thereof; and
(b) Permitted Investments shall be valued at the lesser of the
face amount and the purchase price.
SECTION 8.30. OTHER DETERMINATIONS. The Borrower, the Administrative
Agent and the Collateral Trustee may establish procedures not materially
inconsistent with this Agreement pursuant to which the Collateral Trustee may
conclusively determine, for purposes of this Agreement, the amounts from time to
time to be distributed or paid by the Collateral Trustee from cash available in
the Accounts or pursuant to which the Collateral Trustee and the Borrower may
provide for reasonable operating and administrative flexibility.
SECTION 8.31. SALES OF PERMITTED INVESTMENTS. The Collateral Trustee
will use its reasonable commercial efforts to sell Permitted Investments so that
actual cash is available, on each date on which a distribution is to be made
pursuant to this Agreement, for the Collateral Trustee to make such distribution
in cash on such date. The amount of any check or other instrument which may be
deposited in any Account shall not be treated as cash available until the final
collection thereof.
SECTION 8.32. AVAILABLE CASH. In determining the amount of available
cash in any Account at any time, in addition to any cash then on deposit in such
Account, the Collateral Trustee shall treat as available cash the amount which
the Collateral Trustee would have received on such day if the Collateral Trustee
had liquidated all the Permitted Investments (at then prevailing market prices)
then on deposit in such Account.
SECTION 8.33. TERMINATION. Upon termination of this Agreement and the
payment in full of all Obligations, the Administrative Agent shall deliver
instructions to the Collateral Trustee terminating the trust relationship
between the Collateral Trustee and the other Secured Parties, whereupon all
rights to the Collateral shall revert to the Person legally entitled thereto,
and the Collateral Trustee shall transfer any remaining
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amounts, together with any interest thereon, on deposit in the Accounts to
the Borrower or as the Borrower may direct.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof and by the other Financing Documents, together with
such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or other Affiliate thereof as if it
were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Majority Lenders and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders or in the absence of
its own gross negligence or wilful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Financing Document, (ii) the
contents of any certificate, report or other document delivered hereunder, under
any other Financing Document or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or in any other Financing Document, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other
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Financing Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein or
in any other Financing Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and in consultation
with the Borrower, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the
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same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 11.3 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Administrative Agent.
The Lenders agree to indemnify the Administrative Agent and each
Related Party of the Administrative Agent (to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts of the Loans
owing to them and Commitments issued by them, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgements,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
such Related Party in any way relating to or arising out of this Agreement or
any other Financing Document or any action taken or omitted by the
Administrative Agent or such Related Party under this Agreement or any other
Financing Document, PROVIDED that no Lender shall be liable to the
Administrative Agent or such Related Party for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgements, suits, costs,
expenses or disbursements resulting from the Administrative Agent's or such
Related Party's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent and each
Related Party of the Administrative Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent or such Related Party in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Administrative Agent or such Related Party is not reimbursed for
such expenses by the Borrower.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Collateral Trustee or any other
Lender and based on such 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
the Administrative Agent, the Collateral Trustee or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE X
THE COLLATERAL TRUSTEE
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SECTION 10.1. APPOINTMENT OF COLLATERAL TRUSTEE. Each of the Lenders
and the other Secured Parties hereby appoints the Collateral Trustee, as
collateral trustee, security agent and representative hereunder and under the
other Financing Documents (together with its permitted successors and assigns)
and authorizes the Collateral Trustee to act as such hereunder and under the
other Financing Documents by and on behalf of each Secured Party. The Collateral
Trustee accepts the trusts created hereunder and under the Security Documents
and agrees to act as agent and fiduciary for the Secured Parties and their
respective successors and assigns upon the express conditions contained in this
Agreement and in the other Financing Documents to the extent provided herein. In
performing its functions and duties under this Agreement and the other Financing
Documents to which it is a party, the Collateral Trustee shall act solely as an
agent of the Secured Parties to the extent, but only to the extent, provided in
this Agreement and the other Financing Documents to which it is a party. The
Collateral Trustee does not assume, and shall not be deemed to have assumed,
hereby or thereby, any obligation towards, or relationship of agency, fiduciary
or trust with or for any other Person, including the Borrower or any Subsidiary
or Shareholder of the Borrower. Further, the Collateral Trustee shall be
released by the Secured Parties from any and all of such trusts and its
responsibilities and obligations whatsoever owed to the Secured Parties under
this Agreement or any other Financing Document with effect upon the termination
of this Agreement and payment in full of all Obligations.
SECTION 10.2. ACTIONS ETC. UNDER FINANCING DOCUMENTS. (a) The
Collateral Trustee shall not be required to exercise any power, discretion or
authority or take any action or actions under this Agreement or any other
Financing Document or with respect to the sale or disposition of the Collateral
unless and until it shall have received Proper Instructions as to how to
exercise any power, discretion or authority or how to take such action or
actions from the Majority Lenders (or the Administrative Agent where specified
in accordance with any Financing Document) (individually the "PROPER PARTY" or
collectively the "PROPER PARTIES"); PROVIDED that the Collateral Trustee shall
(i) be permitted (but not required) to verify the composition of the Majority
Lenders with the Administrative Agent and shall not be required to take any
action or actions until it receives such verification; (ii) not be obligated to
follow any Proper Instructions given by the relevant Proper Party unless the
Collateral Trustee shall have received adequate security or indemnity as
provided in paragraph (j) of this Section; (iii) not, under any circumstances
(other than its own gross negligence or willful misconduct in carrying out such
Proper Instructions, as finally determined by a court of competent
jurisdiction), be liable to any Secured Party or any other Person (including the
Borrower or any Subsidiary or Shareholder of the Borrower) for following the
Proper Instructions of the relevant Proper Party.
(b) Any party giving Proper Instructions shall be entitled to withdraw
or modify such Proper Instructions by delivering written notice of such
withdrawal or modification by way of revised Proper Instructions to the
Collateral Trustee prior to the time when
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the Collateral Trustee exercises any discretion or authority or takes any
action pursuant to the initial Proper Instructions.
(c) Each Secured Party has irrevocably authorized and directed the
Collateral Trustee to execute and deliver this Agreement and hereby irrevocably
authorizes and directs the Collateral Trustee to execute and deliver the other
Financing Documents to which it is a party.
(d) Each Secured Party irrevocably authorizes the Collateral Trustee to
exercise any power, discretion or authority and/or to take such action on the
Secured Parties' behalf and to exercise such powers as are specifically
delegated to or conferred upon the Collateral Trustee by the terms of this
Agreement, the Security Documents and any of the other Financing Documents,
together with such powers as the Collateral Trustee believes in good faith are
reasonably incidental thereto, and acknowledges that the Collateral Trustee is
authorized to disburse amounts in the Accounts in accordance with the Borrower's
certificates given in accordance with the terms of this Agreement without
verifying whether the specified amounts are correctly stated therein.
(e) The Collateral Trustee shall have only those duties, obligations
and responsibilities that are expressly specified in this Agreement, the
Security Documents and any of the other Financing Documents to which it is a
party, and shall not have any implied duties, obligations or responsibilities.
(f) The Collateral Trustee may perform or carry out its duties,
obligations and responsibilities by or through its directors, officers,
employees or agents. Any agent of the Collateral Trustee shall be entitled to be
paid its reasonable professional and other charges for business transacted and
acts done by him or any partner or employee of his in connection with this
Agreement or any of the other Financing Documents, as the case may be.
(g) The Collateral Trustee may, with the prior consent of the
Administrative Agent, which consent shall not be unreasonably withheld, delegate
in any manner to any Person any of the rights and powers vested in this
Agreement, the Security Documents and any of the other Financing Documents to
which it is a party, upon such terms and conditions (including the power to
sub-delegate) as the Collateral Trustee may think fit; PROVIDED that no such
prior consent shall be required in the case of Bermuda Commercial Bank Limited.
(h) The Collateral Trustee may, with the prior consent of the
Administrative Agent, which consent shall not be unreasonably withheld, place
any and all title deeds
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and other documents certifying, representing or constituting the title to any
of the Collateral in its possession in any safe deposit, safe or receptacle
selected by the Collateral Trustee or with any banker or banking company or
company whose business includes undertaking the safe custody of documents.
The Collateral Trustee shall not be responsible for any loss incurred in
connection with any such deposit except for any loss arising out of its own
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction; PROVIDED that no such prior consent shall be required
in the case of Bermuda Commercial Bank Limited.
(i) All moneys received or held by the Collateral Trustee shall be
received, held, disbursed and invested in accordance with the terms of Article
VIII, and, without prejudice to the generality of the foregoing, the Collateral
Trustee may establish accounts in the name or under the control of the
Collateral Trustee at such bank or institution as the Collateral Trustee may
think fit. The Collateral Trustee may at any time vary, exchange, transfer or
transpose any investments made by it pursuant to Article VIII for or into other
investments in accordance with the terms thereof and shall not be responsible
for any loss occasioned thereby, whether by depreciation in value or otherwise.
Any such investment may, at the discretion of the Collateral Trustee, be made or
retained in the names of nominees.
(j) The Collateral Trustee shall be fully entitled and justified in
taking or refusing to exercise any power, discretion or authority or take any
action under this Agreement or any other Financing Document, unless it shall
have received adequate security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities (including, without limitation,
payment in advance of all reasonable estimated advances and out-of-pocket
expenses) which, in the determination of the Collateral Trustee, may be
incurred, suffered or sustained by it (including legal and other professional
fees) in connection therewith or if taking such action (x) would subject the
Collateral Trustee to a tax in any jurisdiction where it is not then subject to
a tax (unless it is fully indemnified for such tax), (y) would require the
Collateral Trustee to qualify to do business in any jurisdiction where it is not
then so qualified, unless the Collateral Trustee receives security or indemnity
reasonably satisfactory to it (including, without limitation, payment in advance
of all reasonable estimated advances and out-of-pocket expenses) against such
tax (or equivalent liability) or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Financing Document to which it is a party, or (z) would
subject the Collateral Trustee to in personam jurisdiction in any location where
it is not then so subject. If any security or indemnity furnished to the
Collateral Trustee for any purpose shall, in the reasonable opinion of the
Collateral Trustee, be insufficient or become impaired, then the Collateral
Trustee shall be entitled to require such additional security or indemnity and
to cease, or not commence, to exercise any discretion or authority or to take
any action under this Agreement or any other Financing Document, as the case may
be, until such time as such additional security or indemnity is furnished.
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(k) Each of the Lenders and the Administrative Agent hereby undertakes
to give Proper Instructions to the Collateral Trustee in a timely manner, so as
to enable the Collateral Trustee to exercise any power, discretion or authority
or take any action within the time periods provided in any of the Financing
Documents and in the event of failure by any such Person to do so, the
Collateral Trustee shall not be responsible for any loss occasioned thereby.
(l) The Collateral Trustee shall exercise those rights and powers
vested in it by this Agreement and the other Financing Documents to which it is
a party using the same degree and care and skill in their exercise as a
reasonably prudent Person would exercise or use under the circumstances in the
conduct of its own affairs.
SECTION 10.3. EXCULPATORY PROVISIONS. (a) The Collateral Trustee shall
not be responsible to any Person in any manner whatsoever for the execution,
effectiveness, genuineness, validity, perfection, ranking, enforceability,
collectibility, value, admissibility or sufficiency of the Collateral, the
Obligations, the Security Documents, or any of the Financing Documents, or the
adequacy or correctness of any recitals, statements, information,
representations or warranties in this Agreement, or any other Financing Document
to which it is a party (other than any statements, representations or warranties
expressly made by the Collateral Trustee) or written or oral statement or in any
financial or other documents, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by or on behalf
of the Borrower to the Collateral Trustee or any Secured Party.
(b) The Collateral Trustee shall not be responsible for insuring the
Collateral or for the payment of Taxes, charges or assessments or discharging of
Liens upon the Collateral or otherwise as to the maintenance or care of the
Collateral, except that if the Collateral Trustee takes possession of any
Collateral, the Collateral Trustee shall use reasonable care in the physical
preservation of the Collateral in its possession.
(c) The Collateral Trustee shall not be required to ascertain or
inquire (i) as to the performance or observance by the Borrower or any
Subsidiary or Shareholder of the Borrower or any of their respective successors
and assigns of any of the terms, conditions, provisions, covenants or agreements
contained in any Financing Document, or (ii) as to the existence or possible
existence of any default or event of default (howsoever described) or the
occurrence of any other event under any Financing Document or Transaction
Document, or whether it is still continuing.
(d) Whenever it is necessary, or in the opinion of the Collateral
Trustee advisable, for the Collateral Trustee to ascertain the amount of the
outstanding Commitments or Obligations, the Collateral Trustee may rely on
Proper Instructions of the Administrative Agent containing such information.
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(e) Notwithstanding any other provision of this Agreement, the
Collateral Trustee shall not, in its individual capacity, be personally liable
for any power, discretion or authority exercised or action taken or omitted to
be taken by it in accordance with the terms hereof, or of any other Financing
Document to which it is a party except for its own gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction.
(f) The Collateral Trustee and each of its Affiliates shall have the
same rights with respect to any Obligation held by it as any Secured Party and
may exercise such rights as though it were not the Collateral Trustee hereunder,
and may accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial, advisory or other business with the Borrower and each
of its Affiliates as if it were not the Collateral Trustee.
SECTION 10.4. RELIANCE BY COLLATERAL TRUSTEE. (a) Whenever in the
administration of this Agreement, the Security Documents or any other Financing
Document to which it is a party, the Collateral Trustee shall deem it necessary
or desirable that any Collateral received by the Collateral Trustee is in a form
acceptable to the Secured Parties or that a factual matter be proved or
established in connection with the Collateral Trustee taking, suffering or
omitting the exercise of any power, discretion or authority or any action under
this Agreement or any of the Financing Documents, such matter (unless other
evidence in respect thereof is prescribed herein or in any other Financing
Document to which it is a party) may be deemed to be conclusively proved or
established by Proper Instructions from the Proper Parties, delivered to the
Collateral Trustee, and such Proper Instructions shall be full warrant and
protection to the Collateral Trustee for any power, discretion, authority or
action taken, suffered or omitted in reliance thereon and the Collateral Trustee
shall not be responsible for any loss occasioned thereby.
(b) The Collateral Trustee may consult with counsel, accountants or
other experts, and any opinion of counsel or opinion of accountants or other
experts shall be full and complete authorization and protection in respect of
the exercise of any power, discretion or authority of the exercise of any power,
discretion or authority or any action taken or suffered by the Collateral
Trustee hereunder or under any other Financing Document to which it is a party
(including any concern on the Collateral Trustee's part as to the composition of
the Proper Parties at any time) or in accordance herewith or therewith and the
Collateral Trustee shall not be responsible for any loss occasioned by so
acting. The Collateral Trustee shall also have the right at any time to seek
instructions concerning the administration of this Agreement and any other
Financing Document to which it is a party (including any concern on the
Collateral Trustee's part as to the composition of the Proper Parties at any
time) from any court of competent jurisdiction and to receive in advance thereof
adequate security or indemnity against
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the costs and expenses and liabilities which may be incurred by it in
connection with such court proceedings in accordance with the provisions of
Section 10.2(j).
(c) The Collateral Trustee may rely, and shall be fully protected and
indemnified hereunder in acting, upon any instruction, resolution, statement,
certificate, instrument, opinion, report, notice request, consent, order, bond
or other paper or document which, in the absence of its gross negligence or
willful misconduct, as finally determined by a court of competent jurisdiction,
it believes to be genuine and to have been signed or presented by the respective
person or persons from time to time authorized by each of the Proper Parties, to
sign or present on its behalf, and identified by specimen signatures previously
distributed to the Collateral Trustee or, in the case of cables, telecopies and
telexes, to have been sent by such authorized person or persons (collectively
the "PROPER INSTRUCTIONS"). The Collateral Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed in
Proper Instructions and upon any such document or communication furnished to the
Collateral Trustee and conforming to the requirements of this Agreement or any
other Financing Document to which it is a party or, if not so conforming as
approved by Proper Instructions of the Proper Party and the Collateral Trustee
shall be in no way bound to call for further evidence or be responsible for any
loss which may be occasioned by acting on any such Proper Instructions. Without
limiting the foregoing, if the Collateral Trustee is unsure whether or not a
person or persons is authorized to issue Proper Instructions, the Collateral
Trustee shall always be entitled to rely and shall be fully protected in relying
upon a certificate of the Administrative Agent confirming the authority of such
Person or Persons.
(d) If the Collateral Trustee shall at any time request further Proper
Instructions from a Proper Party with respect to the exercise of any power,
discretion, authority or any act or action to be taken or omitted in connection
with this Agreement or any other Financing Document in respect of which the
Collateral Trustee has previously received Proper Instructions from such Proper
Party, the Collateral Trustee shall not be required to exercise any power,
discretion or authority or take or omit to take such action unless and until it
shall have received such further Proper Instructions as the Collateral Trustee
shall deem appropriate in respect thereof.
(e) If the Collateral Trustee shall have received Proper Instructions
from the Proper Party it shall exercise any power, discretion or authority or
take or omit to take any action as directed therein, and shall not be obliged to
verify that such Proper Instructions comply with the terms of any of the
Financing Documents, and (subject to such compliance) the Collateral Trustee
shall not be responsible for any loss occasioned thereby.
(f) Notwithstanding anything to the contrary in this Agreement or the
Financing Documents, the Collateral Trustee shall not be deemed to have any
notice or
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knowledge of:
(i) any Default or the occurrence of any other event unless
and until it shall have received Proper Instructions thereof from a
Proper Party (or the Administrative Agent describing such Default or
other event in reasonable detail (including the date or, if not known,
the estimated date of the occurrence of the relevant Default or other
event) and stating whether it is still continuing; or
(ii) the contents or the performance by any party thereto of
any provision of any of the Financing Documents unless it shall have
been specifically informed thereof by way of Proper Instructions from a
Proper Party (or the Administrative Agent) which describes such
contents or performance in reasonable detail to the Collateral
Trustee's satisfaction.
SECTION 10.5. SUPPLEMENTAL PROVISIONS RELATING TO THE COLLATERAL
TRUSTEE. By way of supplement to the rights and powers conferred by Trustee Xxx
0000 of Bermuda, as amended, and by general law it is expressly declared as
follows:
(a) The Collateral Trustee may refrain from doing anything which would
or might in its reasonable opinion be contrary to any law, directive or
regulation of any state or which would or might otherwise render it liable to
any person and may do anything which it determines, in its absolute discretion,
is necessary to comply with any such law, directive or regulation;
(b) The Collateral Trustee shall not be liable for any failure,
omission or defect in perfecting the security created by or pursuant to the
Security Documents, including, without prejudice to the generality of the
foregoing (i) failure to obtain any license, consent or other authority for the
execution, delivery, validity, legality, adequacy, performance, enforceability
or admissibility in evidence of any Financing Document and (ii) failure to
effect or procure registration of or otherwise protect any of the security
created by the Security Documents by registering under any applicable
registration laws in any territory or by any notice, caution, filing,
registration laws in any territory or by any notice, caution, filing,
registration or other entry prescribed by or pursuant to the provisions of the
said laws;
(c) The Collateral Trustee may accept without inquiry, requisition,
objection or investigation such title as the Borrower or any other Person may
have to that part of the Collateral belonging to it (or any part thereof) which
is the subject matter of the Security Documents, and shall not be liable for any
failure or omission to ascertain or investigate the title of the Borrower or any
other Person to any Collateral now or at any time hereafter subject or
purporting to be subject to any security created by or pursuant to the Security
Documents; and
(d) The Collateral Trustee shall, for the purposes of this Agreement
and the
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Security Documents, have full power to determine all questions and doubts
arising in relation to any provisions of any Security Document, and, save for
manifest error, every such determination (whether made upon a question
actually raised or implied in the acts or proceedings of the Collateral
Trustee) shall be conclusive and shall bind the Secured Parties and the other
Persons who are parties thereto.
SECTION 10.6. LIMITATIONS AND DUTIES OF COLLATERAL TRUSTEE. No
provision of this Agreement or any other Financing Document to which it is a
party shall be deemed to impose any duty or obligation on the Collateral Trustee
to exercise any power, discretion or authority or to perform any act or acts
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or
in which the Collateral Trustee shall be legally unqualified or incompetent, to
perform any such act or acts or to exercise any such right, power, duty or
obligation or if such performance or exercise would constitute doing business by
the Collateral Trustee in such jurisdiction or would impose a tax on the
Collateral Trustee by reason thereof.
SECTION 10.7. PROCEEDS TO BE HELD IN TRUST. All proceeds received by
the Collateral Trustee under or pursuant to any provision of this Agreement or
any other Financing Document to which it is a party (except where made by way of
payment, reimbursement or indemnification of the fees, costs and expenses of the
Collateral Trustee or its counsel or agents) shall be held in trust for the
exclusive benefit of the Secured Parties, and placed on deposit in accordance
with Article VIII.
SECTION 10.8. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE. (a)
The Collateral Trustee may at any time, by giving 30 days' prior written notice
to the Administrative Agent, resign and be fully discharged from the duties,
obligations and responsibilities created by this Agreement or any of the other
Financing Documents, such resignation to become effective upon the appointment
of a successor Collateral Trustee by the Administrative Agent after consultation
with the Borrower. If no successor Collateral Trustee shall be appointed and
shall have accepted such appointment within 90 days after the Collateral Trustee
gives the aforesaid notice of resignation, the Collateral Trustee or any Secured
Party may apply to any court of competent jurisdiction to appoint a successor
Collateral Trustee to act until such time, if any, as a successor Collateral
Trustee shall have been appointed as provided in this Section and shall have
accepted such appointment. Any successor Collateral Trustee so appointed by such
court shall immediately and without further act be superseded by any successor
Collateral Trustee appointed as provided in this Section. The Secured Parties
shall, if so requested by the Collateral Trustee, execute a Deed of Release and
Retirement containing an adequate indemnity in form and substance satisfactory
to the Collateral Trustee.
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(b) The Majority Lenders may remove the Collateral Trustee and upon the
appointment of a successor Collateral Trustee and acceptance of such appointment
by such successor, the Collateral Trustee shall be discharged from the duties,
obligations and responsibilities created by this Agreement or any other
Financing Document. Any Collateral Trustee shall be entitled to payment or
reimbursement of fees, costs and expenses (including those of its counsel and
agents) to the extent incurred or arising, or relating to events occurring,
before such resignation or removal. The Lenders shall, if so requested by the
Collateral Trustee, execute a Deed of Release and Retirement containing an
adequate indemnity in form and substance satisfactory to the Collateral Trustee.
(c) If at any time the Collateral Trustee shall resign or be removed or
otherwise become incapable of acting, the powers, duties, authority and title of
such Collateral Trustee shall be terminated and cancelled without procuring its
resignation and without any formality (except as may be required by Applicable
Law) other than the appointment and designation of a successor Collateral
Trustee in writing duly acknowledged and delivered to the predecessor Collateral
Trustee and the Administrative Agent. Such appointment and designation shall be
full evidence of the right and authority to make the same and of all the facts
therein recited, and recited in this Agreement and the other Financing
Documents, and shall vest in such successor Collateral Trustee, without any
further act, deed or conveyance, all the estates, properties, rights, powers,
trusts, duties, authority and title of its predecessor Collateral Trustee; but
such predecessor Collateral Trustee shall, nevertheless, on the written request
of the Administrative Agent or the successor Collateral Trustee execute and
deliver an instrument transferring to such successor Collateral Trustee all the
estates, properties, rights, powers, trusts, duties, authority and title of such
predecessor Collateral Trustee hereunder and shall deliver all Collateral held
by it or him or its or his agents to such successor Collateral Trustee. The
Secured Parties shall, if so requested by the Collateral Trustee, execute a Deed
of Release and Retirement containing an adequate indemnity in form and substance
satisfactory to the Collateral Trustee.
SECTION 10.9. STATUS OF SUCCESSOR COLLATERAL TRUSTEE. Every successor
Collateral Trustee appointed pursuant to Section 10.8 shall be a bank or trust
company in good standing and having power to act as Collateral Trustee
hereunder, incorporated under the laws of Bermuda and having its principal
corporate trust office in Bermuda and shall, if required by the Secured Parties,
have capital, surplus and undivided profits of not less than $50,000,000, if
there be such an institution with such capital, surplus and undivided profits
willing, qualified and able to accept the trust hereunder upon reasonable or
customary terms.
SECTION 10.10. MERGER OF THE COLLATERAL TRUSTEE. Any corporation into
which the Collateral Trustee may be merged, or with which it may be
consolidated, or any
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corporation resulting from any merger or consolidation to which the
Collateral Trustee shall be a party, shall be Collateral Trustee under this
Agreement and any other Financing Document to which it is a party, without
the execution or filing of any paper or any further act on the part of the
parties hereto.
SECTION 10.11. APPOINTMENT OF SEPARATE OR CO-COLLATERAL TRUSTEE. (a)
The Collateral Trustee may, and upon instructions of the Majority Lenders shall,
by an instrument in writing delivered to each Secured Party, appoint a bank or
trust company or an individual to act as separate trustee or co-trustee with
respect to any Financing Document to which it is a party in any jurisdiction
where the Collateral Trustee is disqualified from acting or for any other
purpose deemed by the Collateral Trustee or by the Majority Lenders to be
necessary to the interests of the Secured Parties, such separate trustee or
co-trustee to exercise only such rights and to have only such duties as shall be
specified in the instrument of appointment (which rights and duties shall not
exceed the rights or duties of the Collateral Trustee set forth herein and which
rights shall be exercised and duties shall be performed only as expressly set
forth in such instrument or as set forth in written instructions from the
Collateral Trustee). Each party hereto by its execution or other acceptance of
the terms hereof agrees to the appointment of any such separate trustee or
co-trustee. If requested by the Collateral Trustee, such separate trustee or
co-trustee or the Majority Lenders, each party hereto affected thereby will
enter into an amendment to this Agreement, satisfactory in form and substance to
the Collateral Trustee, such separate trustee or co-trustee or the Majority
Lenders, confirming the rights and duties of such separate trustee or
co-trustee.
(b) The Collateral Trustee or the Majority Lenders may at any time, by
an instrument in writing, accept the resignation of or remove any such separate
trustee or co-trustee and may, by an instrument in writing, appoint a successor
to any such separate trustee or co-trustee, so removed, reasonably satisfactory
to the Majority Lenders.
(c) Wherever there shall be more than two collateral trustees hereof,
the majority of such collateral trustees shall be competent to execute and
exercise all the duties, powers, trusts, authorities and discretions vested in
the Collateral Trustee by this Agreement and the other Financing Documents.
SECTION 10.12. TREATMENT OF PAYEE OR INDORSEE BY COLLATERAL TRUSTEE;
REPRESENTATIVES OF SECURED PARTIES. (a) The Collateral Trustee may treat the
registered holder or, if none, the payee or indorsee of any promissory note or
debenture or similar instrument evidencing an Obligation as the absolute owner
thereof for all purposes and shall not be affected by any notice to the
contrary, whether such promissory note or debenture or similar instrument shall
be past due or not.
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(b) Any Person (other than the Administrative Agent) which shall be
designated as the duly authorized representative of one or more Secured Parties
to act as such in connection with any matters pertaining to this Agreement or
any other Financing Document to which the Collateral Trustee is a party or to
the Collateral shall present to the Collateral Trustee such documents,
including, without limitation, opinions of counsel, as the Collateral Trustee
may reasonably require, in order to demonstrate to the Collateral Trustee the
authority of such Person to act as the representative of (other than the
Administrative Agent) such Secured Party.
SECTION 10.13. INDEMNIFICATION; FEES. (a) Without limitation of the
liabilities of the Borrower under Section 11.3, and to the extent not
reimbursed or paid by the Borrower, the Lenders severally agree, based upon
their respective Commitments (or if the Commitments are no longer in effect,
based upon their respective percentage of the outstanding Loans) in effect on
the date indemnification is sought under this Section, to (i) pay or cause to
be paid, upon demand or as may otherwise be agreed with the Collateral
Trustee, to the Collateral Trustee or any separate trustee or co-trustee
appointed pursuant to Section 10.11, reasonable compensation for its services
hereunder and under the other Financing Documents to which it is a party,
(ii) pay in advance all fees and reasonable out-of pocket expenses required
by the Collateral Trustee, (iii) reimburse, or cause to be reimbursed, to the
Collateral Trustee on demand for any costs or expenses incurred by the
Collateral Trustee, including counsel fees and compensation of agents on a
full indemnity basis, arising out of, in any way connected with, or as a
result of, the execution or delivery of this Agreement or any other Financing
Document to which it is a party, or any agreement or instrument contemplated
hereby or thereby or the performance by the parties thereto of their
respective obligations hereunder or thereunder or in connection with the
enforcement or protection of the rights of the Collateral Trustee and the
Secured Parties under the Financing Documents to which the Collateral Trustee
is a party or as regards the resignation of the Collateral Trustee pursuant
to Section 10.8(a) and (iv) indemnify and hold harmless the Collateral
Trustee, and its directors, officers, employees, agents and delegates, on
demand, 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 the Collateral Trustee in any way relating to
or arising out of this Agreement or any other Financing Document to which the
Collateral Trustee is a party, or any action taken or omitted by them under
this Agreement or any other Financing Documents to which the Collateral
Trustee is a party, in each case to the extent not theretofore reimbursed or
paid by the Borrower; PROVIDED that no other Secured Party shall be liable to
the Collateral Trustee for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements
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resulting from the gross negligence or wilful misconduct of the
Collateral Trustee or any of its directors, officers, employees or agents, as
finally determined by a court of competent jurisdiction. The indemnities
contained in this Section shall survive the termination of this Agreement.
Any payment made by any Secured Party under this Section with respect to any
obligation of the Borrower under Section 11.3 of this Agreement shall be
deemed to be Obligations of the Borrower under this Agreement.
(b) Without limitation of the liabilities of the Borrower under Section
11.3, and to the extent not paid by the Borrower in accordance with the terms of
Section 11.3, the Lenders hereby severally agree to pay to the Collateral
Trustee, ratably, the fees payable to the Collateral Trustee from time to time
for its services hereunder.
SECTION 10.14. REPRESENTATION AND WARRANTIES OF THE COLLATERAL TRUSTEE.
The Collateral Trustee represents and warrants in its individual capacity to
each Secured Party that:
(a) the Collateral Trustee is a licensed trust company in Bermuda and
the wholly owned subsidiary of a banking association duly organized under the
laws of Bermuda, and has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement and each other Financing
Document to which it is or is to become a party;
(b) the execution, delivery and performance by the Collateral Trustee
of this Agreement and each other Financing Document to which it is or is to
become a party have been duly and validly authorized by all necessary corporate
action on the part of the Collateral Trustee;
(c) neither the execution and delivery by the Collateral Trustee of
this Agreement and each other Financing Document to which it is or is to become
a party nor the consummation of the transactions contemplated hereby or thereby,
nor the compliance by the Collateral Trustee with any of the respective terms or
provisions hereof or thereof, nor the performance by the Collateral Trustee of
its obligations hereunder or thereunder will contravene the charter or by-laws
of the Collateral Trustee or any law, judgment, rule, regulation or order of
Bermuda regulating the trust business of the Collateral Trustee or otherwise
binding on or applicable to the Collateral Trustee;
(d) no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental or public body or authority of
Bermuda is required in connection with the execution and delivery by the
Collateral Trustee of this Agreement or any other Financing Document to which it
is or is to become a party or in connection with the performance by it of its
duties hereunder or thereunder (other than any recordation, filing or other
action that may be required to perfect a Lien purported to be created by any
Security Document); and
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(e) this Agreement has been duly executed and delivered by two duly
authorized officers of the International Trust Company of Bermuda Limited and
constitutes the legal, valid and binding obligation of the International Trust
Company of Bermuda Limited in accordance with its terms, and each other
Financing Document to which the Collateral Trustee is or is to become a party
has been (or upon its execution will be) duly executed and delivered by a duly
authorized officer of the Collateral Trustee and constitutes (or will
constitute) the legal, valid and binding obligation of the Collateral Trustee in
accordance with their respective terms (assuming the due authorization,
execution and delivery of each of the Financing Documents by each of the parties
thereto other than the Collateral Trustee and that such other documents
constitute legal, valid and binding obligations of each of the parties thereto
other than the Collateral Trustee).
SECTION 10.15. RELEASE OF COLLATERAL. Upon the Administrative
Agent giving the Collateral Trustee written notice of the payment and
satisfaction in full of all Obligations and the termination of the Revolving
Credit Commitments, the Collateral Trustee shall, at the sole expense of the
Borrower, execute such statements as are reasonably necessary to release the
Collateral from the Liens created by the Security Documents.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. NOTICES. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be given in
person or by means of telex, telecopy (promptly followed by delivery in person,
by mail or by courier in the case of a notice of Default) or other wire
transmission, or mailed by registered or certified mail, or sent by courier, in
each case addressed as follows (or to such other address as may be hereafter
notified by the respective parties from time to time parties hereto in
accordance with the terms of this Section):
(a) if to the Borrower, to it at 00 Xxx-xx-Xxxxx Xxxx,
Xxxxxxxx XX 00, Xxxxxxx, Xxxxxxxxx: Treasurer (Telecopy No.
441-296-0938);
(b) if to the Collateral Trustee, to it at 00 Xxxxxx Xxxxxx,
Xxxxxxxx XX XX, Xxxxxxx, Xxxxxxxxx: General Manager (Telecopy No.
441-292-6128);
(c) if to the Administrative Agent, to it at 000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: Xxxxx Xxxxxx (Telecopy No.
212-412-7511); and
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(d) if to any Lender, to it at its address (or telecopy
number) set forth on Schedule 2.1.
Any such communication shall become effective when delivered by hand, or three
days after being deposited in the mail, first class postage prepaid, or, in the
case of a nationally or internationally recognized overnight courier service,
one Business Day after delivery to such courier service, or, in the case of
transmission by telecopier, when confirmation of receipt is obtained, or, in the
case of telex notice, when sent, answerback received.
SECTION 11.2. WAIVERS; AMENDMENTS. (a) No failure or delay by any party
in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Collateral Trustee and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Financing Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, the Collateral Trustee or any Lender may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Financing Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Majority Lenders or by the Borrower and the
Administrative Agent with the consent of the Majority Lenders (unless expressly
provided otherwise in this Agreement), (ii) in the case of the Borrower Security
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Majority Lenders or by the Borrower and the Collateral Trustee
with the consent of the Majority Lenders (unless expressly provided otherwise in
the Borrower Security Agreement), (iii) in the case of any other Security
Document, pursuant to an agreement or agreements in writing entered into by the
Collateral Trustee (with the consent of the Majority Lenders, unless expressly
provided otherwise in such Security Document) and each other Person party
thereto or (iv) in the case of any other Financing Document, pursuant to an
agreement or agreements in writing entered into by the Administrative
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Agent (with the consent of the Majority Lenders, unless expressly provided
otherwise in such other Financing Document) and each other person party
thereto; PROVIDED that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.16(b)
or (c), without the written consent of each Lender, (v) release all or
substantially all of the Collateral without the consent of each Lender, or
(vi) change any of the provisions of this Section or the definition of
"Majority Lenders" or any other provision hereof specifying the number or
percentage of Lenders (or Lenders of any Class) required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder without the written consent of each Lender (or each Lender of such
Class, as the case may be); PROVIDED, FURTHER, that (A) no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent, (B) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Collateral Trustee hereunder without the
prior written consent of the Collateral Trustee, and (C) any waiver,
amendment or modification of this Agreement that by its terms affects the
rights or duties under this Agreement of the Revolving Credit Lenders (but
not the Term Lenders) or the Term Lenders (but not the Revolving Credit
Lenders) may be effected by an agreement or agreements in writing entered
into by the Borrower and requisite percentage in interest of the affected
Class of Lenders.
SECTION 11.3. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Arranger, the Collateral Trustee and their respective
Affiliates, including the reasonable fees, charges and disbursements of the
Collateral Trustee and counsel for the Administrative Agent and the Collateral
Trustee and the reasonable fees, charges and disbursements of the Marketing
Consultant and the Independent Engineer, in connection with the syndication of
the credit facilities provided for herein (including the costs in respect of
preparing and copying one set of closing binders for each Lender), the
preparation and administration of this Agreement and the other Financing
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated) and (ii) all out-of-pocket expenses incurred by the
Administrative Agent, the Arranger, the Collateral Trustee or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Arranger, the Collateral Trustee or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement or any other Financing Document, including its rights
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under this Section, or in connection with the Loans made hereunder, the
Project Documents, or any other instrument or agreement entered into by the
Borrower in connection herewith or therewith, including in connection with
any workout, restructuring or negotiations in respect thereof.
(b) The Borrower further agrees to pay, indemnify and hold each Lender,
the Collateral Trustee, the Administrative Agent and the Arranger harmless from
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying stamp, excise or other similar taxes,
if any, which may be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under in
respect of, this Agreement or the other Financing Documents.
(c) The Borrower shall indemnify the Administrative Agent, the
Arranger, the Collateral Trustee and each Lender, and each Related Party of any
of the foregoing Persons (each such Person being called an "INDEMNITEE")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Financing
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby, (ii) any
Loan or the use of the proceeds therefrom, (iii) in any way relating to or
arising out of the Project, or the manufacture, financing, construction,
purchase, acceptance, rejection, ownership, acquisition, delivery, nondelivery,
preparation, installation, storage, maintenance, repair, transfer of title,
abandonment, possession, rental, use, operation, maintenance, environmental
clean-up, condition, sale, return, importation, exportation or other application
or disposition of all or any part of any interest in the Project, or (iv)
resulting from any and all liability of or relating to the Borrower or the
Project, whether contingent or fixed, actual or potential, known or unknown,
which arise under or relate to matters covered by Environmental Laws, including,
without limitation, resulting from the violation of any Environmental Law,
off-site disposal of wastes or the existence or Release of any Hazardous
Materials at the Project or any other property of the Borrower (including,
without limitation, clean-up costs, response costs, costs of corrective action
and natural resources damages); PROVIDED that such indemnity shall not, as to
any Indemnitee, be available (i) to the extent that such losses, claims,
damages, liabilities or related expenses are a result of the gross negligence or
wilful misconduct of such Indemnitee or are a result of the representations and
warranties or undertakings made by such Indemnitee to its assignees hereunder or
(ii) to compensate such Indemnitee for any injury to the personnel of such
Indemnitee if such injury is not a result of the negligence of the Borrower.
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(d) Each Indemnitee claiming any right to indemnity under paragraph (c)
of this Section by reason of the making of any claim or the institution of any
action against such Indemnitee shall promptly notify the Borrower thereof (and
shall notify the Borrower of any other loss, damage or liability that it has
suffered and intends to seek indemnification therefor hereunder promptly after
acquiring knowledge thereof) and shall consult with the Borrower from time to
time in connection with the defense of such claim or action and shall not settle
any such claim or action (x) before giving the Borrower notice thereof and the
Borrower the opportunity to assume the defense thereof (if entitled hereunder)
or (y) without the prior written consent of the Borrower, which shall not be
unreasonably withheld, if the Borrower is not entitled to assume the defense as
a result of clause (ii) or (iii) of the succeeding sentence. The Borrower shall
be entitled, at its expense, to assume the defense of such claim or action or to
participate in such action with counsel of its choice (which counsel shall be
reasonably satisfactory to such Indemnitee if the Borrower elects to assume the
defense) and at its expense, PROVIDED that the Borrower may not assume the
defense if (i) such Indemnitee determines, on the reasonable advice of counsel,
that representation of both the Borrower and such Indemnitee by the Borrower's
counsel would present such counsel with a conflict of interest, (ii) the
defendants in, or targets of, any such action include both such Indemnitee and
the Borrower, and such Indemnitee shall have concluded, on reasonable advice of
counsel, that there may be legal defenses available to it which are different
from or additional to those available to the Borrower, (iii) the Borrower shall
not have employed counsel satisfactory to such Indemnitee to represent such
Indemnitee within a reasonable time after notice of the institution of any such
action, or (iv) such Indemnitee is faced with potential criminal liability.
(e) To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent or the Arranger under paragraph (a),
(b) or (c) of this Section, each Lender severally agrees to pay to the
Collateral Trustee, the Administrative Agent or the Arranger, as the case may
be, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; PROVIDED that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Collateral Trustee, the Administrative Agent or the
Arranger in its capacity as such.
(f) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 11.4. SUCCESSORS AND ASSIGNS; CONSENT AND AGREEMENT. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations
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hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of the Lenders, the Collateral
Trustee, the Administrative Agent and the Arranger) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more assignees (other
than to the Borrower, any Subsidiary or Shareholder of the Borrower or any of
their respective Affiliates) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it) and the other Financing Documents; PROVIDED that (i)
except in the case of an assignment to a Lender, an Affiliate of any Lender or
an Approved Fund, no such assignment shall be permitted without the prior
written consent of the Administrative Agent and, so long as no Default or Event
of Default shall have occurred and be continuing, the Borrower, (ii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund or an assignment of the entire remaining amount of the assigning Lender's
Commitments, the amount of each Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consents, and (iii) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance for its
acceptance and recording in the Register, together with a processing and
recordation fee of $3,500 (which shall be paid by the assignor and/or assignee
but not the Borrower). Upon acceptance and recording pursuant to paragraph (d)
of this Section, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 11.3). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the
152
names and addresses of the Lenders and the registered owner(s) of any
obligation evidenced by a Note, and the Commitment of, and principal amount
of the Loans owing to, each Lender pursuant to the terms hereof from time to
time (the "REGISTER"). The Notes and the obligations evidenced thereby may be
assigned or otherwise transferred in whole or in part only by registration in
the Register and the Note evidencing the same shall be registered on the
Register only upon surrender for registration of assignment or transfer of
the Note evidencing such obligation, duly endorsed by (or accompanied by a
written instrument of assignment or transfer duly executed by) the registered
owner thereof, and thereupon one or more new Note(s) in the same aggregate
principal amount shall be issued to the designated assignee(s) and the old
Notes shall be returned by the Administrative Agent to the Borrower marked
"canceled". No assignment of any Note or obligation evidenced thereby shall
be effective unless it has been recorded in the Register as provided in this
Section 11.4(c). The entries in the Register shall be conclusive, and the
Borrower, the Collateral Trustee, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); PROVIDED that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Collateral Trustee, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and
2.15 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.13, 2.14 or 2.15 than the applicable Lender would have been
entitled to
153
receive with respect to the participation sold to such Participant. A
Participant shall not be entitled to the benefits of Section 2.15 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with the
provisions of Section 2.15(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or assignment to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or assignment of a security
interest; PROVIDED that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
SECTION 11.5. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 11.3 and
Articles IX and X shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of
the Loans, the expiration or termination of the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 11.6. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent, the Arranger or a Related Party constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.1, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and, subject to and in accordance with Section 11.4, their respective successors
and assigns. Delivery of an executed counterpart of a signature page of this
Agreement by
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telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 11.7. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.8. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized 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 against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 11.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK, EXCEPT THAT THE PROVISIONS OF ARTICLE X
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF BERMUDA.
(b) THE BORROWER HEREBY 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 FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY 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 OF
THE PARTIES HERETO 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. NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT THE COLLATERAL TRUSTEE, THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY OTHERWISE
155
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY 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 IN ANY COURT REFERRED TO IN
PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO 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.
(d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.1. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
(e) THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY APPOINTS C.T.
CORPORATION SYSTEM (THE "NEW YORK PROCESS AGENT"), WITH AN OFFICE ON THE CLOSING
DATE AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT TO RECEIVE ON
BEHALF OF THE BORROWER AND ITS RESPECTIVE PROPERTY SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH NEW YORK STATE OR FEDERAL COURT AND AGREES
PROMPTLY TO APPOINT A SUCCESSOR NEW YORK PROCESS AGENT IN THE CITY OF NEW YORK
(WHICH SUCCESSOR PROCESS AGENT SHALL ACCEPT SUCH APPOINTMENT IN A WRITING
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT PRIOR TO THE TERMINATION FOR
ANY REASON OF THE APPOINTMENT OF THE INITIAL NEW YORK PROCESS AGENT). IN ANY
SUCH ACTION OR PROCEEDING IN SUCH NEW YORK STATE OR FEDERAL COURT SITTING IN THE
CITY OF NEW YORK, SUCH SERVICE MAY BE MADE ON THE BORROWER BY DELIVERING A COPY
OF SUCH PROCESS TO THE BORROWER IN CARE OF THE APPROPRIATE PROCESS AGENT AT SUCH
PROCESS AGENT'S ABOVE ADDRESS AND BY DEPOSITING A COPY OF SUCH PROCESS IN THE
MAILS BY CERTIFIED OR REGISTERED AIR MAIL, ADDRESSED TO THE BORROWER AT ITS
ADDRESS REFERRED TO IN SECTION 11.1 (SUCH SERVICE TO BE EFFECTIVE UPON SUCH
RECEIPT BY THE APPROPRIATE
156
PROCESS AGENT AND THE DEPOSITING OF SUCH PROCESS IN THE MAILS AS AFORESAID).
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY AUTHORIZES AND DIRECTS
SUCH PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATE
METHOD OF SERVICE, THE BORROWER ALSO IRREVOCABLY AND UNCONDITIONALLY CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING IN
SUCH NEW YORK STATE OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK BY MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER BY
CERTIFIED OR REGISTERED AIR MAIL AT ITS ADDRESS REFERRED TO IN SECTION 11.1.
SECTION 11.10. WAIVER OF SOVEREIGN IMMUNITY. (a) To the extent that the
Borrower has or hereafter may acquire any immunity (sovereign or otherwise) from
any legal action, suit or proceeding, from jurisdiction of any court or from
set-off or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) with respect to itself or any of its property, whether or not held
for its own account, the Borrower hereby irrevocably and unconditionally waives
and agrees not to plead or claim such immunity in respect of its obligations
under this Agreement, the Notes and the other Financing Documents.
(b) The Borrower hereby agrees that the waivers set forth in this
Section shall have the fullest extent permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable and not subject to withdrawal for purposes of such Act.
SECTION 11.11. JUDGMENT CURRENCY. The obligation of the Borrower under
this Agreement and any other Financing Document to make payments in Dollars
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any other currency except to the extent
that such tender or recovery results in the effective receipt by the Collateral
Trustee, the Administrative Agent, the Arranger or the Lenders, as the case may
be, of the full amount of Dollars payable under this Agreement and any of the
other Financing Documents and the Borrower shall indemnify the Collateral
Trustee, the Administrative Agent, the Arranger and the Lenders (and such
Persons shall have an additional legal claim) for any difference between such
full amount and the amount effectively received by the Collateral Trustee, the
Administrative Agent, the Arranger or the Lenders, as the case may be, pursuant
to any such tender or recovery. The Administrative Agent's determination of
amounts effectively received by the Lenders shall be conclusive absent manifest
error.
SECTION 11.12. DAMAGE WAIVER. To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as
157
opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any Financing Document or any agreement or
instrument contemplated hereby or thereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof.
SECTION 11.13. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 11.14. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 11.15. REPLACEMENT OF INDEPENDENT ENGINEER. Any appointment by
the Administrative Agent of a replacement engineer to act as the "Independent
Engineer" under the Financing Documents and the Project Documents shall be
subject to the approval of the Borrower, such approval not to be unreasonably
withheld or delayed.
SECTION 11.16. CONFIDENTIALITY. Notwithstanding anything to the
contrary contained in this Agreement or any other Financing Document, each of
the parties hereto agrees, and each successor or assignee thereof, by becoming a
party hereto, shall be deemed to have agreed, to keep confidential (and to cause
its officers, directors, employees, agents, representatives and affiliates to
keep confidential) any information which is obtained pursuant to the terms of
this Agreement or the other Financing Documents and is marked "confidential"
(collectively, the "CONFIDENTIAL MATERIALS"), except that each such party shall
be permitted to disclose the Confidential Materials (a) to its officers,
directors, employees, agents, representatives and Affiliates, (b) to its
attorneys, accountants and financial, insurance and other independent advisors
who have a need for such information (provided such persons are informed of the
confidential nature of the Confidential Materials and the restrictions imposed
by this Section), (c) to the extent required by Applicable Law (including,
without limitation, in making filings with any Governmental Authority and
disclosures by the Lenders to bank or securities examiners and regulatory
officials upon their request or demand), (d) in response to any subpoena or
other legal process (in which event such party shall promptly notify the
Borrower in advance of any such requirement), (e) to the extent such
Confidential Materials become publicly available other than a result of a breach
of the provisions of this Section, (f) to the extent the Borrower shall have
consented to such disclosure in writing and (g) to any Lender's assignee or any
proposed assignee
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or participant of a Lender which agrees in writing to be bound by the terms
of this Section as if it were a Lender party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FLAG LIMITED
By: /s/ Xxxxxx XxXxxxxxx
--------------------------------
Name: Xxxxxx XxXxxxxxx
Title: Chief Financial Officer
INTERNATIONAL TRUST COMPANY OF
BERMUDA LIMITED, as Collateral Trustee
By: /s/ Name of Signatory
--------------------------------
Name: Name of Signatory
Title: General Manager
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Trust Manager
BARCLAYS BANK PLC, as Administrative
Agent, a Term Lender and a Revolving
Credit Lender
By: /s/ Xxxxxxx X. Wayenne
--------------------------------
Name: Xxxxxxx X. Wayenne
Title: Director
By: /s/ L. Xxxxx Xxxxxx
--------------------------------
Name: L. Xxxxx Xxxxxx
Title: Associate Director
- Signature Page -
GULF INTERNATIONAL BANK B.S.C., as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
By: /s/ Abdel-Fattah Tahoun
--------------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
- Signature Page -
DRESDNER BANK AG, New York and Grand
Cayman Branches, as a Term Lender and a
Revolving Credit Lender
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Treasurer
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
- Signature Page -
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC., as a Term Lender
By: /s/ Xxxx Xxxxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxx Xxxxxxxx
Title: Authorized Signatory
- Signature Page -
BANK BRUSSELS XXXXXXX, NEW YORK
BRANCH, as a Term Lender and a Revolving
Credit Lender
By: /s/ Xxx Xxxxxxxx
--------------------------------
Name: Xxx Xxxxxxxx
Title: Senior Vice President
By: /s/ D. Vangaever
--------------------------------
Name: Dominiek H. J. Vangaever
Title: Senior Vice President-
Credit
- Signature Page -
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, as a Term Lender and a
Revolving Credit Lender
By: /s/ X. X. Xxxxxxx
--------------------------------
Name: X. X. Xxxxxxx
Title: Director
- Signature Page -
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH, as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
- Signature Page -
LANDESBANK SACHSEN GIROZENTRALE, as
a Term Lender and a Revolving Credit
Lender
By: /s/ M. Tuchalke
--------------------------------
Name: M. Tuchalke
Title: VP
By: /s/ H. P. Kochs
--------------------------------
Name: H. P. Kochs
Title: Senior Manager
- Signature Page -
BHF-BANK AG, NEW YORK BRANCH, as a
Term Lender and a Revolving Credit Lender
By: /s/ Heidimare Skon
--------------------------------
Name: Heidimare Skon
Title: V.P.
By: /s/ Xxxxx Xxx
--------------------------------
Name: Xxxxx Xxx
Title: V.P.
- Signature Page -
THE SUMITOMO TRUST & BANKING CO.
LTD., NEW YORK BRANCH, as a Term Lender
and a Revolving Credit Lender
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
- Signature Page -
HELABA DUBLIN LANDESBANK
HESSEN-THURINGEN INTERNATIONAL, as a Term
Lender and a Revolving Credit Lender
By: /s/ W. N. Xxxxxxx
--------------------------------
Name: W. N. Xxxxxxx
Title: Vice President -
Structured Finance
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President -
Structured Finance
- Signature Page -
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO, A UNIT OF THE CHASE
MANHATTAN BANK, as a Term Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
- Signature Page -
FIRST AMENDMENT
FIRST AMENDMENT, dated as of February __, 1999 (this
"AMENDMENT"), to the Credit Agreement, dated as of January 28, 1998 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among FLAG LIMITED, a company organized and existing under the
laws of Bermuda (the "BORROWER"), the Term Lenders (as defined therein), the
Revolving Credit Lenders (as defined therein; and together with the Term
Lenders, the "LENDERS"), BARCLAYS BANK PLC, as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and INTERNATIONAL
TRUST COMPANY OF BERMUDA LIMITED, as collateral trustee (in such capacity,
the "COLLATERAL TRUSTEE").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the Credit Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, certain loans to the Borrower;
WHEREAS, in a letter dated February 17, 1999, a copy of which
is attached hereto (the "FLAG LETTER"), the Borrower has advised the Lenders
that (a) its Shareholders (other than the Xxxx Atlantic Shareholder) desire to
exchange all of their shares of Capital Stock in the Borrower into shares of
Capital Stock of FLAG Telecom Holdings Limited ("HOLDCO") and (b) the Xxxx
Atlantic Shareholder desires to immediately exchange a portion of its shares of
Capital stock in the Borrower into shares of Capital Stock of Holdco and, after
receiving applicable regulatory approvals, to exchange the remaining interests
in the Borrower into Capital Stock of Holdco (the transactions described in
clauses (a) and (b) will collectively be referred to herein as the "SHARE
EXCHANGES");
WHEREAS, immediately after the consummation of the Share
Exchanges, Holdco and the Xxxx Atlantic Shareholder will own approximately 66%
and 34%, respectively, of the shares of Capital Stock of the Borrower;
WHEREAS, the Borrower has requested that the Lenders' consent
to the Share Exchanges in the manner provided for in this Amendment; and
WHEREAS, the Majority Lenders hereby consent to the Share
Exchanges on the terms and subject to the conditions set forth herein;
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NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
"XXXX ATLANTIC PLEDGE AMENDMENT" shall mean the First
Amendment to the Xxxx Atlantic Shareholder Pledge Agreement, dated as
of the date hereof, between the Xxxx Atlantic Shareholder and the
Collateral Trustee, which will amend the Xxxx Atlantic Shareholder
Pledge Agreement so as to provide that all of the shares of Capital
Stock of the Borrower owned by the Xxxx Atlantic Shareholder, after
giving effect to the Share Exchanges, will be subject to the Xxxx
Atlantic Shareholder Pledge Agreement.
"HOLDCO" shall mean FLAG Telecom Holdings Limited, a Bermuda
company.
"HOLDCO PLEDGE AGREEMENT" shall mean the Pledge Agreement,
dated as of the date hereof, made by Holdco in favor of the Collateral
Trustee, for the benefit of the Secured Parties, substantially in the
form of the existing Xxxx Atlantic Shareholder Pledge Agreement, as
such Holdco Pledge Agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms of the Credit
Agreement.
2. CONSENT TO SHARE EXCHANGES
Subject to the terms and conditions set forth herein, the
Majority Lenders hereby consent to the consummation of the Share Exchanges so
long as the Collateral Trustee, for the benefit of the Secured Parties,
maintains a perfected security interest in the Capital Stock of the Borrower.
3. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective on the date on which all
of the following shall have occurred or been satisfied or waived by the
Administrative Agent:
(a) the Administrative Agent shall have received counterparts
of this Amendment, duly executed and delivered by a duly authorized
officer of each of the Borrower, the Administrative Agent and the
Majority Lenders;
3
(b) the Administrative Agent shall have received copies of (i)
the Holdco Pledge Agreement, (ii) the Xxxx Atlantic Pledge Amendment
and (iii) appropriate proxy and powers, stock powers and transfer
certificates by Holdco and the Xxxx Atlantic Shareholder, all duly
executed and delivered by the parties thereto and in form and substance
reasonably satisfactory to the Administrative Agent;
(c) the Administrative Agent shall have received a copy of (i)
the Bye-Laws and Memorandum of Association of Holdco, certified by the
Secretary or an Assistant Secretary of Holdco, (ii) resolutions of the
Board of Directors of Holdco duly authorizing the execution, delivery
and performance by Holdco of the Holdco Pledge Agreement and grant the
Liens under such Pledge Agreement, certified by the Secretary or an
Assistant Secretary of Holdco and (iii) an incumbency certificate as to
the Person or Persons authorized to execute and deliver such Pledge
Agreement on its behalf, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent;
(d) the Administrative Agent shall have received an incumbency
certificate as to the Person or Persons authorized to execute and
deliver the Xxxx Atlantic Pledge Amendment on its behalf be in form and
substance reasonably satisfactory to the Administrative Agent;
(e) the Administrative Agent shall have received an officer's
certificate from Holdco certifying that (i) the Share Exchanges do not
violate any Applicable Law or violate or result in a default under any
material Contractual Obligation of the Borrower or any Subsidiary
thereof or any material Contractual Obligation of Holdco or any
existing Shareholder of the Borrower, and do not adversely affect the
Borrower, the Collateral or the Lenders and (ii) no governmental and
third party approvals or consents (other than those approvals or
consents which have been duly obtained or made, are in full force and
effect and are final and those which are not required to have been
obtained or made by the date hereof) are necessary in connection with
the Share Exchanges and the execution, delivery and performance of the
Holdco Pledge Agreement, which certificate shall be in form and
substance reasonably satisfactory to the Administrative Agent; and
(f) the Administrative Agent shall have received such other
documents (including officer's certificate, counsel opinions and UCC
filing forms) as it may reasonably request, all of which shall be in
form and substance reasonably satisfactory to the Administrative Agent.
4
4. ADDITIONAL COVENANTS AND AGREEMENTS
(a) The parties acknowledge and agree that, for all purposes
under the Credit Agreement, (i) Holdco will constitute a "Permitted Parent
Company" and be subject to all provisions of the Credit Agreement applicable to
a Permitted Parent Company and (ii) any issuance of any Capital Stock or any
other equity interest of Holdco (including any issuance in connection with a
public offering of equity by Holdco) shall be subject to the provisions of
provisos (i) and (ii) in Section 6.8(a) of the Credit Agreement with the
reference to "such a transaction" contained therein being deemed to refer to
such issuance of Capital Stock or other equity interest of Holdco.
(b) The parties acknowledge and agree that, for all purposes
under the Credit Agreement, (i) Holdco will be included in the definition of
"Shareholder" and be subject to all provisions of the Credit Agreement
applicable to a Shareholder and (ii) the Holdco Pledge Agreement will be
included in the definition of "Pledge Agreements" and be subject to all
provisions of the Credit Agreement applicable to a Pledge Agreement.
(c) The parties hereby agree that paragraph (e) of Article VII
of the Credit Agreement shall be amended by amending and restating the proviso
at the end thereof as follows:
"PROVIDED, HOWEVER, the commencement of any proceeding or other action
or event of a nature referred to in clauses (i) through (v) above with
respect to any Shareholder (other than the Xxxx Atlantic Shareholder,
Marubeni Telecom and any Permitted Parent Company) shall not constitute
an Event of Default under this paragraph unless such proceeding, other
action or event could reasonably be expected to have a Material Adverse
Effect; or"
(d) The parties hereby agree that Article VII of the Credit
Agreement shall be amended by adding new paragraphs (t) and (u) after paragraph
(s) as follows:
"(t) Holdco shall, without the prior written consent of the
Majority Lenders, create any entity in between Holdco and its initial
shareholders, or create any subsidiary of Holdco which will hold,
directly or indirectly, any Capital Stock of the Borrower; or"
"(u) Holdco shall, without the prior written consent of the
Majority Lenders, amend, supplement or otherwise modify, or permit the
amendment, modification or supplementation of its Bye-Laws or
Memorandum of Association in a manner which is inconsistent with or
violates the terms of or could reasonably be expected to prevent
5
compliance with any of the terms of any Financing Document or Project
Document or could materially adversely affect the Lenders or any
Collateral."
5. DIRECTIONS.
The Majority Lenders hereby direct the Administrative Agent to
execute and deliver all such documents as the Administrative Agent may deem
advisable in order to effectuate the transactions referred to herein. The
Majority Lenders hereby authorize the Administrative Agent to direct the
Collateral Trustee to execute and deliver all such documents as the
Administrative Agent may deem advisable in order to effectuate the transactions
referred to herein.
6. GENERAL.
(a) REPRESENTATIONS; NO DEFAULT. On and as of the date hereof
and after giving effect to this Amendment, the Borrower (i) confirms, reaffirms
and restates the representations and warranties set forth in the Credit
Agreement in all material respects except where such representations and
warranties relate to an earlier date in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date, (ii) represents and warrants that all factual information (taken as a
whole) contained in the FLAG Letter is true and accurate in all material
respects as of the date hereof and not incomplete by omitting to state a
material fact necessary in order to make such information (taken as a whole) not
misleading in any material respect in light of the circumstances under which
such information is provided and (iii) represents and warrants that no Default
or Event of Default under the Credit Agreement has occurred and is continuing as
of the date hereof.
(b) PAYMENT OF EXPENSES. The Borrower agrees to pay or
reimburse the Administrative Agent for all of its out-of-pocket costs and
reasonable expenses incurred in connection with this Amendment, any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
(c) NO OTHER AMENDMENTS. Except as expressly waived or
consented to or amended, supplemented or modified hereby, the Credit Agreement
shall continue to be and shall remain in full force and effect in accordance
with its terms.
(d) GOVERNING LAW. This Amendment shall be construed in
accordance with and governed by the laws of the State of New York.
6
(e) COUNTERPARTS. This Amendment may be executed by one or
more of the parties to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Amendment signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
7
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
FLAG LIMITED
By: /s/ Xxxxxx Bande
------------------
Name: Xxxxxx Bande
Title: Chairman + CEO
BARCLAYS BANK PLC, as Administrative
Agent, a Term Lender and a Revolving
Credit Lender
By: /s/ L. Xxxxx Xxxxxx
---------------------
Name: L. Xxxxx Xxxxxx
Title: Associate Director
GULF INTERNATIONAL BANK B.S.C., as a
Term Lender and a Revolving Credit Lender
By:
------------------------------------
Name:
Title:
DRESDNER BANK AG, New York and Grand
Cayman Branches, as a Term Lender and a
Revolving Credit Lender
By: /s/ Xxxxx Xx
------------------------------------
Name: Xxxxx Xx, P.E.
Title: Assistant Vice President
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC., as a Term Lender
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXX XXXXX STRATEGIES PORTIOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
BANK BRUSSELS XXXXXXX, NEW YORK
BRANCH, as a Term Lender and a Revolving
Credit Lender
By:
---------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED, as a Term Lender and a
Revolving Credit Lender
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH, as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Associate
LANDESBANK SACHSEN GIROZENTRALE,
as a Term Lender and a Revolving Credit
Lender
By: /s/ Kochs
------------------------------------
Name: Kochs
Title: Senior Manager
BHF-BANK AKTIENGESELLSCHAFT, as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: AT
THE SUMITOMO TRUST & BANKING CO.
LTD., NEW YORK BRANCH, as a Term Lender
and a Revolving Credit Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
HELABA DUBLIN LANDESBANK
HESSEN-THURINGEN INTERNATIONAL, as a
Term Lender and a Revolving Credit Lender
By: /s/ Binst van Beek
------------------------------------
Name: Binst van Beek
Title: Deputy Managing Director
By: /s/ Malread Scanion
------------------------------------
Name: Malread Scanion
Title: Officer International Credits
OCTAGON LOAN TRUST, as a Term Lender
By: Octagon Credit Investors, as Manager
By:
------------------------------------
Name:
Title:
PACIFIC INVESTMENT MANAGEMENT
COMPANY, as a Term Lender
By:
------------------------------------
Name:
Title:
SECOND AMENDMENT
SECOND AMENDMENT, dated as of March 19, 1999 (this
"AMENDMENT"), to the Credit Agreement dated as of January 28, 1998 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among FLAG LIMITED, a company organized and existing under the
laws of Bermuda (the "BORROWER"), the Term Lenders (as defined therein), the
Revolving Credit Lenders (as defined therein; and together with the Term
Lenders, the "LENDERS"), BARCLAYS BANK PLC, as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and INTERNATIONAL
TRUST COMPANY OF BERMUDA LIMITED, as collateral trustee (in such capacity,
the "COLLATERAL TRUSTEE").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein and not otherwise
defined herein shall have the meanings given to them in the Credit Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, certain loans to the Borrower;
WHEREAS, in a letter dated March 18, 1999, a copy of which is
attached hereto (the "FLAG LETTER"), the Borrower has advised the Lenders that
(a) it desires to transfer all its shares of Capital Stock in two of its
Subsidiaries (FLAG Telecom Limited and FLAG Telecom USA Ltd., together the
"TRANSFERRED SUBSIDIARIES") to FLAG Telecom Holdings Limited ("HOLDCO") (such
transfer will be referred to herein as the "SUBSIDIARY TRANSFER"), and (b) it
desires to amend the Construction Contract by entering into the Agreement for
PSA 3 and Final Acceptance of the FLAG System dated as of March 8, 1999 among
the Borrower, Tyco Submarine Systems Ltd., KDD Submarine Cable Systems Inc. and
Marubeni Corporation, in the form attached hereto as Exhibit A (the
"CONSTRUCTION CONTRACT AMENDMENT");
WHEREAS, immediately after the consummation of the Subsidiary
Transfer, FLAG Telecom Group Services Limited, a direct wholly-owned subsidiary
of Holdco, will own 100% of the shares of Capital Stock of the Transferred
Subsidiaries;
WHEREAS, the Borrower has requested that the Lenders' consent
to the Subsidiary Transfer and the Construction Contract Amendment and that
certain provisions of the Credit Agreement be amended or waived in the manner
provided for in this Amendment; and
WHEREAS, the Lenders hereby consent to the Subsidiary Transfer
and the Construction Contract Amendment and agree to amend or waive certain
provisions of the Credit Agreement, all on the terms and subject to the
conditions set forth herein.
3
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
2. CONSENT AND WAIVERS REGARDING SUBSIDIARY TRANSFER
The Lenders hereby (a) consent to the Subsidiary Transfer and
(b) waive the provisions of Sections 6.3, 6.8 and 6.20 of the Credit Agreement
so as to permit the Subsidiary Transfer.
3. CONSENT REGARDING CONSTRUCTION CONTRACT AMENDMENT
The Lenders hereby (a) consent to the Construction Contract
Amendment and (b) waive the provisions of Section 6.10 so as to permit the
Construction Contract Amendment; PROVIDED that the $11,000,000 released from the
Contractor Escrow Account to the Borrower pursuant to Section 2(a) of the
Construction Contract Amendment shall be used by the Borrower to prepay the
Loans in accordance with Section 2.9(h) of the Credit Agreement and PROVIDED
FURTHER that all amounts released from the Contractor Escrow Account pursuant to
Section 2(c) of the Construction Contract Amendment upon termination of the
Contractor Escrow Agreement shall be deemed Special Payments under the Credit
Agreement and shall be deposited in the Special Payment Account for distribution
to the Contractors in accordance with Section 8.20(b).
4. AMENDMENT TO THE CREDIT AGREEMENT
(a) Section 1.1 of the Credit Agreement is hereby amended by adding the
following in alphabetical order:
"SERVICES AGREEMENTS" shall have the meaning ascribed thereto
in Section 5.26.
"TRANSFERRED SUBSIDIARIES" shall be the collective reference
to FLAG Telecom Limited and FLAG Telecom USA Ltd.
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding at the end of the definition of "PROJECT DOCUMENTS" the following:
4
"'PROJECT DOCUMENTS' shall also include the Services
Agreements."
(c) Article V of the Credit Agreement is hereby amended by adding a new
Section 5.26 as follows:
"SECTION 5.26. SERVICES AGREEMENTS. The Borrower shall, prior
to April 30, 1999, enter into services agreements (the "SERVICES
AGREEMENTS") with the Transferred Subsidiaries."
(d) Section 8.20 of the Credit Agreement is hereby amended by
deleting said section in its entirety and substituting in lieu thereof the
following:
"SECTION 8.20. SPECIAL PAYMENT ACCOUNT. Special Payments
deposited in the Special Payment Account shall be (a) applied by the
Collateral Trustee to the Administrative Agent either for the
prepayment of principal of the Loans, together with accrued interest
thereon or (b) if such Special Payments result from the termination of
the Contractor Escrow Account, retained by the Collateral Trustee for
distribution from time to time directly to the Contractors upon
completion of Work in accordance with a payment notice from the
Borrower to the Collateral Trustee (and, thereafter, to the cash
collateralization of the Revolving Credit Commitments on terms and
pursuant to documentation reasonably satisfactory to the Administrative
Agent). All other Special Payments shall be transferred to the Revenue
Account to be applied in accordance with Section 8.10."
5. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective on the date on which all
of the following shall have occurred, been satisfied or waived by the
Administrative Agent:
(a) the Administrative Agent shall have received counterparts
of this Amendment, duly executed and delivered by a duly authorized
officer of each of the Borrower, the Administrative Agent and the
Majority Lenders;
(b) the Administrative Agent shall have received, with a copy
for each Lender, a report of the Independent Engineer in form and
substance reasonably satisfactory to the Administrative Agent; and
(c) the Administrative Agent shall have received an officer's
certificate from the Borrower certifying that (i) the Subsidiary
Transfer and the Construction Contract Amendment do not violate any
Applicable Law or violate or result in a default under any material
Contractual Obligation of the Borrower or any
5
Subsidiary thereof, and do not adversely affect the Borrower, the
Collateral or the Lenders and (ii) no governmental and third party
approvals or consents (other than those approvals or consents which
have been duly obtained or made, are in full force and effect and
are final and those which are not required to have been obtained or
made by the date hereof) are necessary in connection with the
Subsidiary Transfer or the Construction Contract Amendment, which
certificate shall be in form and substance reasonably satisfactory
to the Administrative Agent.
6. DIRECTIONS.
The Lenders hereby direct the Administrative Agent to execute
and deliver all such documents as the Administrative Agent may deem advisable in
order to effectuate the transactions referred to herein. The Lenders hereby
authorize the Administrative Agent to direct the Collateral Trustee to execute
and deliver all such documents as the Administrative Agent may deem advisable in
order to effectuate the transactions referred to herein.
7. GENERAL.
(a) REPRESENTATIONS; NO DEFAULT. On and as of the date hereof
and after giving effect to this Amendment, the Borrower (i) confirms, reaffirms
and restates the representations and warranties set forth in the Credit
Agreement in all material respects except where such representations and
warranties relate to an earlier date in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date, (ii) represents and warrants that all factual information (taken as a
whole) contained in the FLAG Letter is true and accurate in all material
respects as of the date hereof and not incomplete by omitting to state a
material fact necessary in order to make such information (taken as a whole) not
misleading in any material respect in light of the circumstances under which
such information is provided and (iii) represents and warrants that no Default
or Event of Default under the Credit Agreement has occurred and is continuing as
of the date hereof.
(b) PAYMENT OF EXPENSES. The Borrower agrees to pay or
reimburse the Administrative Agent for all of its out-of-pocket costs and
reasonable expenses incurred in connection with this Amendment, any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent.
6
(c) NO OTHER AMENDMENTS. Except as expressly waived or
consented to or amended, supplemented or modified hereby, the Credit Agreement
shall continue to be and shall remain in full force and effect in accordance
with its terms.
(d) GOVERNING LAW. This Amendment shall be construed in
accordance with and governed by the laws of the State of New York.
(e) COUNTERPARTS. This Amendment may be executed by one or
more of the parties to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Amendment signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
7
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
FLAG LIMITED
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer
BARCLAYS BANK PLC, as Administrative
Agent, a Term Lender and a Revolving
Credit Lender
By: /s/ L. Xxxxx Xxxxxx
------------------------------------
Name: L. Xxxxx Xxxxxx
Title: Director
GULF INTERNATIONAL BANK B.S.C., as a
Term Lender and a Revolving Credit Lender
By: /s/ Abdel-Fattah Tahoun
-----------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
By: /s/ Xxxxxx Xxxxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
DRESDNER BANK AG, New York and Grand
Cayman Branches, as a Term Lender and a
Revolving Credit Lender
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx Xx, P.E.
----------------------
Name: Xxxxx Xx, P.E.
Title: Assistant Vice President
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC., as a Term Lender
By: _________________________________
Name:
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By: _________________________________
Name:
Title:
XXXXXXX XXXXX DEBT STRATEGIES
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By: _________________________________
Name:
Title:
XXXXXXX XXXXX GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By: _________________________________
Name:
Title:
BBL (USA) CAPITAL CORP,
BRANCH, as a Term Lender and a Revolving
Credit Lender
By: /s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Dominiek Vangaever
--------------------------
Name: Dominiek Vangaever
Title: Vice Chairman
AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED, as a Term Lender and a
Revolving Credit Lender
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH, as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: Associate
LANDESBANK SACHSEN GIROZENTRALE,
as a Term Lender and a Revolving Credit Lender
By: /s/ Xxxxx
---------------------------
Name: Xxxxx
Title: SVP
By: /s/ Kochs
---------------------------
Name: Kochs
Title: Senior Manager
BHF-BANK AKTIENGESELLSCHAFT, as a
Term Lender and a Revolving Credit Lender
By: /s/ Xxx Xxxxxxxxxxx
---------------------------
Name: Xxx Xxxxxxxxxxx
Title: Assistant Vice President
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: AT
THE SUMITOMO TRUST & BANKING CO.
LTD., NEW YORK BRANCH, as a Term Lender
and a Revolving Credit Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
HELABA DUBLIN LANDESBANK
HESSEN-THURINGEN INTERNATIONAL, as
a Term Lender and a Revolving Credit Lender
By: /s/ Name of signatory
---------------------------
Name:
Title:
By: /s/ Malread Scanion
---------------------------
Name: Malread Scanion
Title: Officer International Credits
OCTAGON LOAN TRUST, as a Term Lender
By: Octagon Credit Investors, as Manager
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
PACIFIC INVESTMENT MANAGEMENT
COMPANY, as a Term Lender
By:
-----------------------------
Name:
Title:
THE TORONTO DOMINION BANK
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Mgr. Cr. Admin.
BLACK DIAMOND CLO 1998-1 LTD.
By: /s/ Name of Signatory
---------------------------
Name:
Title:
HARCH CAPITAL
By:
---------------------------
Name:
Title:
